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MONEY LIVE | Implats extends long-stop date for RBPlat takeover to the end of March

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27 January 12:20

Implats extends long-stop date for RBPlat takeover to the end of March

Platinum group metals miner Impala Platinum has extended the long-stop date for its proposed takeover of peer Royal Bafokeng Platinum by two months until the end of March, as it is still awaiting approval from regulators.

Competition authorities have already approved the takeover, but Implats still requires a compliance certificate from the Takeover Regulation Panel (TRP), as well as an approval from the JSE, for it to become unconditional.

Notwithstanding this, the TRP has indicated that challenges submitted by Northam related to certain alleged non-compliance of the TRP Code by RBPlat, which has withheld the issuance of the compliance certificate to date. Implats understands The TRP is engaging with RBPlat and Northam to resolve the challenges raised, the miner said in December.

"Implats continues to both engage with the TRP in a constructive manner to resolve the delay in issuing the compliance certificate and reserve its rights in the event the issue is not timeously resolved," Implats said on Friday.

Implats launched a takeover bid of Royal Bafokeng Platinum in late 2021, with Northam offered a competing bid about a year later. Impala has been steadily working to acquire RBPlat through an open offer to all shareholders of R90 cash per share plus 0.3 ordinary shares in Impala, worth about R151 on Friday. Northam Has offered R172.70 per share.

27 January 07:12

Asian markets build on rally on hopes US will avoid recession

Asian markets rose again Friday as fears about a possible recession in the US economy were soothed by data showing it grew more than expected in 2022, adding to the broadly upbeat tone across trading floors this year.

Investors tracked a rally on Wall Street fuelled by the figures, while they are now awaiting the release of closely watched inflation data later in the day and then the Federal Reserve's latest policy decision next week.

There is growing hope that the central bank will lift interest rates by just 25 basis points, having slowed its pace of increases last month following four straight bumper hikes aimed at bringing inflation down from multi-decade highs.

There was also a suggestion from the Bank of Canada that it could hold fire at its next gathering, following a programme of tightening.

"The BoC's explicit pause signal has many thinking whether other central banks will do likewise -- note BoC was one of the first to start the initial hiking cycle," said National Australia Bank's Tapas Strickland.

Central banks spent last year ramping up borrowing costs to battle soaring prices and any sign of strength in the economy was taken as a bad sign that policymakers would continue to tighten policy sharply, threatening companies' profits.

Concern towards the end of the year focused on a possible global recession caused by the restrictive policies, with several observers warning that top economies were likely to suffer a so-called hard landing.

Thursday's US growth figures showed a slowdown in 2022 from the previous year but a better-than-expected performance, which was described as a "Goldilocks scenario" -- where the figures are neither too good nor too bad.

Still, Strickland warned the labour market, which has remained tight during the pandemic recovery, could be showing signs of softening.

Strickland added: "Announced layoffs do suggest (initial jobless claims) should start ticking higher and continuing claims did rise more than expected.

"Overnight there were more announced layoffs happening from IBM, SAP and Dow, totalling more than 10,000.

"This spread of layoffs outside of tech is potentially important given firms had been holding onto workers after struggling to hire and retain them during the pandemic."

Investors are also keeping a nervous eye on earnings season, which has thrown up some disappointing figures and downbeat forecasts.

The latest was chip titan Intel, which predicted a surprise loss in the current period, while its sales range was well off forecasts by billions of dollars. Its worst possible scenario could see its lowest revenue since 2010.

Still, Asian traders remain well supported by China's reopening narrative, with expectations the world's second-biggest economy will enjoy a strong recovery this year after three years of damaging zero-Covid policies that essentially cut the country off.

Hong Kong continued its new year rally, while Tokyo, Sydney, Seoul, Singapore, Wellington, Manila and Jakarta were also on the rise.

Shanghai was closed for the Lunar New year break, with analysts predicting a strong performance when investors return to their desks next week.

Optimism over demand from a rebounding China was also able to provide support to oil prices and offset any lingering worries about the global economic outlook. 

- AFP

26 January 11:02

AVI flags muted profit growth, R22m load shedding hit

Consumer goods group AVI has flagged muted earnings growth for its half-year to end-December, with finance costs climbing as it bulked up stock to deal with supply-chain issues, while load shedding cost it R22 million.

Consolidated headline earnings per share are expected to increase to be flat or rise as much as 1% to end-December, the firm said in an update, with group revenue rising 7.2%.

Valued at R25.24 billion on the JSE, the firm had booked headline earnings of R1.05 billion in the prior period. The group's brands in SA include Five Roses, Bakers Biscuits, House of Coffees, Spitz and Gant.

The impact of load shedding was mitigated through back-up power, it said but nonetheless added R22 million to direct operating costs.

"While the indirect costs of chronic load shedding are difficult to quantify they are significant, exacerbating the complexity this imposes on our operations, supply chains and distribution logistics," it said.

Net finance costs were higher due to higher interest rates and higher average borrowing levels, with deliberate investment in inventory to support service levels and combat supply chain disruptions, it said.

I&J’s gross margins were substantially constrained by much higher diesel costs for the fishing fleet that were not fully recovered through selling price increases, and an unfavourable abalone sales mix. The latter issue had been prompted by lower catch rates and the re-emergence of lock downs in China and Hong Kong.

The firm's fashion interests fared better, with sound volume growth and price increases lifting revenue by 17.4% over the prior period. December’s retail sales were particularly strong, and were well ahead of pre-Covid levels, it said.

FNB portfolio manager Wayne McCurrie said while the update from AVI may have been a “little disappointing” the consumer goods group was “still in a very good position” to increase prices because of the pricing power of their brands and products.

This meant the company’s operating profit looked reasonable, with AVI being able to maintain its margins as it could absorb all of its direct input costs by increasing selling prices.v“So they did very well up until the gross profit level”.

For McCurrie the one division that does not fit in with the rest of AVI’s portfolio was the “volatile” I&J fishing business, saying the rest of the group was a “lot more stable”. With fishing you could get “very good years” and then dreadful ones, which made it a lot less stable.

It was fortunate though that its other businesses were able to compensate for it and help it maintain a stable operating profit, he said.

Shares of AVI, which expects to release its results in early March, were down only marginally to R74.92 in morning trade on Thursday, having risen by 0.7% over the past year.

26 January 08:29

OUTsurance flags significant earnings growth at Australian subsidiary Youi

Insurer OUTsurance, which listed on the JSE in December after swapping its listing with parent Rand Merchant Investment Holdings, has flagged a strong performance in Australia and in SA, although its earnings metrics are still being affected by past corporate activity.

Due to material, non-recurring items, earnings per share from continuing and discontinued operations for the six months to end-December is expected to fall more than 70%, the firm said in an update.

However, there was a significant increase in Australian insurer Youi's earnings due to strong premium growth, a material decrease in natural perils claims following more favourable weather exposure. Higher investment income attributed to the rising interest rate environment also helped, it said.

OUTsurance SA experienced favourable operating conditions owing to premium growth and claims experience, which is in line with historic performance, the firm said.

OUTsurance, valued at over R53 billion on the JSE, said it would release a more detailed trading update when it had more certainty.

OUTsurance's results are still being affected by the unbundling of its interests held in Discovery and Momentum Metropolitan Holdings in April 2022, while in December 2021, the group announced the sale of UK insurer Hastings, making a R4.7 billion profit.

26 January 05:53

Hong Kong returns to lead most Asian markets higher

Most Asian markets rose Thursday as the majority returned from the Lunar New Year break on an optimistic note, with inflation slowing and central banks hinting at a lighter approach to tackling prices.

Hong Kong led the way again, helped by hopes that China's reopening will fuel a strong recovery this year, while Bloomberg News said travel and box office numbers for the holidays were encouraging.

But uneven earnings from tech giants largely kept sentiment in check and saw Wall Street end on a soft note, with the Nasdaq in the red.

Traders are now awaiting the release of US growth data on Thursday and the Federal Reserve's preferred gauge of inflation Friday.

Still, Asia continued to outperform after a strong start to the year.

Next week, the Federal Reserve will make its latest policy decision since slowing its pace of rate hikes in December after four straight 75 basis-point increases.

Speculation has been building in recent weeks that the bank could take its foot off the pedal as data points to inflation coming down quicker than expected and other indicators suggest last year's tightening was taking hold in the economy.

And while there remains some concern that the world's top economy could tip into recession, there is growing hope it can achieve a so-called soft landing.

Hong Kong jumped more than one percent Thursday -- having already piled on more than 10 percent in 2023 -- while Singapore, Wellington and Manila were also up, though Tokyo dipped.

Seoul edged up as data showed South Korea's economy shrank in October-December -- for the first time since the second quarter of 2020 -- giving the central bank room to tone down its pace of rate hikes.

And SPI Asset Management's Stephen Innes was upbeat.

"Once we chop through the cudgel of earnings reports, one can reasonably expect the buyback tailwind to resume in force come February," he said in a commentary.

