Daily Report 12 May 2022

SA Company News:

The Johannesburg Stock Exchange All-Share Index gained 2.16% to reach the 68 416 level. Among the individual stocks, Naspers led the gains by increasing 7.32% followed by Exxaro Resources gaining 5%, and Impala Platinum up 2.9%.In a trading update from Datatec, the company said it achieved strong operational performance during FY22 as it continued to benefit from technology demand for networking, security, and cloud infrastructure with an increased software and services mix. Datatec said all its divisions delivered strong results, despite global semiconductor shortages and ongoing supply chain constraints. Headline earnings per share is expected to be between 15.5 and 16.5 US cents, more than 100% higher than FY21. The company intends to release its FY22 results on or about 24 May 2022. Financial services and technology group, Net1 will change its name to “Lesaka” after shareholders voted in favor of the name, which means “kraal” in Setswana and Sesotho. The company suffered huge losses back in 2018 when it lost an R10 billion contract to pay social grants every month. The tickers of the dual-listed company will change on 18 May from NT1 to LSK on the JSE and from UEPS to LSAK on the Nasdaq.

 

SA Economy:

International mining companies at the recent African Mining Indaba said that they are prepared to increase their investment in South African projects by 84%, but only if the government tackles the red tap surrounding the processing of mining permits and the approval for self-generation projects. The chairperson of the Association of Southern Africa Sugar Importers (ASASI) warned that the country is facing a shortage of sugar with local mills unable to meet the local demand. He said there was no confirmation yet on the impact last month’s floods, in Kwa-Zulu Natal, would have on the new crop of sugar. White sugar is now selling at R16 500 per ton (excluding VAT). The usual price is R11 500 per ton (excluding VAT). The privatization of SAA is set to take some time as the airline emerges from business rescue and government provisions ensure that returning staff and creditors still need to get paid. The Public Enterprises Minister, Pravin Gordhan said that despite the government signing the agreement with Takato Consortium for the sale of a 51% stake in SAA, the transaction is not yet finalized. Regulatory hurdles still need to be overcome to complete the process.

 

Global Economy:

The annual inflation rate in the US slowed to 8.3% in April from 8.5% in March, but less than market forecasts of 8.1%. Despite the slowdown in April, inflation is unlikely to fall to pre-pandemic levels any time soon and will remain above the Fed’s 2% target for a long time as supply disruptions persist and energy and food prices remain elevated. Money market futures are now pricing in an 81% chance of a 75-bps hike next meeting on June 15. The British economy expanded 0.8% in the first quarter of 2022, slowing from a 1.3% expansion in the fourth quarter of 2021 and is below market forecasts of 1%.

 

Global Company:

The Hang Seng Index is down 1.8% to 19 458. In China, the Shanghai Composite is up 0.75% to 3 206, on repeated pledges by the authorities to boost growth and stabilize financial markets. The Dow Jones Industrial Average fell 1% to end at 31 834 points, while the S&P 500 was down 1.65% to 3 935. Coinbase Global which is listed on the NASDAQ, dropped 15% after the cryptocurrency exchange reported a loss in the first quarter, pressured by weaker volatility and a retreat in crypto prices including Bitcoin. Donut maker, Krispy Kreme’s shares rose 4.8% after the company announced that it had beat expectations at both the top and bottom lines, helped by a large jump in its overseas operations. Apple Inc. announced that it would discontinue making the iPod, the touch-screen model, which launched in 2007, it will remain on sale until supplies run out. The iPod was first introduced by Steve Jobs who helped to turn Apple from a nearly bankrupt company to an eventual $3 trillion company.

 

Commodities:

Gold is up 0.27% to $1 848/oz, while Platinum is higher by 3.4% to $991/oz. Brent crude was 1% firmer at $106 a barrel.

 

Currencies:

The rand traded at R16.21 against the US Dollar, R19.77 against British Pound, and R17.03 against the Euro. The Euro is slightly weaker against the US Dollar to trade at $1.05.

 

Brent Oil Futures
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Gold Futures
Top 40 Futures

Market Indicators

Commodities $ Cross Currencies ($) Major Indices
Gold 1848,11 0,27% USD/ZAR 16,21 Top40 61786,00 2,31%
Platinum 991,50 3,40% GBP/ZAR 19,77 Dow 30 31834,11 -1,03%
Brent 106,39 1,03% EUR/ZAR 17,03 S&P 500 3935,18 -1,67%
Copper 4,14 -1,67% EUR/USD 1,0508 FTSE 7347,66 1,42%
Palladium 2029,97 -1,39% USD/JPY 129,32 DAX 13828,64 2,13%
Iron Ore 127,00 3,15% BITCOIN 27460,00 Shanghai 3051,53 -0,47%
Source:  Moneyweb & Investing.com