11 June 15:28
The Foschini Group rockets 13%
Clothing retailer The Foschini Group's share price rocketed on Friday, jumping by almost 13% to above R156 by early afternoon.
On Thursday, the company reported its results for the year which was better than it previously forecast.
Its headline earnings fell by more than 80% due in part to lockdown restrictions which hit its UK activities particularly hard. The group's largest segment, TFG Africa (dominated by South Africa), saw its turnover for the full year increase by 1.6%, thanks to record online sales and the inclusion of Jet in the second half – which contributed R2.2 billion in additional turnover.
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
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.
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.
10 June 17:04
US stocks rise, shrugging off latest inflation spike
Wall Street stocks rose early Thursday, pushing the S&P 500 into record territory, as the market evinced little worry over data showing higher US inflation.
The US inflation rate accelerated to five percent for the 12 months ending May as energy and used car prices rose, government data showed.
The rise topped expectations, but the sequential increase of 0.6 percent from April to May was lower than the 0.8 percent month-to-month rise from March to April, said Art Hogan, chief market strategist at National Securities.
That dynamic largely validates the Federal Reserve's stance that higher inflation will be transitory, he said.
"We may be getting close to a peak and it will start to decelerate in the June, July timeframe," Hogan said.
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 15:15
SA manufacturing stalls
Statistics SA's latest manufacturing production data show a fall of 1.2% in April, compared with March 2021. This followed a monthly increase of 3.7% in March and a decrease of 1.2% in February.
The manufacturing of food and beverages (+3.4%) as well as motor vehicles and parts (+11%) grew - but there was a downturn in the production of fuel, chemical products, rubber and plastic products.
Manufacturing production was up almost 88% compared to April 2021 - the height of hard lockdown in South Africa.
10 June 15:05
US inflation hotter than expected
The US CPI print came in at 5.0% vs expected 4.7% year-on-year, while the month-on-month number also printed a little higher at 0.6% vs 0.5%.
The rand has strengthened somewhat since the release and was last trading at R13.60/$.
10 June 14:54
MultiChoice profit up 32%, hikes stake in BetKing
DStv owner MultiChoice saw its core headline earnings jump 32% to R3.3 billion in the year to end March, with revenue up 4% to R53.4 billion.
The group increased its pay-television subscriber base by 7% by 1.4 million to reach 20.9 million households, split between 8.9 million in South Africa and 11.9 million in other African countries. Trading losses from African countries outside of South Africa shrank by R1.5 billion.
Despite production stoppages and travel restrictions brought about by the pandemic, it produced 19% more content than last year - some 4 567 hours. The company declared a dividend of 565c per share for the year. By early afternoon, Multichoice's share price was down 0.6% to R136.45.
The company also announced that increased its stake in African sports betting business BetKing from 20% to 49% in a $281.5 million (R3.8 billion) deal.
10 June 12:18
April mining production more than doubles
April mining production more than doubled compared to a year ago, data from Stats SA show.
Mining production increased by 116.5% year-on-year in April 2021. This comes off the low base of April 2020, when the hard lockdown "severely hampered" mining production, according to Stats SA's principal survey statistician, Juan-Pierre Terblanche.
The main contributors to the growth was platinum group metals (up 276.1%), gold (up 177.9%), manganese ore (up 208.2%) and iron ore (up 149.1%). On a month-on-month basis, mining production increased 0.3% in April, compared to March.
Mineral sales lifted 152.7%, year-on-year in April 2021. The biggest contributors were platinum group metals (up 465.9%), iron ore (up 115.6%) and gold (up 40.9%). On a month-on-month basis, mineral sales lifted 3.2% in April.
10 June 09:27
Foschini profit slumps 80%
The Foschini Group saw its group revenue fall 7.5% to R35.6 billion in the year to March.
Headline profit per share fell 80.8%, due in part to the impact of lockdowns across its various markets - as well as the more than R720 million it forked out on buying Jet stores from Edcon, and a R2.7 billion impairment of the carrying values of TFG London’s goodwill and intangible assets.
Its gross profit margin contracted to 45,5% (March 2020: 52,7%) mainly due to sales as lockdowns left it with "seasonal inventory". Group online retail turnover now contributes 12% to sales.
10 June 08:48
Rand slumps ahead of US inflation data
After trading around R13.40/$ earlier this week, the rand has lost a lot of ground in nervous trading ahead of US inflation data and a European Central Bank policy meeting on Thursday.
By Thursday morning, the currency was trading at R13.74/$, R16.74/euro and R19.41/pound.
The market is concerned that a spike in US inflation could bring higher interest rates sooner than expected. This would erode the rand's competitive advantage - SA interest rates are currently among the highest in major economies.
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.
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.
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.
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.
09 June 12:41
El Salvador adopts Bitcoin as its legal tender
El Salvador’s President Nayib Bukele said the nation has adopted Bitcoin as legal tender, a step he believes will create jobs and promote financial inclusion.