"The opportunity set in non-US markets continues to look more attractive. And while China remains the faster horse in the race, still after a run of resilient activity data, lower gas prices, easier financial conditions and earlier China reopening, investors should take note of the solid non-recessionary vibes emanating from Europe."

Oil prices edged up and have consolidated around their November highs on China demand expectations, with officials saying the number of daily Covid deaths had fallen nearly 80 percent since the start of the month.

The figures will come as some relief to investors who feared that a wave of infections across the country would offset the benefits of dispatching the zero-Covid strategy that hammered the economy for three years.

-AFP

25 January 10:35

Microsoft quarterly results saved by cloud computing

Microsoft on Tuesday said sales slowed and profits slumped in the last quarter of 2022 as a darkening economic outlook pushed it to lay off 10,000 workers.The Washington state-based tech giant -- owner of LinkedIn, Xbox and Windows -- said overall sales rose just two percent in the October-to-December period, to $52.7 billion, the slowest rise in six years.Net profit landed at $16.4 billion for the quarter, down 12 percent year-on-year, according to its earnings release.The results however met, or in some segments exceeded, expectations and Microsoft's share price was up by more than four percent in late trading after the results were announced.

Microsoft chief executive Satya Nadella last week said he was laying off about five percent of the company's workforce, just days before pumping several billion dollars into OpenAI, the company behind the controversial chatbot ChatGPT.The job cuts matched similar culls at other tech giants as companies reversed a major hiring spree during the pandemic when demand for tech products exploded.

Nadella has said that ChatGPT, and other artificial intelligence breakthroughs by the OpenAI research company, would be integrated into Microsoft products that include the Windows operating system, Office and the Bing search engine.Microsoft is also trying to overcome major regulatory hurdles to complete its buyout of video gaming giant Activision Blizzard for $68.7 billion.

US and EU regulators are highly skeptical of the purchase and allege it would give an unfair advantage to Microsoft's Xbox console over rivals like Sony's PlayStation.The group's quarterly results were eagerly awaited by the market for the closer they offer at cloud computing, which is Microsoft's biggest business and a bellwether for the larger economy.The company's "intelligent cloud" business, which brings together its servers and data analytics services, brought in $21.5 billion in the second quarter of its fiscal year, up 18 percent year-on-year.The growth of its remote computing platform, Azure, slower than usual at 31 percent, carried the activity.

- AFP

25 January 06:30

Asian markets swing as traders weigh growth outlook

Asian markets fluctuated Wednesday as traders in several countries returned from the Lunar New Year break to a soft lead out of Wall Street with recession fears still causing concern.

While equities have enjoyed a strong start to the year as a slowdown in inflation gives central banks room to temper their interest rate hikes, focus is now turning to the impact of last year's increases on the economy.

Worries about the growth outlook and the impact on higher rates on company profits is also offsetting optimism over China's reopening from years of strict zero-Covid measures.

Data showing a slight improvement in US factory and services activity was unable to settle nerves, with the figures still showing the sectors in contraction.

Focus is now turning to next week's Federal Reserve policy meeting, with speculation growing that it will lift rates by 25 basis points.

Traders will also be poring over the bank's statement for an idea about future moves.

A mixed bag of US earnings reports failed to ease concerns, and there is talk that the gains across markets since the turn of the year may have run too far for now.

"As we leg further into earnings season with news from a broader swath of the economy, investors will focus intently on the nuts and bolts of the economy and pay more attention to what Corporate America is saying before making their next directional move," said SPI Asset Management's Stephen Innes.

In Asian trade, Tokyo was slightly higher after rallying more than three percent over the previous three trading days.

Seoul and Singapore each jumped more than one percent as investors returned from the break to play catch-up with a regional advance, while Wellington was also up. Sydney dipped.

Oil prices edged up after suffering a hefty drop Tuesday as traders weigh the prospects of recession against the outlook for demand from China as it emerges from its zero-Covid policy.

Still, both main contracts remain at levels not seen since November.

-AFP

24 January 12:31

Clicks reports sales lift and market share gains

Pharmacy group Clicks says it has managed to carve out additional market share as trading patterns continue their normalisation from Covid-19.

Retail sales, excluding Covid-19 vaccinations, rose 12.2% in the 20 weeks to 15 January, the group said in a trading update on Tuesday, with sales in comparable stores rising 8.9%.

"Clicks reported particularly strong growth in beauty, personal care and baby with customer purchasing behaviour normalising post the relaxation of Covid-19 regulations," CEO Bertina Engelbrecht said in a statement.

She added that the double-digit retail sales growth was achieved despite the significantly higher levels of load shedding which affected trading patterns, particularly in December and January.

"In this disrupted environment Clicks continued to focus on its strategic growth drivers of value, convenience and differentiation in response to the needs of our customers throughout our expanding store, pharmacy and online presence."

Excluding vaccinations, selling price inflation averaged 6.8%, more than twice the prior year, the group said. Clicks had earned only R4 million from vaccinations during the period under review, down from R685 million previously, and including this, sales rose 5.5%.

In midday trade on Tuesday the group's shares were up 0.39% to R277.28, having fallen by just over 10% in a one-year period.

24 January 10:09

Balkin takes over as Foord investment head

Nick Balkin (43) has been appointed as Chief Investment Officer at Foord Asset Management South Africa.

He takes over from Dave Foord, who has been in the role since Foord’s founding in 1981.  

Balkin has been with Foord since 2005, when he joined as an equity analyst. He has been a portfolio manager since 2010, and has also been head of research at the firm.

Foord will remain in the role of global CIO, and remains a portfolio manager on Foord’s multi-asset portfolios in South Africa and globally.   

<p><strong>Balkin takes over as Foord investment head</strong></p><p>Nick Balkin (43) has been appointed as Chief Investment
Officer at Foord Asset Management South Africa.</p><p>He takes over from Dave Foord, who has been in the role since
Foord’s founding in 1981. 

&nbsp;
</p><p>Balkin has been with Foord since 2005, when he joined as an equity analyst. He has been a
portfolio manager since 2010, and has also been head of research at the firm. </p><p>Foord will remain in the role of global CIO, and remains a portfolio manager on Foord’s multi-asset portfolios in South Africa and
globally.&nbsp; &nbsp;</p>

24 January 07:11

Asian markets track Wall St rally

Tokyo led gains across Asian markets again Tuesday in another day thinned by the Lunar New Year break, with sentiment boosted once more by a surge on Wall Street.

Tech firms provided the support in New York as traders gear up for the release of earnings from big-ticket firms including Microsoft and Intel.

Hopes that the Federal Reserve will slow down its pace of interest rate hikes have also given investors optimism that the US economy could avert a recession, or at least suffer only a mild contraction.

The gains come after markets suffered a wobble last week on worries about a downturn caused by a series of interest rate hikes last year aimed at bringing inflation down from decades highs.

"With little new news to guide sentiment, the overnight (on Wall Street) move could be a product of investors getting comfortable with the current macro backdrop while cleaning the slate of last week's trepidation or simply positioning ahead on next week's (Fed policy decision)," said SPI Asset Management's Stephen Innes.

He added that inflation coming down suggested the days of jumbo 75-basis-point hikes were in the past, with "most officials across the hawk-and-dove spectrum signalling a preference for a slower rate hike pace".

After Wall Street's rally, Asia picked up the baton on Tuesday, though most markets were shut for the holidays.

Tokyo added more than one percent again while Sydney, Manila, Jakarta and Wellington were also well up.

But while the year has started on a positive note, BlackRock Investment Institute strategists had a word of warning."Markets have leapt ahead this year, driven by China's reopening, falling energy prices and slowing inflation," they wrote.

"This has spurred hopes of a soft economic landing, plummeting inflation and interest rate cuts. We see markets vulnerable to negative surprises -- and unprepared for recession."

Oil prices were barely moved after jumping last week to their highest point since November on demand hopes fuelled by China's reopening.

"Crude prices are wavering as the dollar stabilises and over-exhaustion from China reopening headlines," said OANDA's Edward Moya.

"The economy still could roll over and some energy traders are still sceptical on how quickly China's crude demand will bounce back this quarter.

"This week will learn a lot about the crude demand outlook after we hear earnings from the airlines and Chevron. Oil should be stuck in wait-and-see mode until we learn more about the health and outlook of the US economy."

- AFP

23 January 12:39

Cashbuild reports sales dip during festive period

Cashbuild, SA's biggest retailer of building materials and associated supplies, has reported a dip in sales for its second quarter to end-December, despite selling inflation of 4.5%.

Group revenue fell 5% in the three months to end-December, with existing store revenue falling 6%, the firm said in a brief update. During the second quarter, the group opened three new Cashbuild stores, and closed one non-performing P&L Hardware stores, bringing its total to 316 at period end.

The firm also completed a number of refurbishments, part of an ongoing strategy to improve its footprint.

