Daily Report 24 January 2023

SA Company News:

The Johannesburg Stock Exchange All-Share Index closed 1.1% higher at the 80 129 level, trading at a new record high, with ongoing optimism around China’s recovery and hopes for smaller interest rate hikes from the US Federal Reserve.

Renergen said that they are producing liquid helium at its Virginia Gas Project in the Free State. Helium is a byproduct of natural gas and is mainly used in the production of computer chips and cellphones.

In a trading update from Cashbuild, the company said that group revenue fell 5% in the three months to end December, with existing store revenue falling 6%. Cashbuild’s shares closed 0.58% lower to R189.00 per share.

Sasol published production and sales metrics for the six months ended 31 December 2022. The company reported that mining production (mm tons) was 7.6 vs year-ago 8.3, external sales of 0.5 vs year-ago 0.7 and gas production of (Mozambique (Sasol’s 70% share)) 27.2 vs year-ago 29.1. Sasol and Msenge Emoyeni Wind Farm (Pty) Ltd. have signed a long-term power purchase agreement for the supply of 69MW of wind-powered renewable power to the group’s Sasolburg operations.

In a trading update from the Foschini Group Limited (TFG) the company reported 5.7% growth in same-store sales in the three months to end-December. Its UK business, which accounts for about 11% of revenue also struggled and only grew 2% year on year. TFG said that they have lost about 260 000 trading hours during the first nine months of its financial year due to loadshedding.

 

SA Economy:

President Cyril Ramaphosa has asked the board of Eskom to halt or delay its planned 18.65% electricity price hike, saying that to hike prices while load shedding was at its worst, would be unfair to citizens.

The President also said that coal-fired powered plants will not be phased out despite the country’s transition to renewable energies. He added that 80% of South Africa’s electricity is generated from coal, making it impossible for the government to rely exclusively on renewable energy.

Stats SA said that the number of company liquidations surged 30.3% year on year in December as businesses are still reeling from the effects of Covid-19 coupled with the current high inflationary environment.

 

Global Economy:

The consumer confidence indicator in the Euro Area rose by 1.1 points to -20.9 in January 2023 on hopes of lower energy prices.

US fourth-quarter GDP figures will be released on Thursday and that will offer analysts clues about the health of the world’s largest economy.

The Baltic Exchange’s dry bulk sea freight index, which measures the cost of shipping goods worldwide, is down 43% over the past 5 days to a 2-1/2-year low of 740 points.

 

Global Company:

The FTSE 100 closed 0.18% higher at 7 784 in thin trade, with investors still focusing on slowing rate hikes and the reopening of the Chinese economy.

The Hang Seng Index – closed.

In China, the Shanghai Composite – closed.

The Dow Jones Industrial Average closed 0.76% higher to 33 629, while the S&P 500 was up 1.17% to 4 019, led higher by technology, communication services and consumer discretionary shares.

Spotify Technology shares rose 2% after the music streaming company announced plans to cut 6% of its global workforce.

Microsoft, Johnson & Johnson, General Electric, Verizon Communications, and Lockheed Martin will all be releasing results later today. Wednesday will see results from Tesla, AT&T, Boeing, American Airlines, Comcast, Intel, Mastercard, Southwest Airlines, and Visa.

 

Commodities:

Gold is up 0.04% to $1 927/oz, while Platinum is higher by 0.82% to $1 046/oz.

Brent crude was 0.63% higher at $88.19 a barrel.

 

Currencies:

The rand traded at R17.19 against the US Dollar, R21.30 against British Pound and R18.70 against the Euro.

The Euro is flat against the US Dollar to trade at $1.0880.