Daily Report 07 November 2022

SA Company News:

The Johannesburg Stock Exchange All-Share Index closed 3.6% higher at the 68 400 level.

Shares of Naspers and Prosus climbed sharply on Friday morning, tracking gains in Chinese tech giant Tencent, amid a rally on the Hang Seng index as markets speculated about a potential end to China’s zero-Covid-19 policy. Naspers was up 7.34% to R2 180.00 and Prosus up 6.47% to R896.51. Both shares had come under pressure in October, when Chinese Communist Party president Xi Jinping secured a third term

Redefine Properties published its annual results. The company reported headline earnings per share of 83.80 cents and revenue had increased to 8.24 billion rand from 7.16 billion rand. Redefine Properties declared a gross cash dividend of 19.27321 cents per share for six months ended 31 August 2022.

 

SA Economy:

The World Bank said on Friday that it had approved South Africa’s request for $497 million in financing to decommission and repurpose state-owned power utility Eskom’s Komati coal-fired power plant using renewables and batteries. Eskom’s chief executive said that the money is separate from the $8.5 billion financial package on offer from wealthy countries to help South Africa reduce its carbon emissions, which are among the world’s highest because it depends on coal for the bulk of its electricity generation.

 

​Global Economy:

Factory orders in Germany fell 4% month-over-month in September 2022, following a downwardly revised 2% fall in August and much worse than market forecasts of a 0.5% drop.

China’s current account surplus widened sharply to US$144.0 billion in the third quarter of 2022 from US$82.6 billion in the same period of the previous year.

The Producer Price Inflation (PPI) in the Euro Area eased to 41.9% year-on-year in September 2022, down from an all-time high of 43.4% in August and slightly below market expectations of 42.0%.

The US economy added 261 000 jobs in October 2022, above market forecasts of 200 000. The unemployment rate increased by 0.2% to 3.7%.

German Chancellor Olaf Scholz said in a news conference in Beijing on Friday, after he met with Chinese leader Xi Jinping, that they agreed to approve the BioNTech SE’s Covid-19 vaccines for foreign residents in China.

China’s trade data fell far short of expectations, marking the first annual decline in exports since May 2020. Exports fell by 0.3% and imports also fell by 0.7%. Analysts had forecasted a rise of 4.3% and 0.1% respectively.

The Baltic Dry index, which measures the cost of shipping goods worldwide, broke a 12-day losing streak on Friday, rising 2.6% to 1 323 points.

 

Global Company:

Global markets rallied on Friday on reports that the Chinese government is working on a plan to navigate its way out of its strict zero-Covid-19 policy. On Saturday however, Chinese authorities denied this.

The FTSE 100 closed 2.03% higher at 7 334.

The Hang Seng Index is higher by 2.63 % to 16 591, supported by gains in Chinese property and financial stocks.

In China, the Shanghai Composite is up 1.85% to 3 072.

The Dow Jones Industrial Average rose by 1.26% to 32 403, while the S&P 500 climbed 1.36% to 3 770.

Shares of Starbucks Corp rose 3.4% after it topped analyst estimates for quarterly comparable sales and profit and said that they will weather any coming recession.

PayPal Holdings Inc fell 6.9% after the online payments firm cut its annual revenue growth forecast in anticipation of a broader economic downturn.

Apple warned that its iPhone production is been disrupted by China’s covid-19 restrictions. The company’s high-end iPhone 14 Pro and Pro Max models are being affected by reduced production capacity.

 

Commodities:

Gold is up 1.31% to $1 671.50/oz, while Platinum is higher by 2.34% to $920/oz.

Brent crude was 1.16% firmer at $97.73 a barrel.

 

Currencies:

The rand traded at R17.99 against the US Dollar, R20.36 against British Pound and R17.90 against the Euro.

The Euro is slightly weaker firmer the US Dollar to trade at $0.9945.