Cashbuild, valued at R4.75 billion on the JSE, had said at the release of its 2022 results that it expected trading conditions to be tough, given rising inflation and interest rates.

It had also flagged a notable increase in independent competitors, and a concerning increase in unregulated and inferior products on the market.

 In afternoon trade Cashbuild’s shares were down 0.53% to R189, having lost about 30% over the past year.

23 January 10:09

Renergen lifts after reporting first liquid Helium production

Renergen’s share price jumped 7% in Monday morning trade on news that its Virginia gas project has produced its first liquid helium.

The natural gas and helium producer said the helium module is now operational and being optimised.

"All components of the Phase 1 plant are now in operation, and South Africa joins the ranks of only eight countries in the world to produce this rare and valuable liquid," said Renergen CEO Stefano Marani.

The company share price rose 7% to R26.48 per share on Monday morning.

23 January 07:16

Dollar drops, Asian markets mixed in Monday trade

Asian markets were mixed in holiday-thinned trade Monday, while the dollar dropped as investors lowered their expectations for US interest rate hikes.

Tokyo was the standout performer, rallying more than one percent following a blockbuster performance on Wall Street, where all three main indexes enjoyed a strong end to last week thanks to a tech rally.

Comments from top Federal Reserve officials provided support to equities after they indicated the bank could lift rates at a much slower pace as inflation gradually comes down.

Governor Christopher Waller said he was open to a 25-basis-point lift at the next policy meeting, though he did point out that the market's view on inflation was "very optimistic".

Meanwhile, Philadelphia Fed boss Patrick Harker again called for slower increases.

And Kansas City boss Esther George said she was optimistic the world's top economy could still achieve a soft landing, despite worries that a series of big rate hikes last year would tip it into recession.

Adding to the positive mood is China's re-emergence from years of zero-Covid measures that essentially cut the country off from the rest of the world, hammering growth.

With most of the region closed for the Lunar New Year holiday, trading was thin.Still, Tokyo led gains, while Sydney was also in positive territory.

However, there were small losses in Manila and Wellington.

"Although most Asian markets are closed for Chinese Lunar New Year celebrations, Japanese and Australian stocks are picking up on the better mood from US investors and on expectations of China's economy returning to some semblance of a pre-pandemic trend," said SPI Asset Management's Stephen Innes.

Lower expectations for US interest rates weighed on the dollar against its major peers, while oil prices were also down after last week hitting its highest level since November.

-AFP

21 January 08:35

JSE loses ground, even as global stocks conclude volatile week on positive note

Global stock markets rebounded on Friday after a rocky week dominated by uncertainty over whether the global economy will suffer recession this year as central bankers continue to address inflation.

But the JSE's All Share index ended down by 0.3% after Mr Price fell more than 7% following a gloomy profit update. Angloplat and Spar fell more than 4%. Major indices in New York, which have been under pressure most of this week, enjoyed a buoyant session, led by tech shares following strong Netflix subscription figures.

The streaming giant reported lower quarterly profits, but Netflix shares surged 8.5 percent after subscriber figures topped analyst estimates, as hits such as "Wednesday" and "Harry & Meghan" drew in new viewers.

Analysts also cited comments from Federal Reserve Governor Christopher Waller endorsing a 25-basis point interest increase at the Fed's next meeting, smaller than other recent hikes.

"After four or five days of down markets, investors probably feel that most of the bad news is already out and perhaps the selling was overdone," said Jack Ablin of Cresset Capital.All three major US indices rose, with the Nasdaq leading with a 2.7 percent jump.The gains in New York followed earlier up sessions in Asia and Europe.

"Having seen such a strong start to the year, there was always the probability that we'd see a little bit of profit taking," said market analyst Michael Hewson at CMC Markets.

"However, that doesn't mean that the ... optimism that has been the hallmark of this early year rebound is evaporating, and that we might start to see a sharp move lower."On currency markets, the yen retreated against the dollar, even as data showed Japanese inflation hit a four-decade high.

Analysts are not convinced that despite rising prices, the Bank of Japan will start to raise interest rates.

Oil prices meanwhile extended Thursday's gains as investors focused on the recovery in demand from China. Suggestions that the country's Covid infections may have peaked added to the optimism among commodity traders.

"The overarching concerns of a global slowdown remain, even though ... investors are still pinning their hopes on a significant boost from the reopening in China," noted Richard Hunter, head of markets at Interactive Investor.

"This possible division of prospects between Asian and other economies is propping up Chinese markets in particular, albeit amid a rocky start to the year."

Google's parent company Alphabet on Friday announced plans to axe about 12,000 jobs worldwide, propelling shares up by nearly six percent.

The move came a day after Microsoft said it would reduce staff numbers by 10,000 in the coming months.

Similar layoffs by Facebook owner Meta, Amazon and Twitter have also been announced as the previously unassailable tech sector faces a major economic downturn.

- AFP

20 January 16:19

Attacq says Mall of Africa footfall climbed by double-digits during festive period

Property group Attacq, which owns the Mall of Africa and Waterfall City, says it is pleased with a double-digit rise in both turnover and footfall at its centres over the last two months of 2022.

Total turnover increased from 2021 by 12.6% and 15% for the months of November and December respectively, it said in an update, adding the performance at the Mall of Africa was particularly pleasing.

Turnover in the restaurant category at the Mall of Africa surged 45% and shoes 29%, while cosmetics more than doubled.

These increases, plus the increases in November 2022, led to a total client turnover exceeding R1.3 billion for the two months combined, it said.

Mall of Africa's foot count in November and December increased year-on-year by 10.8% and 15.5% respectively.

"The continued success of the leasing strategy at Mall of Africa is evidenced by our replacement clients' performance and the increased foot count," it said.

Attacq's shares were down 3.06% in afternoon trade on Friday, and have lost a similar amount over the past year.

20 January 08:01

Most Asian markets up as traders weigh China hope, recession fear

Asian markets mostly ticked higher Friday after a rocky week that saw recession fears return to the fore, offsetting growing hope that China's emergence from zero-Covid will help boost the struggling global economy.

While falling US inflation has fanned speculation the Federal Reserve will further slow its pace of interest rate hikes, several top bank officials have lined up to warn that still more needs to be done before they are satisfied prices are under control.

Vice Chair Lael Brainard on Thursday said policymakers would "stay the course" in lifting rates, adding they would need to "be sufficiently restrictive for some time".

And New York Fed chief John Williams foresaw further increases to get inflation back to two percent, from its current 6.5 percent.

Meanwhile, a series of weak indicators suggesting the economy continues to slow have rattled nerves as traders shift their view from "bad news is good news" -- as it allows the Fed to slow its rate hikes -- to "bad news is bad news".

An underwhelming earnings season so far has added to the sense of trepidation among investors, particularly in New York, where all three main indexes fell again Thursday.

However, the mood in Asia was more upbeat as traders prepared for an expected boost from China's reopening after three years of painful lockdowns.

"Given the sizeable upside for regional trade supporting local economies... stocks in Asia are nudging up despite weakness in the US market as East versus West divergence continues," said SPI Asset Management's Stephen Innes.

"After all, mainland China is the largest export market for most regional economies, so the China reopening bounce is particularly pronounced locally."

That was reflected in early trade in Asia, where Hong Kong led gains with Tokyo, Shanghai, Sydney, Jakarta and Wellington also edging up. Still, Singapore, Seoul and Manila dipped.

On currency markets, the yen weakened against the dollar, even as data showed Japanese inflation hit a four-decade high of four percent, adding fuel to talk that the Bank of Japan will again tweak monetary policy, or even lift rates.

The news came a day after the central bank decided not to tighten again, having announced a surprise widening of the trading band it allows certain government bonds to trade in.

Oil extended Thursday's gains as investors focused on the recovery in demand from China, with suggestions that the country's Covid infections may have peaked adding to the optimism among commodity traders.

-AFP

19 January 19:55

Fortress loses REIT status

Property group Fortress has lost its real estate investment trust (REIT) status, after a final decision by the JSE.

Losing its REIT status means it will have to pay corporate income tax.

The JSE gave Fortress until the end of November to comply with requirements for a REIT that it must distribute at least three-quarters of its distributable earnings to shareholders.

After failing to comply with its requirements, the JSE announced that its status would be revoked. The company objected in December, but on Thursday, the JSE announced that it had dismissed the objection and the REIT status of Fortress will be removed on 1 February.

Fortress has a dual-class share structure, with equal voting rights, although its A shares get preference for dividends, using a benchmark that is adjusted for inflation, with the B shares receiving the remaining earnings.

This means that Fortress cannot pay a distribution, as its distributable earnings for its second half to end-June were R876.9 million, below a benchmark for its A shares that totalled R967.9 million.

Distributable earnings in the first half were R830.5 million, also below the R979.9 million required. The board recently proposed a scheme of arrangement to shareholders, requiring 75% approval, to collapse the dual-share structure into a single share. However, this scheme failed to pass during the meeting in August and, as such, Fortress remains listed with the dual-share structure in place. 