09 June 12:18
SA business confidence at highest level in three years
May's business confidence levels reached 97 points, the highest level recorded since March 2018 when the index was at 97.6.
The positive business climate was fuelled in part by stronger exports and the rand rally, according to the South African Chamber of Commerce and Industry.
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."
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 11:06
PPC takes a knock after trading update
In a trading update, PPC said that its headline earnings will be between zero cents and 5 cents per share, a sharp decrease from 54 cents per share for the prior period. This is mainly due to the impact of impairments of property, plant and equipment in 2020, some of which are now reversed.
In addition, accounting treatment of hyperinflation in Zimbabwe resulted in a loss of R200 million. The company also announced that it will sell its PPC Aggregate Quarries Botswana business for some R60 million.
Its share price fell by 2% to 328c in early trading on Wednesday.
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."
09 June 08:41
EOH sells Sybrin for almost R335 million
SA technology service provider EOH will sell payment software and services group Sybrin for almost R335 million.
The company will be bought by a consortium which includes Crossfin Technology.
Sybrin, which was founded in 1991, develops tech solutions to the banking and financial services companies, as well as to governments in 17 countries.
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".
08 June 13:23
SA economic growth beats forecasts
South Africa's first-quarter GDP grew by 4.6% on a quarter-on-quarter seasonally adjusted annualised basis, according to data released by Stats SA on Tuesday.
Economists had been more conservative in their projections, expecting quarter-on-quarter annualised growth to come in at 3.1%.On a non-annualised basis, growth was 1.1%.
Year-on-year, the economy contracted 3.2%.
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.
08 June 08:58
British American Tobacco more upbeat on sales
In a trading update on Tuesday, British American Tobacco upgraded its expected revenue growth of above 5% for 2021. It was initially looking at 3% to 5% revenue growth.
This was due in part to growth in its "non-combustible" products, like vaping. Consumers who use its alternative products grew by 1.4 million to 14.9 million in the first quarter of the year.
The company also saw a continuing recovery in emerging markets, and a "robust" US performance. But it doesn't expect a recovery in global travel retail (duty shops) until next year.
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%.
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 14:57
Thungela's disappointing debut
On Monday, Thungela Resources started trading on the Johannesburg and London stock exchanges. Anglo American unbundled all of its SA thermal coal assets into the company.
The new company met with a chilly reception from the market.
Anglo American’s SA coal spinoff, Thungela Resources, made a disappointing debut on the Johannesburg and London stock exchanges on Monday.
By early afternoon on Monday, its share price was trading at R22.46 - more than 10% lower than its starting point of R25 at the start of its first trading day on the Joburg bourse. The market valued the company at around R3 billion, which is much lower than some analysts projected. According to Bloomberg, Liberum Capital expected the company to have a market capitalisation of at least R5.9 billion. Anglo American’s share price fell by 2.8% – or around R23 billion in market capitalisation - to R604.91 on Monday morning. Anglo shareholders received one Thungela share for every ten Anglo shares that they held.
Anglo listed its South African thermal coal assets separately amid increasing investor pressure to become more environmentally friendly. Anglo wants to be carbon neutral by 2040, which it won’t be able to do with heavy-polluting assets like coal mines on its books.
The listing of Thungela was marred by a report, released this weekend, by the short-seller Boatman Capital. Boatman claims that the company’s clean-up costs for the mines, which are all expected to close in the next decade, could be three times greater than the amounts currently disclosed to investors, Bloomberg reported.
Boatman found that Thungela was worth "zero", as a result. In London, its share price halved during the course of the day.
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.
07 June 10:26
FirstRand expects strong profit growth as spending returns to pre-Covid levels
FirstRand - which owns FNB and WesBank - sees profit rising more than expected after the South African economy rebounded strongly from the early stages of the coronavirus pandemic.
Africa’s biggest bank by market value sees earnings per share rising by at least 35% in the year through June, according to a statement on Monday.
Impairments are significantly lower than anticipated and the cost of credit has improved, the Johannesburg-based company said.
“Current trends indicate that customers are utilizing discretionary savings as the economy has opened up,” FirstRand said. “Consumer spending is now back at pre-Covid levels.”
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
07 June 10:07
Asian markets mixed on Yellen rate comments, G7 tax plan
Asian markets were mixed Monday as investors mulled comments by US Treasury Secretary Janet Yellen on interest rates and weighed the impact of the G7 global tax plan on tech giants.
Yellen told Bloomberg News that President Joe Biden should push ahead with his $4 trillion recovery plan for the world's top economy even if it triggers inflation and leads to higher interest rates.
While optimism about the global economic recovery and vaccine roll-outs have spurred markets, trading floors remain worried that the rebound will stoke inflation and in turn force central banks to hike rates.
Yellen said any rise in prices due to Biden's massive plan to revitalise the US economy would be transitory and that higher interest rates would actually be positive."If we ended up with a slightly higher interest rate environment, it would actually be a plus for society's point of view and the Fed's point of view," the former Federal Reserve chair said in an interview Sunday with Bloomberg.
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.