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11 June 12:35

Rand rallies as US inflation spike seen as temporary

Most Asian and European markets rose Friday following a record lead from Wall Street as traders bought into the Federal Reserve narrative that surging US inflation was only temporary and the central bank was likely to maintain its ultra-loose monetary policies for some time.

This helped to give the rand a boost, and it was last trading 1% stronger at R13.58/$.The JSE's All-Share index was flat at 67524 points.

The keenly awaited US consumer price index for May came in at a forecast-busting five percent annually, well up from April and the highest in 13 years owing largely to a spike in energy costs and the low base of comparison with 2020.

The three main New York indexes initially fell on the announcement before rebounding, with analysts pointing out that prices rose less than expected on a monthly basis.

There has been a growing concern that the blockbuster recovery in the global economy - supported by stimulus, reopenings and vaccinations - will send inflation soaring and force central banks to taper their market-boosting monetary policies, which include record-low interest rates.

However, observers said that while those fears linger, the Fed's insistence that the expected jump in prices will only last a few months appears to be getting through with the yield on benchmark 10-year Treasuries - a key gauge of future borrowing costs - at their lowest since March.

- AFP, with additional reporting by Fin24

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11 June 12:27

Omnia to double profit

In a trading update for the year to end-March, the chemicals company Omnia said that its headline earnings per share is expected to increase by between 86% and 106%. The company said that its operational performance exceeded management's expectations.

The company has been struggling in recent years as its debt burden ballooned due to large takeovers and an expensive new fertiliser plant.

But the company has stabilised its position with a rights issues, as well as the selling of some assets, including in a R2.4 billion takeover deal of its agribio business Oro Agri. Omnia will announce its dividend decisions with its results.

11 June 10:31

SAA gets new majority owner

In what is being seen as a historic moment by the department of public enterprises, Minister Pravin Gordhan announced on Friday that Cabinet has agreed that SAA will be owned through a partnership between government and a strategic equity partner. A consortium will own 51% of the company and government 49%.

The majority black-owned consortium of Global Aviation and Harith will be known as Takatso - which means "aspire" in Setswana - and will put in an initial R3 billion. The airline will be domiciled in SA. 

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10 June 19:36

Naspers, Prosus see strong profit growth

In trading updates for the year to end-March, Naspers and its subsidiary Prosus announced strong profit growth.

"The improved profitability from the e-commerce segments and the growing contribution from Tencent were the key drivers of growth in Prosus’s earnings," the companies said in a statement.

Prosus has a 28.9% stake in the Chinese tech behemoth Tencent, along with ecommerce ventures like food delivery companies and online classifieds. Naspers owns almost 73% of Prosus, along with Media24 and Takealot.

"The financial results of Prosus, a subsidiary of Naspers, almost completely account for the Group’s results," Naspers said. Its core headline earnings (in US dollars) are expected to rise by between 20.6% – 27.6%

Prosus’ core headline earnings per share (in US dollars) are expected to climb by 41.1% – 47.9%.

Prosus shareholders will vote on July 9 about a complex new deal, which will offer Naspers shareholders the chance to swap their shares for new Prosus shares.

Fin24 is part of the Naspers-owned Media24 stable.

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10 June 16:54

Steinhoff Investment Holdings back in the black

In a trading update for the six months to end-March, Steinhoff Investment Holdings, which owns a stake in Pepkor, says it expects headline earnings per share of between 46c and 54c - compared to the headline loss per ordinary share of 23716.3c in the corresponding period.

10 June 08:29

Magda Wierzycka is back in an executive position at Sygnia

Shortly after stepping down as co-CEO of asset manager Sygnia, Magda Wierzycka has been appointed executive chair.

She will help shape the company’s strategy, both domestically and internationally, Sygnia said in a statement.

The former chair, Haroon Bhorat, will now only be a non-executive director.