19 January 06:54

Asian markets track Wall St lower as recession fears return

Most stocks dropped alongside oil prices Thursday and the dollar weakened after disappointing US data renewed worries about a recession in the world's biggest economy.

The optimism that has flowed through trading floors since the start of the year has taken a knock this week as concern about inflation and rising interest rates are replaced by growth fears and their impact on company profits.

The downbeat mood overshadowed hopes that China's economy will enjoy a strong recovery this year -- having suffered its worst annual growth in 46 years in 2022 -- as it moves away from its zero-Covid policy.

All three main indexes on Wall Street sank more than one percent Wednesday in response to figures showing retail sales, and shrank at the quickest pace in more than a year, while producer prices fell the most since the beginning of the pandemic.

Industrial production also came in worse than forecast.

'Bad news is bad news'

While data indicating the economy was struggling has in recent months spurred equities on hopes it will allow the Federal Reserve to slow down its pace of rate hikes, analysts said traders are now concerned about the economic outlook.

"'Bad news is bad news' once again for markets, with weak retail sales and industrial production seeing risk assets sell-off," said National Australia Bank's Tapas Strickland.

The data "adds to the theme of the economy slowing and heading into recession in 2023, and pushes back on the soft landing narrative dominating markets since January".

In early trade Tokyo, Hong Kong, Shanghai, Singapore and Manila all fell, though Sydney, Seoul and Jakarta edged up.

Wellington's NZX 50 and the New Zealand dollar suffered only small losses despite Prime Minister Jacinda Ardern's shock announcement that she will step down next month, saying she no longer has "enough in the tank".

Expectations that US interest rates will not rise as much as previously feared weighed on the dollar, with the yen bouncing back strongly after Wednesday's Bank of Japan decision not to further tweak monetary policy.

However, several Federal Reserve officials have pushed back against such speculation, warning they will continue to tighten policy until they have brought inflation down from its multi-decade highs.

Worries about recession were also weighing on oil prices, despite hopes for a spike in demand as China reopens to the world. Both main contracts dropped more than one percent in early exchanges.

But SPI Asset Management's Stephen Innes said Asian investors could be in for a positive year.

"The clear message to start 2023 has been clear as a whistle: while last year was about Fed and ECB normalisation, this year will be about China and Japan normalisation, which should continue to drive Asia's fortunes higher in 2023," he said in a note.

- AFP

18 January 12:45

Novus CEO Neil Birch to step down in 2023

Printing and manufacturing group Novus said on Wednesday CEO Neil Birch will retire in the course of 2023, in line with its retirement policy.

Birch joined the group in 2017 as the non-executive chairperson, and stepped into the CEO role in May 2018.

He has effectively executed his promised strategy, specifically playing a pivotal role in the restructuring of the company to be fit for purpose, the group said, and was played a key role in the recent acquisition of educational materials group Pearson SA.

In August 2022, Novus said it had acquired 75% of Pearson SA for about R830 million.

Shares in Novus were up 9.24% in afternoon trade on Wednesday, and have risen by more than 60% over the past year. 

18 January 06:59

Asian markets up on recovery hopes, yen sinks after BoJ decision

Asian markets mostly rose Wednesday following a mixed lead from Wall Street as traders fought to maintain the strong start to the year, while the yen sank after the Bank of Japan decided against further tweaking monetary policy.

Weak earnings from banking titan Goldman Sachs, a jobs warning by Microsoft and a plunge in manufacturing data highlighted the bumpy road ahead for the United States, the world's top economy, even as optimism over inflation and the interest rate outlook improved.

Still, hopes for China's recovery continued to provide much-needed support, with the country's Vice Premier Liu He telling the Davos forum growth will likely rebound this year as it reopens from zero-Covid, and adding that Covid infections had peaked.

His comments came after data showed the economy expanded last year at its slowest pace since 1976 -- excluding pandemic-hit 2020 -- but beat forecasts.

The news added to hopes for a global recovery after last year's pain caused by rising prices, rate hikes, China's economic woes, a spike in energy costs and the war in Ukraine.

"Last fall, there was broad consensus that China was in the wrong place, Europe was slipping into a recession, and the Fed was ultimately caught 'wrong-footed' by very sticky inflation," said SPI Asset Management's Stephen Innes.

"But fast-forward to these early weeks of January, and China's reopening has put the country on a path to much better growth; investors are far more optimistic about Europe's recovery and the bane of all ills US inflation is even starting to recede."

In early equity trade, Hong Kong, Shanghai, Tokyo, Sydney, Singapore, Wellington, Manila and Jakarta were all on the rise, though Seoul dipped.

The yen tumbled from around 128.50 per dollar to more than 130 Wednesday after the Bank of Japan left its key policy rate unchanged. It also tumbled against the euro and sterling.

Traders had been keenly anticipating the decision, which came after the BoJ last month shocked markets by announcing a tweak that allowed its tightly controlled bond yields to move in a wider bracket.

The move in December sent the yen soaring, and while the bank held firm Wednesday there is a growing expectation that officials will eventually move away from the policy of buying up bonds to keep yields in check.

"Speculation will remain that it will eventually review its policy," said Takehide Kiuchi, executive economist at Nomura Research Institute and a former BoJ policy board member.

"Market focus will now shift to the appointment of a new governor," he told AFP, noting that the bank needs to "make its policy flexible" whoever is appointed.

However, other observers said if the BoJ continued to stick to its position, the Japanese unit could fall back to around 135 per dollar.

The strategy has been in place for years as the BoJ tried to boost the stuttering economy by keeping borrowing costs low, but with other central banks hiking the yen came under immense pressure and hit a three-decade low around 152 per dollar in October.

- AFP

17 January 12:03

EOH warns of tough conditions, says capital raise still a strategic imperative.

Technology firm EOH said on Tuesday trading conditions remain challenging given a slowing global economy and various problems in SA, with rising interest rates putting pressure on its finance costs despite lower debt, and making its capital raise a strategic imperative.

In a pre-close update for the six months to end-January, EOH said revenue had grown faster than inflation so far in the period, but due to, among other factors higher interest rates, there had only been a modest reduction in finance costs.

This was despite debt having fallen from R1.3 billion at the end of its 2022 year to R1.2 billion, with the group adding that its strategic capital raise "therefore remains a strategic imperative."

EOH has proposed a capital raise, comprising a R500 million rights offer and a R100 million specific issue of shares for cash to EOH's black empowerment partner, Lebashe Investment Group, which is expected to open on 30 January. A circular is expected to be released on 23 January.

EOH - whose business dealings with government departments featured prominently during sessions of the State Capture Inquiry - has been on the path of turning around its operations and pursuing disposals, which has been essentially completed.

The firm said its operating environment remained difficult, however, with supply-chain issues continuing to affect project delivery, even as global economic conditions due to, among other factors, the war in Ukraine and tougher monetary policy conditions.

In SA, the prolonged macroeconomic effects of the pandemic, riots, the flooding in KwaZulu-Natal, the lack of investment in the mining and rail sectors as well as the increased frequency and severity of loadshedding is placing severe strain on the economy, it said.

In afternoon trade EOH's shares were down 2.86% to R3.40, having fallen by almost a third over the past six months.

17 January 10:11

Rand weakens above R17/$ as some economic gloom sets in

The rand had weakened above R17/$ to its worst level in about a week on Tuesday morning, with investors digesting a gloomy outlook for SA's economy, as well as Chinese GDP data.

The rand had been unperforming emerging market peers, TreasuryONE currency strategist Andre Cilliers said in a note on Tuesday, and had weakened as much as 2% on Monday, and closed at R17.01/$.

The government and Eskom are facing legal challenges over the ongoing power outages, while President Cyril Ramaphosa has had to cancel his trip to the World Economic Forum in Davos due to the electricity crisis.  The rand was further hit by riots in Johannesburg and a stronger dollar on the day, he said.

Markets are also digesting Chinese economic data, which showed on Tuesday the world's second-largest economy grew 3% in 2022.

Chinese macro data has shown the second worst year of growth since the 1970s, but this was expected given the recent lockdowns, said Nedbank Corporate and Investment Banking analysts in a note. Mining stocks have reacted negatively and are seeing profit taking across the board on the back of the weaker print.

17 January 09:46

Delta Property Fund says R22.1m sale of Kimberly property has fallen through

Delta Property Fund, which mostly lets to government tenants, says a proposed R22.1 million sale of a property in Kimberly has fallen through, given the proposed purchasers were unable to meet their obligations.

The firm said it would continue to market and seek a buyer for the property.

Delta, valued at R207 million on the JSE, had a property portfolio worth R7.5 billion at the end of August. It is, however, struggling with its R4.4 billion net pile, and looking to offload assets in order to tackle a loan-to-value of just above 68%.

The firm said in its half-year results to end-August it had nine properties awaiting transfer, amounting to R232 million.

Delta's shares were unchanged at 29c in morning trade on Tuesday, having just over halved over the past year.

