Daily Report 10 May 2022

SA Company News:

The Johannesburg Stock Exchange All-Share Index fell 1.6% to 67 857, weighed down by concerns of slowdown in global growth.Capital & Counties Properties (Capco) said it was exploring a possible merger with Shaftesbury, which owns 600 properties in London’s West End. The company said if the proposed merger goes through, it will own 47% of the combined company. The rest of the company will be owned by other Shaftesbury shareholders. Capco currently owns 25.2% of Shaftesbury. Capital and Counties share price closed 1.8% higher at R32.02.MTN Group’s share price fell 2.6% to R162.90 after it announced that profit at its Rwandan unit fell by more than a third in the March quarter. MTN Rwanda accounts for 2.36% of MTN Group’s total subscribers. The company attributed the decline to the payment of the first instalment to renew its operating licence in Rwanda. The total licence fee of $91m (R1.46bn) will be paid over the next 10 years.In a trading update for the six months to end-March, Transaction Capital said it expects its headline earnings to increase by between 6% and 11% to R463 million and R485 million in monetary terms. High-growth earnings from WeBuyCars and a steady recovery by SA Taxis supported its performance, the company reported.

 

SA Economy:

Foreign exchange reserves increased to a record high of $60.28bn in April from $58.16bn in March. The SA Reserve Bank said that the rise was mainly due to the proceeds received from foreign borrowings amounting to $3bn. Foreign exchange reserves are held by a country’s monetary authority and are primarily available to balance payments, influence the foreign exchange rate of its currency and to maintain confidence in financial markets.According to figures released by Minerals Council SA, mineral production exceeded R1-trillion for the first time in history in 2021, driven in part by high commodity prices which led to higher local taxes, wages and employment. The value of production was R1.188bn, more than 30% higher than in 2020.Power utility Eskom said yesterday that it would implement ‘Stage 2’ scheduled power cuts from 17:00 as the power system is severely constrained.

 

Global Economy:

China’s exports in April rose 3.9% year-on-year to $273.62 billion, while China’s April imports were flat at $222.5 billion, year-on-year. Hong Kong’s GDP contracted by 4% year-on-year in the first quarter of 2022, declining sharply from a 4.7% growth in the fourth quarter of 2021. The US Federal Reserve said elevated and persistent inflation, coupled with a sharp rise in interest rates, are among the greatest near-term risks to the U.S. economic system and at the same time warned that Russia’s invasion of Ukraine could also affect financial stability.

 

Global Company:

The FTSE 100 closed 2.32% lower at 7 217, as concerns about inflation risks, lockdowns in China, and the war in Ukraine continued to encourage investors to sell equities. The Hang Seng Index fell 1.75% to 19 659. Technology shares, Tencent slid 2% while Alibaba fell 5%.In China, the Shanghai Composite is flat at 3 148. The Dow Jones Industrial Average fell 1.99% to end at 32 246 points, while the S&P 500 was lower by 3.2% to 3 991, as rising U.S. Treasury yields, along with prospects of aggressive monetary policy tightening, weighed on growth stocks. Rivian Automotive shares fell 14% after it was reported that Ford is selling 8 million shares of the electric vehicle manufacturer as the lockup period for selling the stock expired.BioNTech shares rose 1.6% after the drugmaker said its first-quarter sales and earnings have more than tripled, which was mainly due to the demand for the COVID-19 vaccine it developed together with Pfizer.

 

Commodities:

Gold is down 0.44% to $1 863/oz, while Platinum is higher by 1.4% to $947.85/oz. Brent crude was 6.94% lower at $104.74 a barrel.

 

Currencies:

The rand traded at R16.14 against the US Dollar, R19.95 against British Pound, and R17.07 against the Euro. The Euro is slightly firmer against the US Dollar to trade at $1.06.

 

 

 

Brent Oil Futures
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Gold Futures
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Market Indicators

Commodities $ Cross Currencies ($) Major Indices
Gold 1863,91 -0,44% USD/ZAR 16,14 Top40 60161,00 -1,88%
Platinum 947,85 1,40% GBP/ZAR 19,95 Dow 30 32245,70 -2,03%
Brent 104,74 -6,94% EUR/ZAR 17,07 S&P 500 3991,24 -3,31%
Copper 4,23 0,70% EUR/USD 1,0571 FTSE 7216,58 -2,37%
Palladium 2127,50 4,25% USD/JPY 130,38 DAX 13380,67 -2,19%
Iron Ore 128,00 -10,94% BITCOIN 32036,90 Shanghai 3032,42 1,03%
Source:  Moneyweb & Investing.com