Wierzycka, founder and biggest shareholder in Sygnia, stepped down as co-CEO in May – in part to focus on her investment vehicles overseas, which include a majority stake in a fund that has an exclusive deal with Oxford University to commercialise its research – including the Covid-19 vaccine that the university designed in partnership with AstraZeneca.

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10 June 08:28

SEC looking to 'freshen' trading rules to ensure orderly markets

US securities regulators are examining ways to update trading rules, including how assets are priced, to ensure they keep up with current technology, the head of the Securities and Exchange Commission said Wednesday.

"I believe it's appropriate to look at ways to freshen up the SEC's rules to ensure that our equity markets reflect our mission: to maintain fair, orderly, and efficient markets, while ensuring we protect investors and facilitate capital formation," SEC Chair Gary Gensler said in a speech.

"The question is whether our equity markets are as efficient as they could be, in light of the technological changes and recent developments."

Gensler referenced the growing use of trading apps, including Robinhood, the platform behind the stunning rise in recent months of shares like GameStop, driven by social media and retail investors.

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10 June 08:27

US stocks end down after another sluggish session

Wall Street stocks finished lower after another sluggish session Wednesday as markets look ahead to key consumer inflation data."It's quiet, light trading, just spinning its wheels, and been doing that since the beginning of the week," said Peter Cardillo of Spartan Capital Securities. "We are stuck in a trading range pattern until we get news that will motivate the market on either side of the equation."Major indices have edged in and out of positive territory all week in a period with few major earnings reports or economic data.

However, investors are keen for Thursday's reading on consumer prices for May, an important indicator of whether inflation is picking up significantly.

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09 June 19:01

Rand slumps ahead of US inflation data, ECB meeting

The rand has weakened ahead of keenly-awaited US inflation data and a European Central Bank policy meeting as traders seek clues on the timing of higher interest rates that could hinder economic recovery.

On Wednesday evening, the rand was 1.6% weaker at R13.74. The JSE's all share index ended the day flat at 67681 points.

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09 June 11:19

Asian markets struggle as traders jostle before inflation, ECB

Investors trod a cautious line Wednesday in Asia with the focus firmly on the release of US inflation data later in the week, which could have a huge bearing on the Federal Reserve's plans for monetary policy, while the European Central Bank's latest meeting will also be keenly watched.

Global markets have essentially been in a holding position this month as traders try to determine the outlook for central banks' policies in light of the surging economic recovery, with concerns that a spike in prices will force them to taper ultra-loose monetary programmes.

Officials continue to pledge that any sharp rise in inflation will only be temporary and they will maintain their accommodative position until the economy is well on the recovery track, but investors remain susceptible to data.

That makes Thursday's consumer price index (CPI) figures crucial, observers say, with anything above the 4.7% forecast likely to ramp up expectations that the Fed will tighten policy earlier than expected. "The tight trading ranges seen so far this month reflect the cautious mood in the market ahead of the inflation numbers," said Fiona Cincotta of City Index.

"Whilst the Fed reassures that this spike in inflation is temporary, policymakers will need to be out in their droves to calm the market.

"Thursday also sees the ECB's decision on policy, with analysts not expecting any changes yet but looking for any shifts in its outlook as the recovery presses ahead.

"It's an opportune time for a thorough review given the improved state of both the economy and the vaccination rollout, factors that are so closely intertwined and now working more clearly for the positive," said National Australia Bank analyst David de Garis.

"While there's no denying the better run of data and generally at or better than expected economic outcomes, prudence around the pandemic, including from variants, also argues for a degree of policy caution with a still very accommodating stance of monetary policy."

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09 June 11:17

Stor-Age's occupancy rate above 90%

The self-storage property fund Stor-Age doubled its headline profit per share over the past year to end-March.

The company owns 74 self-storage properties across both South Africa (52) and the UK (22), with current occupancy rates in both countries at around 90%.

Stor-Age said it collected over 98% and 99% of rental payments due in SA and the UK respectively. In South Africa, the company has a pipeline of nine new sites, and it is also expanding in the UK.