17 January 06:56

Asian stocks struggle, even as China growth tops forecasts

Asian stocks mostly fell Tuesday but pared early losses after data showed China's economy grew more than expected last year, while traders remain hopeful about the country's outlook as it emerges from years of debilitating zero-Covid measures.

The three percent expansion was the slowest in four decades -- excluding pandemic-hit 2020 -- and sharply down from the previous year, as widespread lockdowns and other containment policies hammered business activity.

However, it beat the 2.7 percent forecast and the fourth-quarter reading also topped estimates, while a healthy reading on retail sales provided extra cheer.

There is now growing optimism that the reopening that started last month will fuel a strong rebound this year and help support the global economy as central banks try to avert a recession caused by soaring inflation and interest rate hikes.

"Looking forward, we expect to see a sustained economic recovery in 2023 as a result of reopening and policy stimulus," said Chaoping Zhu, of JP Morgan Asset Management.

"Service sectors should be the early beneficiary when pent-up demand is released."

Regional markets, however, struggled to maintain the strong momentum that has characterised trading at the start of the year, which has been powered by China hopes and signs that the battle against inflation appears to be turning in central banks' favour.

Hong Kong, Shanghai, Sydney, Seoul, Singapore, Taipei and Manila were all in negative territory, though there were gains in Tokyo, Wellington and Jakarta.

Wall Street was closed Monday for a public holiday.

Still, analysts remain upbeat."We are in the early phase of recovery in terms of asset prices," said Paras Anand, at Artemis Investment Management.

"A recovery or normalisation of the Chinese economy will be positive for global growth at the margin."

Traders are now awaiting a key policy decision by the Bank of Japan on Wednesday, which comes after it last month surprised markets by announcing a shift away from its ultra-loose monetary policy, sending the yen soaring.

The bank has kept a tight rein on bond yields for years in an attempt to kickstart economic growth, but it came under pressure in recent months as other countries ramped up interest rates to fight inflation, pushing the yen to multi-decade lows.

Speculation is now swirling that it will further tweak policy or indicate that another adjustment is in the pipeline.

"The real market surprise will be if the Bank of Japan leaves policy unchanged or abandons yield curve control completely," Tony Sycamore, of IG Australia, wrote in a note.

There will also be a focus on speeches by top finance officials at the annual Davos summit in Switzerland this week.

And Wall Street titans including Goldman Sachs, Morgan Stanley and Netflix are due to release earnings, which could give an insight into how business is coping with the effects of higher rates.

-AFP

16 January 09:56

MTN slumps as market digest R13bn tax bill in Ghana

Shares of Africa's largest mobile operator slumped on Monday morning, with the market considering news that authorities in Ghana had slapped it with a $773 million (R13 billion) tax bill.

MTN said after markets closed on Friday that Ghana's Revenue Authority had issued a temporary withdrawal of the notice of the Assessment on 13 January, providing a 21-daytimeline to allow for further engagement.

The mobile operator generates just over a tenth of its revenue in Ghana, which is its third-biggest market, and the audit period covers 2014 to 2018.

The base component of the assessment, or excluding penalties and interest, on MTN Ghana’s analysis, infers that it under declared its revenue by approximately 30% over the audit period, the mobile operator said.

In morning trade MTN's shares were down 6.43% to R126.94, while Vodacom was flat and Telkom had fallen 1.3% to R35.03.

16 January 07:10

Most Asian markets rise on optimism over China, rates

Shares mostly rose in Asia on Monday following another rally on Wall Street fuelled by optimism over the world economy as inflation slows and China reopens to the world.

After last year's battering caused by surging prices and central bank interest rate hikes, there is a much calmer mood on trading floors, with recession fears receding and bargain-buying providing support to equities.

While China is expected this week to report its worst annual growth since 1976 -- excluding pandemic-ravaged 2020 -- its emergence from zero-Covid and pledges to boost key sectors are raising hopes for a strong rebound in 2023.

Signs that the government was taking a lighter touch on the tech sector after a long-running crackdown were also lifting confidence and giving a big lift to market majors, including Alibaba and Tencent.

And HSBC's Frederic Neumann said China's emergence from almost three years of strict containment measures would likely boost the global economy.

"As the second-largest economy in the world, accelerating Chinese household and investment spending will help put a floor under global trade at a time when demand in the West is faltering," he said.

The brighter outlook helped Asian markets in early trade Monday.

Hong Kong was among the biggest gainers and is not up around 10 percent since the start of the year, while Shanghai, Sydney, Seoul, Singapore, Taipei, Manila, Wellington and Jakarta also rose.

Tokyo, however, dropped as a stronger yen weighed on exporters.

The Japanese unit has surged in recent weeks thanks to an expected slowdown in Federal Reserve rate hikes and after the Bank of Japan signalled a shift away from years of ultra-loose monetary policy.

Expectations the Fed will hike rates by just a quarter-point at its next meeting have pushed the greenback down against other major peers including the pound and euro.

Last week's data showing US inflation at its lowest since October 2021 has boosted equities and lowered bets on a recession in the world's top economy.

The improving sentiment was highlighted by news that US consumer confidence hit a 12-month high in December, helped by a drop in gasoline prices.

And there is growing optimism that the worst-case scenario of a so-called hard landing for the economy -- caused by soaring borrowing costs -- will not happen.

"Driven by the combination of China re-opening and falling natural gas prices, the market is forced to upgrade its pessimistic growth outlook for this year," said SPI Asset Management's Stephen Innes.

"Peak recession fears may end sooner rather than later, and H2 could see a renewed pick-up in economic activity precisely when major central banks stop hiking."

- AFP

13 January 07:58

Most markets rise as US inflation boosts Fed slowdown hopes

Asian markets mostly rose again Friday and the dollar remained under pressure after data showing another slowdown in US inflation fuelled bets the Federal Reserve will take a softer approach to its monetary tightening campaign.

The reading added to the positive energy flowing through trading floors at the start of the year as investors put a painful 2022 behind them and focus on a recovery in the global economy, helped greatly by China's reopening.

All three main indexes on Wall Street extended gains after the much-anticipated consumer price index came in at its lowest level since October 2021 as months of Fed interest rates begin to kick in.

The report also showed the first month-on-month dip in the CPI for about two years.

The news boosted bets on the central bank lifting rates just 25 basis points next month, easing worries about a possible recession in the world's top economy.

Policymakers have been hiking borrowing costs since March, including four bumper 75-point increases, as they struggled to get a grip on inflation as it hit four-decade highs.

In early trade, most Asian markets tracked the New York rally. Shanghai, Sydney, Seoul, Singapore, Taipei, Wellington, Manila and Jakarta were all in the green.

Hong Kong rose marginally but was weighed by a sluggish performance in tech firms after a report said the Chinese government was considering taking "golden shares" in giants Alibaba and Tencent, giving it a tighter grip on the sector.

Tokyo dropped more than one percent as an increasingly stronger yen took its toll on exporters.

The dollar was unable to bounce back from hefty losses suffered in the wake of the inflation figures, with the Japanese unit at its strongest level since June, while the euro is at an eight-month high.

'Inflation remains stubborn' 

However, while there are hopes that inflation has peaked, the head of the International Monetary Fund warned that the full impact of monetary tightening had yet to be felt and central banks still had more work to do.

Kristalina Georgieva said sectors such as housing were beginning to hurt in the United States, the jobs market remained strong with low unemployment.

"As long as people are employed, even if prices are high, consumers spend.... But we all know that the impact of tightening financial conditions is yet to bite, in terms of unemployment," she said in a briefing on the world economy.

"Inflation remains stubborn, and in that sense, the job of central banks is not yet done."

And analysts warned there were still plenty of bumps in the road ahead, with concern now turning to the effect of higher rates on corporate earnings.

"The Fed will go down this path of tightening, no pivots of any kind. Maybe a pause at best," Adam Coons at Winthrop Capital Management told Bloomberg Television.

"It could mean a lot of pressure for equity markets" when an earnings recession is also likely in the first half of the year.

Oil prices dipped but were well on course for a weekly gain thanks to rising demand expectations as China emerges from zero-Covid and the US inflation figures soothe concerns about interest rate rises.

-AFP

12 January 16:38

Afrocentric shareholders approve takeover offer from Sanlam

Shareholders of black-owned JSE-listed investment group AfroCentric, which owns medical aid administrator Medscheme, have approved an offer from Sanlam that will see the financial services group take a controlling stake.

In a meeting on Thursday 100% of shareholders voted in favour of the partial share offer, and 99.99% voted in favour of an asset for shares transaction.

The scheme consideration will Sanlam acquire no more than 64.45% of Afrocentric, and no less than 55%.

AfroCentric, which is valued at R3 billion on the JSE, announced in October that Sanlam had made a R6 per share offer, a 43% premium to its shares prior to the offer. Sanlam will be able to integrate Afrocentric’s product offering into its ecosystem, while AfroCentric will gain increased access to the wide Sanlam distribution network, the parties said at the time.

