Daily Report 12 August 2022

SA Company News:

The Johannesburg Stock Exchange All-Share Index closed 2.2% higher to the 71 265 level, as investors digested the latest US inflation figures, which came in better than expected. In a trading statement from Old Mutual, the company said that its headline earnings for the first half of 2022 are expected to rise as much as 73% to R5.5 billion, from the R3.16 billion reported in June 2021. Old Mutual’s results are expected on the 30th of August. MTN Group shares gained 9% to R158.94 per share after saying its first-half earnings surged 46.5% and that it had received a $35 million binding offer for its Afghanistan business, nearing an exit from the Middle East. MTN didn’t declare an interim dividend, which is in line with its company policy. The group expects to pay a final dividend of 330c per share for its full year. In a trading update from Advtech, the company said that its headline earnings per share (HEPS) are expected to rise in a range of 20% to 25% by end-June. The group’s results are expected on the 29th of August. The Takeover Regulation Panel (TRP) has instructed Rain to withdraw a press statement regarding a proposed merger with Telkom.

SA Economy:

Mining production dropped by 8% year-on-year in June 2022, after a downwardly revised 7.2% decline in the previous month and compared with market forecasts of a 5% fall amid the persistent effects of a three-month strike in the gold sector and load-shedding. The data is not good news for finance minister, Enoch Godongwana, who relies on tax income from mining companies. Manufacturing production fell by 3.5% from a year earlier in June 2022, after a downwardly revised 1.8% fall in the prior month and worse than market forecasts of a 2.9% drop. The negative contributions came from the manufacture of motor vehicles, parts and accessories and other transport equipment.

Global Economy:

The Producer Price Index (PPI) in the US unexpectedly fell 0.5% month-over-month in July 2022, following a downwardly revised 1% rise in June and beating market forecasts of a 0.2% increase, suggesting that producer inflation could be on a downward trend. Most of the decline came from a 16.7% drop in gasoline prices. The probability of the Federal Reserve raising interest rates by 75 basis points at its September policy meeting fell to 40.5%, while the chance of a 50 basis point increased to 59.5%. Britain’s Gross Domestic Product (GDP) contracted 0.1% in the three months to June 2022, making it the first contraction in more than a year and compared to market forecasts of a 0.2% drop.

Global Company:

The FTSE 100 closed 0.55% lower at 7 465, with Rio Tinto falling 3.5% as the mining company traded ex-dividend. The Hang Seng Index is up 0.47% to 20 176. In China, the Shanghai Composite is flat at 3 282. The Dow Jones Industrial Average rose 0.1% to 33 336, while the S&P 500 fell 0.1% to 4 207. Energy and financials led the gainers while the healthcare sector fell. Disney shares rose 4.7% after it reported better-than-expected fiscal third-quarter earnings and subscriber growth. Johnson & Johnson said that they will stop selling talc-based baby powder globally in 2023 due to consumer safety. The company faces approximately 38 000 lawsuits from consumers claiming its talc products caused cancer due to contamination with asbestos.


Gold is up 0.3% to $1 792/oz, while Platinum is higher by 0.97% to $956/oz. Brent crude was 1.56% firmer at $99 a barrel. Currencies: The rand traded at R16.26 against the US Dollar, R19.79 against British Pound, and R16.75 against the Euro. The Euro is slightly firmer against the US Dollar to trade at $1.03.



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Market Indicators

Commodities $ Cross Currencies ($) Major Indices
Gold 1792.04 0.30% USD/ZAR 16.26 Top40 64617.00 2.25%
Platinum 956.70 0.97% GBP/ZAR 19.79 Dow 30 64617.00 48.45%
Brent 99.11 1.56% EUR/ZAR 16.75 S&P 500 4207.27 -0.07%
Copper 3.70 0.55% EUR/USD 1.0317 FTSE 7465.91 -0.55%
Palladium 2260.52 1.04% USD/JPY 133.29 DAX 13694.51 -0.05%
Iron Ore 113.50 1.76% BITCOIN 23932.10 Shanghai 3281.00 0.03%
Source:  Moneyweb & Investing.com