It declared a final dividend 54.08 cents, bring its total dividend for the year to just more than 106 cents – 5% lower than the 112c declared in the previous year. Its share price was up 1.5% at R13.58 in early morning trading on Wednesday on the JSE.

09 June 10:52

Bidcorp sales recently returned to pre-Covid-19 levels 

Bidcorp’s share price was up 1.5% after the company released a trading update for the ten months to April. The food service company says its trading was hit by a second wave of the pandemic that gripped both the UK and Europe from September 2020 onwards and continued through to April 2021. This has had a significant financial impact on these businesses.

"However, we are a well-diversified business, with Australia, New Zealand, and Asia doing well, and our other Emerging Market constituents continuing to slowly improve despite being subject to further Covid-19-related lockdowns."

However, the company said overall group sales for the last week of May 2021 have returned to 100% of our pre-Covid-19 normal. As recently as in January this year, its sales in Europe were down 57% compared to the previous period.

Its results in rand were boosted by the local currency’s weakness against the euro and the pound.

Free cash flow (excluding dividends but after operating cashflows, working capital, and capex) for the year to April 2021 amounted to an inflow of R2.2 billion, some R1.9 billion better than the comparative year to April 2020. The company added that inflationary pressures are building.

"We are not seeing too much direct food inflation yet but that will take a while to filter through. We are seeing large increases in the price of vehicles and mechanical handling equipment (and a total lack of availability), construction costs are escalating quickly (led by steel and wood), and energy prices in many geographies are increasing dramatically. All of this will likely lead to wage inflation. We are also unbelievably facing a labour shortage in many markets where the recovery has been quick and sharp, particularly in driver and warehouse roles."

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08 June 16:09

All eyes on US inflation data, European Central Bank

Stock markets traded narrowly mixed Tuesday with investors sitting tight ahead of key events this week, notably US inflation data and a meeting of the European Central Bank.

Thursday features both the publication of keenly-awaited US inflation numbers and the outcome of the ECB's latest rates meeting.

Investors are concerned that strong inflation as pandemic-hit economies reopen to the world could lead to higher interest rates, putting the brakes on recovery.

European indices won modest gains in afternoon trading on Tuesday after Asian equities mostly suffered small losses.

Wall Street opened mixed, with the Dow moving marginally lower.

Equities around the world are sitting close to record or multi-year highs after a stellar rally lasting more than a year, fuelled by central bank largesse, vast government stimulus worth trillions of dollars, the rollout of vaccines and easing lockdowns in major economies.

But there is an increasing fear that the explosive recovery in the US will send prices rocketing and force the Federal Reserve to wind back its market-supportive measures to prevent overheating, such as raising interest rates."

Investors are awaiting bigger events later in the week, which may spark some more movement in the markets," noted Fawad Razaqzada, market analyst at ThinkMarkets.

"The European Central Bank is likely to quell any calls for early tapering of its bond purchases programme, and this could see European indices extend their gains."

He added that unless the US inflation number "comes in well ahead of expectations, the Fed's stance will not change materially".

- AFP

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08 June 10:27

Asian markets decline ahead of key US inflation data

Markets mostly fell in Asia on Tuesday as investors awaited the release of key US inflation data later in the week, with another strong reading likely adding pressure on the Federal Reserve to begin reconsidering its ultra-loose monetary policy.

Equities around the world are sitting close to record or multi-year highs after a stellar rally lasting more than a year, fuelled by central bank largesse, vast government stimulus worth trillions of dollars, the rollout of vaccines and easing lockdowns in major economies.

But there is an increasing fear that the explosive recovery in the US will send prices rocketing and force the Fed to wind back its market-supportive measures to prevent overheating, such as lifting interest rates.

US Treasury Secretary Janet Yellen stoked those expectations at the weekend when she said that while any spike in prices caused by US President Joe Biden's proposed $4 trillion aid plan would be short-term, higher borrowing costs would actually be welcomed after a decade of low inflation and rates.