As part of the transaction, Sanlam proposes that its stake of almost 29% in ACT Healthcare Assets (AHA) be transferred to AfroCentric in exchange for an equal stake in AfroCentric. AHA is the holding company of AfroCentric’s assets, including Pharmacy Direct, the country’s biggest pharmacy courier and Medscheme, the second-largest medical aid administrator after Discovery.

12 January 16:05

Rand gains as US inflation cools, giving Fed room to downshift on rates

US inflation continued to slow in December, adding to evidence price pressures have peaked and offering the Federal Reserve room to slow the pace of interest-rate hikes next month.

Excluding food and energy, the consumer price index rose 0.3% last month and was up 5.7% from a year earlier, according to a Labor Department report Thursday.

In afternoon trade, the rand was 1.3% firmer at R16.70 to the dollar, strengthening after the release of the data.

Economists see the gauge — known as the core CPI — as a better indicator of underlying inflation than the headline measure.

The overall CPI fell 0.1% from the prior month, with cheaper energy costs fueling the first decline in two and a half years.

The measure was up 6.5% from a year earlier.

US stock futures dropped before paring losses and Treasuries fluctuated. All of the figures matched the median estimates in a Bloomberg survey of economists.

The data, when paired with prior months’ lower-than-expected readings, point to more consistent signs that inflation is easing and may pave the way for the Fed to downshift to a quarter-point hike at their next meeting.

That said, the central bank’s work is far from over.

Resilient consumer demand, particularly for services, paired with a tight labor market threaten to keep upward pressure on prices.

The Fed is expected to raise interest rates further before pausing to assess how the most aggressive tightening cycle in decades is impacting the economy.

Policymakers have emphasized the need to hold rates at an elevated level for quite some time and cautioned against underestimating their will to do so. Investors are still betting the central bank will cut rates by year end, despite officials saying otherwise.

- Bloomberg, with additions by News24

12 January 07:03

Asian markets rise on optimism ahead of US inflation data

Asian markets rose Thursday as traders grew confident ahead of data later in the day that is expected to show another softening of US inflation, giving the Federal Reserve room to slow its pace of interest rate hikes.

Wall Street's three main indexes provided a strong lead, with the S&P 500 and Nasdaq soaring more than one percent each thanks to a rush back into beaten-down tech firms.

With optimism over China's reopening already fuelling a rally across Asia, signs that the Fed's long-running monetary tightening campaign is finally paying off has provided investors with more reason to be happy.

The consumer price index reading on Thursday is the key event for investors this week, though analysts warned that an above-forecast reading would deal a hefty blow to confidence on trading floors.

"An in-line or softer-than-expected CPI will likely result in a rally, whereas a hotter number could easily tip over the applecart," said Arthur Hogan at B. Riley Wealth.

"Good news for the economy can become good news for markets."

In early trade, Hong Kong again led the gains by rising more than one percent while Shanghai, Sydney, Seoul, Wellington, Taipei, Manila and Jakarta also rallied. Tokyo was flat.

Gains were also helped by comments from Fed official Susan Collins backing a quarter-point rate hike at the bank's next policy decision on February 1.

Collins, who is head of the Boston Fed, told The New York Times that slowing the pace of increases would give policymakers a chance to see how their efforts to rein in decades-high inflation were working.

Investors are also keeping tabs on developments in China as it emerges from years of strict zero-Covid containment measures.

While the long-term outlook remains positive, soaring infections across the country are leading to worries about the effect on economic activity.

However, SPI Asset Management's Stephen Innes said: "Recent surveys suggest that the first wave has already peaked in China. And though spot economics remain poor, the market has discounted the near-term headwinds as hope springs eternal once the winter Covid waves pass."

Building expectations for Chinese demand and a healthy 2023 continue to put upward pressure on oil prices, which jumped around three percent Wednesday, with traders ignoring data showing a massive pick-up in US inventories.

"Energy traders should get used to seeing oil prices head higher," said OANDA's Edward Moya.

"Oil demand is coming back and expectations are high that China's demand is about to skyrocket."

Several crude experts have tipped the commodity to top $100 a barrel this year, with top hedge fund manager Pierre Andurand warning last week that it could pass $140.

 - AFP

11 January 11:10

Tharisa takes weather hit, but maintains guidance

Chrome and platinum group metals (PGMs) miner Tharisa says unprecedented rainfall at its key Tharisa mine hit production volumes in its first quarter to end-December, but prices remain strong, and it's maintaining its full-year guidance.

Total reef mined fell about 17.7% to 1.08 million tonnes from the prior three months, Tharisa said in a production update, and while changes were made to the pit layout to ensure better drainage, higher water levels still hit production.

The firm said its stockpile management strategy implemented over the past 24 months resulted in minimising the impact to its normal output.

“Despite operational headwinds at the Tharisa Mine, the company delivered a solid quarter of PGM and chrome production, underpinning our commitment in delivering guidance of between 175,000 oz and 185,000 PGM and 1.75Mt and 1.85 Mt chrome concentrates,” Phoevos Pouroulis said in the statement.

Chrome prices remain strong, the group said, with stockpiles in China at the lower end of seasonal levels despite lower ferrochrome production in the latter part of the quarter.

Demand for chrome remains resilient and shipments are being executed as rapidly as possible given transport logistics constraints in SA, the firm said.

Chinese New Year will slow demand towards the end of January 2023 but with the economy in China opening post Covid-19 restrictions, the group said it expects to see strong demand for the product heading into the Northern Hemisphere spring. 

PGM prices remained elevated over the quarter and are set to continue at these levels on the back of demand from the automotive industry and lower production from the major suppliers.

Tharisa’s shares were down almost 1% in morning trade on Wednesday, valuing the miner at about R6.2 billion on the JSE.

11 January 06:48

Asian markets rise again on recovery hope as inflation data looms

Asian equities pushed higher Wednesday as investors were buoyed by China's reopening and optimism that key data due this week will signal a further slowdown in US inflation.

Traders tracked a Wall Street advance as they brushed off fresh warnings that Federal Reserve rates would continue to rise and a World Bank decision to slash its global growth forecast.

After a stumble Tuesday, regional markets resumed the upward push that has characterised the start of the year thanks to China's emergence from nearly three years of zero-Covid isolation.

The reopening, easing of Beijing's tech crackdown and moves to help the property sector have raised hopes for the world's number-two economy, a crucial driver of world growth.

SPI Asset Management's Stephen Innes said: "Despite a solid start to the year, there should be a lot more upside to China's stocks, with earnings upgrades to drive further outperformance."

"Although we are not pitching a tent in that camp just yet, many investors are starting to believe China's reopening could be faster than expected on pent-up demand, a robust economic rebound and fewer supply constraints."

In early trade, Hong Kong again led the gains by piling on more than one percent, having already added about eight percent in 2023. Shanghai, Tokyo, Sydney, Seoul and Singapore were also in the ascendancy, though there were small losses in Wellington, Taipei and Manila.

Focus this week is on Thursday's US consumer price index, which is expected to show that price gains eased further in December.

But while that could possibly allow the Federal Reserve to take a lighter approach to its monetary tightening campaign, policymakers continue to push back against any pivot away from rate hikes.

Markets were battered last year by fears that almost a year of hikes will tip the economy into recession.

Bank boss Jerome Powell said that "restoring price stability when inflation is high can require measures that are not popular in the short term as we raise interest rates to slow the economy".

Meanwhile, Fed governor Michelle Bowman said that while inflation was coming down, "we have a lot more work to do" and that once rates had peaked they would have to stay there for some time.

She added that "unemployment has remained low as we have tightened monetary policy and made progress in lowering inflation".

"I take this as a hopeful sign that we can succeed in lowering inflation without a significant economic downturn," she said.

And JP Morgan Chase CEO Jamie Dimon said borrowing costs could actually go higher than the five percent priced in by markets, suggesting they could hit six percent.

There was little reaction to the World Bank slashing its 2023 global growth forecast by about half and a warning that the economy was "perilously close" to recession owing to high inflation, rising interest rates and Russia's invasion of Ukraine.

Economists have warned of a slump in the world economy as countries battle soaring costs and central banks simultaneously hike interest rates to cool demand amid ongoing disruptions from the war in Ukraine.

The World Bank's latest forecast points to a "sharp, long-lasting slowdown", with growth pegged at 1.7 percent this year, roughly half the pace it predicted in June, according to its Global Economic Prospects report.

11 January 06:45

Financial Services Tribunal overturns R2.5m fine against deVere CEO Nigel Green

The Financial Sector Tribunal has overturned a decision to levy a R2.5 million fine against founder and CEO of deVere Nigel Green related to the marketing of unapproved foreign collective investment schemes. 

It has also set aside his five-year disbarment as a director, though this matter has been referred back to the regulator.

