Markets WRAP: Rand ends at R13.58/$.

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08 Feb 2019

Your market wrap for Friday 

USD/ZAR 13.5896

EUR/USD 1.1346

EUR/ZAR 15.4110

GBP/USD 1.2956

GBP/ZAR 17.5952

JSE -0.92%

FTSE -0.17%

S&P 500 -0.34%

Brought to you by TreasuryONE

08 Feb 2019

Harmony Gold expects drop in half year earnings

Harmony Gold earnings for the six months ended December 31 will be lower compared to the same period in 2017, due, in part, to a R180m loss on its dollar denominated debt. 

"A translation loss of R180m was recognised on the US dollar denominated debt as at 31 December 2018, compared to a translation gain of R196m recorded in the previous comparable period," the company said in a trading statement on Friday. Harmony will publish its interim financial results on Tuesday.

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08 Feb 2019

Stocks fall as pessimism builds on growth, trade

US equity futures dropped with shares in Europe and Asia as concern over economic growth and trade disputes pushed global stock markets toward their first weekly loss since December.

Treasuries edged higher with gold.Contracts on the S&P 500, Dow and Nasdaq Composite all declined, with Hasbro tumbling in the pre-market after its earnings missed the lowest analyst estimate and Amazon edging lower as feuding intensified between its CEO and President Donald Trump.

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08 Feb 2019

Lonmin to delay 12 600 job cuts as conditions improve

Lonmin has delayed placing some of its shafts on care and maintenance due to improved market conditions, putting brakes on approximately 12 600 job cuts announced in 2017.

“Due to the improved market conditions, some shafts that had been earmarked to go on care and maintenance have been kept open for longer,” the company said in its production report for the three months to December 31. 

“In this regard, the loss of approximately 12 600 jobs announced in 2017 is likely to occur over a longer period than the original three years to 2020.”

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08 Feb 2019

Business body hails Ramaphosa for anti-corruption, pro-growth stance

usiness Unity South Africa has praised President Cyril Ramaphosa’s State of the Nation Address for prioritising economic growth and fighting corruption that has dogged government and state-owned entities.

The president delivered the address, which focused heavily on plans to grow the economy, on Thursday evening to a joint sitting of both houses of Parliament.Ramaphosa, as had been anticipated, announced plans to split state-owned power utility Eskom into three separate entities in an effort to improve its finances. 

He also said government would step in to support Eskom's balance sheet, but did not provide details. 

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08 Feb 2019

Ascendis Health is said to mull further sales to cut debt

Loni Prinsloo and Janice Kew

Ascendis Health, already considering an offer for its Remedica unit, is planning to sell other key businesses as the South African company battles to service debt and ensure survival, according to people familiar with the matter.

The debt-laden maker of multivitamins, probiotics and pet nutritional supplements received an unsolicited offer for Cyprian unit Remedica last month, providing relief for the worst performing stock on Johannesburg’s stock exchange last year.

Ascendis has now earmarked its bio-science division for an additional sale, said the people, who asked not to be identified as the deliberations are private.The Remedica business has been valued by Ascendis at about $400 million, compared with a 2016 purchase price of 260 million euros ($295 million), the people said.

If the as-yet-unnamed buyer agrees to meet that price, it would generate proceeds of more than double Ascendis’s current market capitalization of R2.4bn billion.The drugmaker didn’t immediately respond to a request for comment.

On Wednesday, Ascendis said South African investment firm Legae Peresec has increased its stake in the company to 5%.

Debt Payments

Under Chief Executive Officer Thomas Thomsen, Ascendis has started a review of its business to bring down total liabilities of more than R9bn. The company has R200m in outstanding payments this year and about R4.4bn due in 2021, according to data compiled by Bloomberg.

The 2018 share slump has had implications for its largest shareholder, private-equity firm Coast2Coast Capital. Its Chief Executive Officer Gary Shayne, along with his spouse and associated companies, have been forced to sell or transfer about R225m worth of Ascendis shares since November. Most of the disposals were triggered as the stock was used as collateral for loans.

The company plans to release cash flow statements to lenders by the end of the month, one person said. The stock has climbed 27% this year, compared with 1.8% on the benchmark FTSE/JSE Africa All Shares Index. Ascendis shares rose 0.2% to R5.28 as of 10:42, extending Thursday’s 1.2% gain. - Bloomberg 

08 Feb 2019

Global equity markets fall over growth concerns - Bloomberg 

Stocks fell and bonds ticked higher as concern over economic growth and trade disputes sent global equity markets toward their first weekly loss since December.

Oil and most industrial metals dropped, while the yen nudged higher.

The Stoxx Europe 600 Index was dragged lower for a second day by automakers and technology shares.

Stocks tumbled in much of Asia along with US equity futures following news that President Donald Trump is unlikely to meet Chinese President Xi Jinping before the March 1 deadline for more tariffs, re-igniting fears over further protectionist measures.

Japanese shares led declines in Asia, and Hong Kong stocks pared an early slide as trading resumed after a three-day holiday. China’s markets remain shut for Lunar New Year.

Investors are calling for a time-out on the risk rally that began around Christmas as central banks and governments from Brussels to Sydney cut growth forecasts.

The European Commission made sweeping downward revisions to most of the region’s major economies Thursday and the Bank of England said it expected the UK economy to grow at its slowest pace in a decade. T

he Reserve Bank of Australia lowered its growth and inflation forecasts Friday.

“Many of the central banks are reacting to the fact that the global economic situation has worsened,” Komal Sri-Kumar, founder and president at Sri-Kumar Global Strategies, told Bloomberg TV from Los Angeles.

Australia’s dollar dropped to a five-week low after its central bank’s announcement, which followed a declaration by its governor earlier in the week of a shift to a neutral policy stance.

Elsewhere, WTI crude oil fell toward $52 a barrel in New York while gold erased an earlier gain.

Iron ore futures topped $90 a ton to hit the highest level since 2014 on concern that the increasingly severe crisis at top producer Vale SA will reduce global supplies

08 Feb 2019

Sasol said capital costs at its Lake Charles chemicals project in Louisiana have increased once again, to as much as $11.8bn, and start-up of the units will be as many as five months later than expected.

08 Feb 2019

South32 announces the election of Karen Wood as chair elect of the board of directors. She will succeed David Crawford effective from 12 April 2019, at which time he will retire as chairman and non-executive director. - SENS

08 Feb 2019

The rand is unchanged from Thursday afternoon's levels of R13.6450/$, TreasuryONE said in a note on Friday morning.

Global growth concerns continue to see a move to the dollar.

In the view of TreasuryONE, President Cyril Ramaphosa's State of the Nation Address (SONA) on Thursday evenin did not reveal anything new as he touched on Eskom, job creation, land expropriation, foreign investment and tourism amongst other things. Eskom is to be split into three different entities in the latest turn around strategy.

Barriers to foreign investment are to be lifted to attract investors and create jobs. Tourism to be boosted in order to double the current number if visitors with a specific focus on China and India.

The next focus will be on the national budget on 20 February.

08 Feb 2019

Asian stocks fell sharply Friday following losses on Wall Street as fresh doubts emerged over the prospects for US-China trade talks and Europe's growth outlook.Hong Kong returned from the three-day Lunar New Year break and was immediately in the red, as investors reacted to negative signals from the US ahead of next week's crunch trade negotiations in Beijing. - AFP

08 Feb 2019

US stocks on Thursday suffered their biggest losses in more than two weeks as slashed European growth forecasts and warnings on the US-China trade dispute sent Wall Street into the red. - AFP
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