"When the [Fed policy board] will begin tapering its asset purchase programme is still front and centre for market participants," said Kim Mundy at Commonwealth Bank of Australia, adding that officials would likely begin discussing a wind-down of their bond-buying programme in July or September.

Thursday's data is expected to show consumer prices jumped 4.7% last month, which would beat April's figure and be the highest since 2008.

- AFP

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07 June 17:48

Market run helps to boost Sygnia

Asset manager Sygnia reported a 14% increase in revenue to R350.5 million for the six months to end-March, due mostly to an increase in the value of its assets under management and positive net inflows.

Assets under management increased by 10.5% over the six months under review, to R278.3 billion 

Total expenses rose by 10.2% to R206.7 million. Headline earnings per share increased by 17%.


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07 June 16:38

Foreigners snapped up SA shares, bonds last week

New data from the JSE show foreigners were the net buyers of almost R513 million in South African shares last week.

The JSE's All Share Index has gained more than 24% over the past year, and 13% since the start of the year. So far this year, foreigners have been net sellers of R15.7 billion in SA shares, compared to almost R44 in the same period last year.

Foreigners were also net buyers of more than R1 billion in South African bonds last year. So far this year, they have been net sellers of R28 billion, compared to net sales of R69 billion a year before.

07 June 14:43

Stocks rise after Yellen rate comments, G7 tax plan

European stock markets largely rose and the dollar fell Monday after US Treasury Secretary Janet Yellen downplayed fears over the prospect of higher interest rates triggered by a spike in inflation.

The rand was last at R13.46/$, from R13.43/$ on Friday, while the JSE's All Share Index was flat.

Investors weighed also moves over the weekend by the G7 group of wealthy nations towards an eventual global minimum corporate tax rate aimed firmly at tech giants seen as not paying enough.

Elsewhere Monday, US oil prices briefly topped $70 per barrel for the first time in 2.5 years as the pandemic-hit global economy pushes on with its recovery."

Inflation remains squarely in focus and the largest potential source of investors' angst and market volatility this week," noted Neil Wilson, chief market analyst at Markets.com.Yellen told Bloomberg News that US President Joe Biden should push ahead with his $4.0-trillion recovery plan for the world's top economy even if it triggers high inflation that leads to interest rate rises.

While optimism about the global economic recovery and vaccine roll-outs have spurred markets, trading floors remain worried that the rebound will cause strong price rises and in turn force central banks to hike borrowing costs.

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07 June 10:16

Gold, rand wilt after Yellen comments

Gold and the rand declined as investors weighed comments by Treasury Secretary Janet Yellen on interest rates against US jobs data which missed expectations. The dollar strengthened 

On Friday, gold rose 1.1% as a Labour Department report showed job growth picked up in May, though the 559,000 payrolls gain fell short of economists’ expectations.

Gold has been hovering around $1,900 an ounce amid a debate around price pressures and speculation over whether the Federal Reserve will start talks on the idea of tapering its massive bond-buying programme, with traders looking to Thursday’s U.S. consumer-price index report for more clues.

.“Gold prices pulled back slightly following Yellen’s comment about inflation and interest rates,” said Margaret Yang, a strategist at DailyFX. As a result, the 10-year Treasury yield rebounded, reflecting reflation hopes, she said. Real yields edged higher, denting the appeal of gold as the opportunity cost of holding it increased, Yang added.

Spot gold declined 0.4% to $1,883.36 an ounce at 7:07 a.m. in London. Prices climbed to $1,916.64 last week, the highest intraday level since Jan. 8. Silver and platinum fell, while palladium steadied.

The Bloomberg Dollar Spot Index ticked up after dropping 0.5% on Friday. The rand was almost a percent weaker at R13.49/$.

- Bloomberg, with additional reporting by Fin24

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07 June 10:01

SA reserves edge higher

The SA Reserve Bank reported that its net foreign reserves rose from $51.504 billion in April to $52.240 billion in May. Gross reserves increased from almost $53.7 billion to more than $54.1 billion.

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Rand - Aus dollar
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Gold
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