Read more

11 January 06:45

Iqbal Survé-linked AYO Technology starts retrenchment talks as it looks to cut costs

Iqbal Survé-linked AYO Technology said on Tuesday it had initiated a Section 189 process, or retrenchment talks, as it looks to cut costs and meet a strategic goal of becoming an investment holding company.

The firm had warned of possible job losses in April 2021 when it announced a series of plans to respond to the closure of its banking facilities, including transitioning to an investment holding company, which will help reduce costs.

Read more

11 January 06:44

JSE fines Markus Jooste R15m and bars him for 20 years

The JSE has levied two R7.5 million fines against former Steinhoff CEO Markus Jooste as well as barring him from serving as a director for two decades, due to failures at the helm that prompted SA's biggest-ever accounting scandal.

Jooste has informed the JSE he does not agree with the decision and has challenged it, the JSE said in a statement, with the Financial Services Tribunal on Tuesday dismissing the suspension application, other than with regards to the fines.

Read more

11 January 06:43

EXCLUSIVE | Optimum curator to step down over death threats

The court-appointed curator for Optimum Coal has signalled his intention to resign after receiving death threats directed at both himself and his family.

In an email sent to Optimum's Business Rescue Practitioners on 23 December, which News24 has seen, Peter van den Steen said: "After receiving the death threats directly, firstly at me only and then a few days later including my family, I have decided that I will be removing myself as Curator Bonis in January."

Read more

23 Dec 2022

Advanced Health inks deal to sell Australian subsidiary for R522m

Day hospital operator Advanced Health has agreed to sell its stake in Australian subsidiary PresMed for R522 million to asset manager Intermediate Capital Group, intending to initially use the proceeds to restructure its balance sheet and for working capital.

The firm, which is valued at about R130 million on the JSE, had net debt of R91.5 million at the end of June, with its six hospitals in Australia accounting for more than two thirds of its revenue. The group also has nine hospitals in SA.

PresMed Australia is a private day hospital group founded in 1997 and since 2014 majority owned by Advanced Health, who holds 56.44%, with the rest of the company owned by the long-standing Australian management team directors, and a consortium of specialist doctors.

The transaction, which has the support of the Advanced Health board, is an attractive opportunity to realise the entire investment in PresMed for cash, in order to procure the funding required to support the South African operations, the group said. It still requires shareholder and other approvals.

Advanced Health's shares were unchanged at 26c on Friday, and have fallen by more than a third so far in 2022.

23 Dec 2022

Tongaat Hulett puts subsidiaries into business rescue

Sugar producer Tongaat Hulett, which started business rescue proceedings in late October, says it has also instituted proceedings for its SA sugar subsidiary and animal feeds business Voermol due to their reliance on the group.

The boards of Tongaat Hulett Sugar SA and Voermol had determined they are facing circumstances of "financial distress," the group said in a statement. They are wholly owned subsidiaries of Tongaat Hulett, which have historically relied on Tongaat Hulett for financial and operational support. 

Both boards further resolved to appoint the current Tongaat Hulett business rescue practitioners, being Trevor John Murgatroyd, Petrus Francois van den Steen and Gerhard Conrad Albertyn of Metis Strategic Advisors, as the business rescue practitioners, and requisite documents were lodged with authorities on Thursday.

Tongaat's business rescue practitioners said in a statement the move did not mean the business rescue process is struggling. 

Tongaat Hulett's business rescue plan is expected to be published by the end of January, and its financial distress has put thousands of livelihoods at risk, given the firm accounts for about half of SA's refined sugar.

Sugar SA contributed about 40% of the group's R8.5 billion in revenue in its six months to end-September 2021, while animal feeds and molasses accounted for about 10%.

23 Dec 2022

US stocks snap two days of gains, dollar rises

US stocks dropped on Thursday as investors digested data validating the Federal Reserve’s assertion that the economy is robust enough to withstand more tightening.

Technology stocks were battered after a gloomy outlook from chipmaker Micron Technology Inc. weighed on sentiment. The S&P 500 closed the session down 1.5%, after falling as much as 3% during trading hours.

The tech-heavy Nasdaq 100 declined as much as 4%, but pared its drop to end Thursday down 2.5%.

The dollar gained the most in a week. The policy-sensitive, two-year Treasury yield climbed to around 4.27%. Oil snapped a three-day rally.

Data released on Thursday painted a picture of a resilient economy, stoking concern that the Fed has a longer way to go to subdue inflation. Initial jobless claims rose less than forecast in the week ended 17 December, underscoring the strength in the labor market.

Third-quarter gross domestic product was revised to 3.2% — compared with a previously reported 2.9% advance — on firmer spending. 

“Today’s data is telling us that the consumer has a lot more strength than I think what the market was pricing in,” Priya Misra, head of global rates strategy at TD Securities, said on Bloomberg Television.

“When the accumulated savings they’ve had since Covid, when that runs out, which we think happens by the middle of next year, that’s when consumer spending slows down.”US inflation is going to be “sticky” on the way down because the labor market has remained resilient so far, Misra said.

That’s going to keep the Fed firmly on its path of rate hikes, she said. 

“So we actually think that the Fed is going to be hiking all the way up until May to reach 5.5%, and then be very reluctant to ease policy,” she said.

“I mean, we have a recession in our base case, but we think the Fed is going to be very late in terms of when they can start to ease because of that sticky inflation.”Bearish comments from investor David Tepper, who told CNBC he’s “leaning short” on US equities next year because of global tightening, added to the risk-off sentiment on Thursday.

The S&P 500’s large decline this month contrasts with an average 1.5% December gain since 1950, providing sidelined global investors with plenty of “dry powder” to put to work, according to analysts at SEB.

Meanwhile, technology stocks are headed for their worst December since the bursting of the dotcom bubble 20 years ago.

Concerns are also growing that Japanese investors could be persuaded to bring home some of the trillions of dollars they have stashed in foreign stocks and bonds as the yen and local bond yields rise in the wake of this week’s sudden hawkish move from the Bank of Japan.

That could further lift global borrowing costs and drag on already cooling economic growth, with euro zone bonds seen as especially vulnerable.

- Bloomberg

22 Dec 2022

Stocks extend advance into Asia, dollar weakens

Stocks rallied in Asia Thursday, putting a gauge of the region’s equities on course to snap five days of declines after US shares climbed on improved consumer confidence and better-than-expected earnings.

The biggest moves were in Hong Kong, where the benchmark index rose more than 2%. Technology and property companies led the charge after a slew of comments from regulators on supporting the broader economy and real estate developers.

Shares also jumped in Japan, South Korea and Australia. US and European futures were higher following a surge of 1.5% in both the S&P 500 and the Nasdaq 100 on Wednesday.

Treasuries rose slightly in Asia after a mixed US session as the immediate fallout from the Bank of Japan’s surprise policy shift began to ebb. 

The 10-year Japanese government bond yield targeted by the BOJ fell to 0.4%, compared with the central bank’s new upper limit of 0.5%. Government bond yields were up in Australia and down in New Zealand. The yen resumed its advance after a small loss Wednesday. It rallied the most since 1998 on Tuesday. The dollar fell versus its Group-of-10 counterparts.

FedEx Corp. and Nike Inc.’s earnings exceeding Wall Street’s estimates provided a reprieve for US stocks that had been pummeled since the Federal Reserve’s hawkish turn last week.

Appetite for risk taking was also supported by US consumer confidence rising by more than forecast to the highest since April as inflation eased.

Bolstering the tone in Asia, China’s central bank said it would guide financial institutions to support mergers and acquisitions in the nation’s property sector, and help defuse risks and improve financial conditions of top-tier developers.

“The Hong Kong and China market may do a bit better,” said Redmond Wong, strategist at Saxo Capital Markets, noting that a lot profit-taking was now out of the way and there has been some subsiding of fear over Covid.

Still, the market remains wary given a surge of infections in Shanghai and concerns in Beijing earlier in the week amid reports of crematoriums being overwhelmed with bodies.

Meanwhile, as the dust starts to settle after the BOJ’s surprise move on Tuesday, wagers are in motion that the central bank will join its peers next year in raising interest rates.

 Surging global yields have now shrunk the worldwide stock of negative-yielding debt to about $821 billion, from a $18.4 trillion peak reached two years ago.

 Elsewhere, oil price gains extended into a fourth day after data showed a decline in US inventories and traders tracked the fallout from Group of Seven sanctions targeting Russia’s crude exports and revenues. Gold inched higher as investors digested an improvement in consumer confidence while awaiting further US data. 

- Bloomberg

21 Dec 2022

De Beers reports fall in diamond sales for 10th cycle, as it expected

Anglo American-controlled precious stones miner De Beers said on Wednesday rough diamond sales in its 10th cycle of 2022 fell by double digits, although this was expected.

Rough diamond sales fell 9.7% to a provisional $410 million (R7.09 billion) in the 10th cycle from the 9th, but was up from $336 million in the same cycle of 2021. The miner holds 10 sales cycles per year, with the provisional figure bringing its total for 2022 to about $5.67 billion, from $4.82 billion in 2021.

