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Markets WRAP: The rand closed at R13.85/$

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19 Jul 2019

The rand closed at R13.85 to the greenback on Friday afternoon.

The day's range was between R13.81 and R13.95.

19 Jul 2019

Europen and Asian stocks climb on Fed rate-cut bets

Bloomberg 

Stocks in Europe and Asia climbed alongside US equity futures as investors digested the latest corporate earnings as well as fresh clues on monetary policy.

The dollar rose.

Contracts on all three of the main American gauges advanced at the end of a big week for earnings and after dovish comments from two Federal Reserve officials spurred bets on a 50 basis-point rate cut. Microsoft and Schlumberger rose in premarket trading after reporting revenue that beat estimates.

The Stoxx Europe 600 trimmed gave up some of its advance as Italian assets slid on speculation about snap elections. Benchmarks in Japan, China and Hong Kong climbed, while the dollar strengthened after slumping Thursday.

19 Jul 2019

The JSE All-Share index was trading just over 1% higher at 14:11 on Friday, at 58 458.40 points. 

Industrials (+0.9), financials (+0.8%) and resources (+1.4%) all strenghened. 

While the local bourse gained, the rand weakened. The local currency opened trade at R13.84/$ and was trading at R13.94 to the greenback at 14:15, down 0.7%. 

19 Jul 2019

PepsiCo to buy Pioneer Foods to support its African expansion plans

PepsiCo, which owns food brands Frito-Lay and Pepsi-Cola, will be acquiring local food group Pioneer Foods which produces Weet-Bix, Liqui-Fruit and White Star maize, among other products.

The companies on Friday issued a joint statement indicating PepsiCo will acquire all outstanding shares of Pioneer Foods at R110 per share.

The acquisition is approximately $1.7bn (R23.6bn), it will be funded through a combination of debt and cash and has been approved by the boards of both companies, the statement indicated. It is subject to Pioneer Foods' shareholder approval and regulatory approval.

The acquisition will help PepsiCo's plans to expands into the rest of Africa. "Pioneer Foods represents a differentiated opportunity for PepsiCo and allows us to immediately scale our business in Africa. Pioneer Foods forms an important part of our strategy to not only expand in South Africa, but further into sub-Saharan Africa as well," said PepsiCo chairman, Ramon Laguarta.

"Our businesses are highly complementary, and we look forward to working with the Pioneer Foods team to successfully build and implement a shared vision in the region," he added.

PepsiCo assured that it is aware of the importance of economic transformation through Broad-Based Black Economic Empowerment and will support Pioneer Foods' existing BEE programme.

"As part of PepsiCo, we will have greater scale to expand our leading brands, greater capital to invest in local agriculture and people, greater access to leading global capabilities and a partner committed to taking our company to even greater heights," Pioneer Foods CEO Tertius Carstens said.

PepsiCo sub-Saharan Africa will be led by Eugene Willemsen, formerly PepsiCo's Executive Vice President of Global Categories & Franchise Management.

19 Jul 2019

Global stock futures rise on Fed-cut bets

Bloomberg

European stocks climbed with US futures with Asian equities on investor optimism about a more aggressive policy move by the Federal Reserve. The dollar rose.

The Stoxx Europe 600 advanced and stocks in Asia jumped amid mounting bets for a 50 basis-point cut after New York Fed President John Williams spoke of the need for half-point swift action when rates are already low.

US equity futures rose at the end of a big week for earnings, with reports from companies including BlackRock Inc., American Express Co., and Schlumberger Ltd. due later Friday. In Japan, benchmarks climbed about 2%, with gains of roughly 1% in Hong Kong and China.

19 Jul 2019

Rate cut good news, but don't get too excited - economists

The SA Reserve Bank's decision to cut the repo rate by 0.25% has been met with cautious optimism by analysts, who – while welcoming the move – have warned that relief is more likely to be short-term, and that room for further easing is limited.  

FNB chief executive Jacques Celliers said the rate cut – which would mean a reduction in the prime lending rate from 10.25% to 10% – would assist cash-strapped consumers in coming months, but cautioned the public not to rush into borrowing.

"Following a contraction in GDP during the first quarter, we look forward to improved conditions later in the year based on expectations of a good rebound and this, coupled with lower interest rates, may aid the anticipated recovery.

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