'Demand for our rough diamonds over the final sales cycle of 2022 was in line with expectations, ahead of the normal seasonal closure of polishing factories in southern Africa over the Christmas period and with sight holders taking a prudent approach ahead of restocking after Christmas and the expected re-opening of the China market," De Beers CEO Bruce Cleaver said.

21 Dec 2022

Europe stock futures rise in sign of risk appetite

European and US stock futures advanced after the S&P 500 closed higher for the first time in four sessions, providing a moment of respite in one of the worst years for stocks and bonds in more than a decade.

The picture in Asia was mixed with Japanese stocks falling, Australian shares rallying and Chinese benchmarks oscillating between gains and losses.The yen trimmed a fraction of its gains after the biggest one-day jump since 1998 on Tuesday, when it climbed almost 4% against the dollar on a surprise policy adjustment from the Bank of Japan.

The impact of the BOJ’s surprise decision to let yields on 10-year government bonds trade up to 0.5%, from a previous ceiling of 0.25%, continues to reverberate.

Ten-year Treasury yields rose slightly in Asia after jumping 10 basis points for the second consecutive session on Tuesday. The BOJ announced a bond buying operation Wednesday as the yield on 10-year debt approached the new upper limit, while the nation’s two-year yields rose above zero for the first time since 2015. 

Traders are on guard for the prospect of Japanese institutions repatriating money held in overseas stocks and bonds. Japanese investors have more than $3 trillion in foreign equities and debt with roughly half in the US, according to data compiled by Bloomberg. 

“Tighter BOJ policy would remove one of the last global anchors that’s helped to keep borrowing costs at low levels more broadly,” Deutsche Bank AG analysts told clients, noting the change has come as markets were “already reeling” from the Fed and ECB meetings last week.

Many economists now expect the BOJ to raise interest rates next year, joining the Fed, the ECB and others after a decade of extraordinary stimulus. 

The BOJ is at the start of a shift toward normalizing its monetary policy, said Amy Xie Patrick, head of fixed income strategy for Pendal Group Ltd.

“This is a course of action they have to follow through on to send the message to currency speculators out there that the yen funding trade isn’t a one-way bet,” she said in an interview with Bloomberg Television.

Meanwhile, fresh data indicating a cool down in the US housing market in a year that’s been marked by quickly rising interest rates that have weighed on stocks and bonds.

Global equities have fallen by a fifth in 2022, on pace for their worst year since 2008. A Bloomberg index of global bonds has tumbled by 16%, by far the largest decline on an annual basis since the benchmark began in 1990.

Elsewhere in markets, oil held a two-day gain as a report showing a drop in US stockpiles and threats to supply countered concerns about a slowdown.

Iron ore rose - extending Tuesday’s climb - as China’s Covid Zero reversal and a steady stream of supportive policies improved prospects for a recovery in the housing sector.

- Bloomberg

20 Dec 2022

Gemfields begins R173m share buyback after sparkling year for auctions

Ruby and emerald miner Gemfields, which also owns Fabergé, says it is initiating a $10 million (R173 million) share buyback programme as it looks to return surplus cash to shareholders after a record year for auction revenue.

The buyback programme equates to about 3.8% of Gemfields R4.48 billion market value on the JSE, with the miner appointing Investec to conduct it.

Gemfields is the operator rand 75% owner of both the Kagem emerald mine in Zambia, believed to be the world’s single largest producing emerald mine, and the Montepuez ruby mine (MRM) in Mozambique.

The firm has reported "remarkable" demand for precious stones in 2022, with its auctions setting new records, including the sale of the massive 187 700 carat Kafubu emerald cluster in November.

Earlier in December, the firm said with its latest ruby auction bringing in $66.8 million, MRM’s total auction revenue for 2022 stood at $166.7 million, a 13% improvement on last year’s record despite the challenging conditions in Cabo Delgado, which has faced disruptions amid an Islamic insurgency in the north of the country.

When combined with the Kagem emerald mine’s auction revenues for 2022 of $149.4 million- a 62% improvement over 2021 - Gemfields’ total auction revenues for 2022 stand at $316 million, an improvement of 32% from 2021's record result.

20 Dec 2022

Asian shares slide after surprise Bank of Japan policy shift

The yen surged and Asian shares fell sharply on Tuesday after Japan's central bank unexpectedly tweaked its bond yield controls - a move that will allow long-term interest rates to rise more.

While the Bank of Japan kept broad policy settings unchanged it widened the allowable band for long-term yields to 50 basis points either side of that, from 25 basis points previously.

That triggered an immediate spike in the yen with the greenback dropping 2.71% after the decision to 133.16, a four-month low.

In turn, the Nikkei benchmark index slumped 2.71% after trading in positive territory earlier in the day.MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.6%.

The BOJ decision was taken as a signal that the forces which drove the yen to three-decade lows this year may be beginning to turn.

"The move came earlier than I had expected but a step towards the normalisation process of policy in Japan," Kerry Craig, JP Morgan Asset Management's global markets strategist, told Reuters.

"The market implications are most prevalent in the forex markets given the divergence between U.S. and Japanese policy settings."

"While there is still a wide gap, the hint that the BOJ is moving incrementally away from ultraloose policy should be yen positive in the near term."

Elsewhere in Asia, Australian shares extended earlier losses to be off by 1.54% in afternoon trade.

Hong Kong's Hang Seng Index was down 1.9% while China's CSI300 Index was off 1.62%.

In early European futures trading, the pan-region Euro Stoxx 50 futures were down 1.23% at 3,772, German DAX futures were down 1.32% at 13,832 and FTSE futures were down 0.83% at 7,306.5.U.S. stock futures, the S&P 500 e-minis, were down 0.85% at 3,812.8.

In Asian trading, the yield on benchmark 10-year Treasury notes rose to 3.6825% compared with its U.S. close of 3.583% on Monday.

The two-year yield, which rises with traders' expectations of higher Fed fund rates, was at 4.2848% compared to the US close of 4.262%.

China's reopening to the rest of the world from nearly three years of Covid lockdowns continued to be a major concern for investors.

Credit Suisse on Monday upgraded its outlook from neutral to outperform for China's equities markets in the year ahead.

"The whole narrative of China has changed, it's gone from Covid zero that was putting the economy under pressure and there's now an intention to move towards a reopening," said Suresh Tantia, Credit Suisse's senior investment strategist.

"And as that happens, we will see a recovery in China's economy and markets."

US crude ticked up 0.41% to $75.5 a barrel. Brent crude rose to $79.87 per barrel. Spot gold was slightly higher at $1,790.83 per ounce.

- Reuters

19 Dec 2022

Bell Equipment jumps after flagging profit rise

Shares of Bell Equipment, which makes and sells heavy machinery such as dump trucks and forklifts, lifted more than 8% on Monday, after it said strong market conditions are expected to help lift profits by more than a third in its its year to end-December.

The firm said in a brief trading update it expects to report headline earnings per share to rise at least 40% from the prior period's 294c. 

The expected increase in earnings is mainly due to stronger market conditions which has had a positive impact on production and sales performance, said the group, which expects to release its results on 30 March.

In midday trade the firm's shares were up 8.62% to R15.75, having risen almost 30% in the year to date.

At its half-year, Bell had reported its profit rose almost a fifth to R210.33 million to end-June, benefitting from better-than-expected demand from the mining industry, but also robust demand generally as many governments embark on infrastructure drives to offset the effects of Covid-19 and provide economic stimulus.

Valued at about R1.4 billion on the JSE, Bell generates more than 60% of its revenue in SA, with most of the rest coming from Europe.

19 Dec 2022

KAP Industrial reports satisfactory, but mixed, performance

Diversified JSE-listed KAP Industrial says its performance during the four months to end-November was satisfactory, with the recovery of its mattress business Restonic and logistics business Unitrans taking longer than expected, although an expected deterioration of margins at Safripol has been better than 

The firm, valued at R10.6 billion on the JSE, said in an update on Monday that its Restonic business had a challenging start to the period due to subdued demand from retailers and continued operating profit margin pressure. Demand improved from September 2022, following increased marketing activities by the division and higher demand from retailers ahead of the peak trading season and Black Friday promotions, it said.

Automotive components business Feltex showed an improved performance for the period, supported by higher new vehicle assembly volumes and light commercial vehicle sales, the group said, but polymer producer Safripol saw a decline in raw materials volumes, as expected, but volumes also took a hit due to the failure of a major component, which resulted in a plant shutdown of over a month. The division, was, however able to maintain supply from inventory to all domestic customers.

Unitrans had a stable performance compared to the prior period in spite of the loss of a major food contract, the group said. The anticipated strong recovery in the Rest-of-Africa division’s performance did not materialise as expected due primarily to the South African government’s moratorium on diesel exports to neighbouring countries and abnormal weather conditions affecting its agriculture operations.

The group said it was continuing its business resilience strategy, due to escalating political uncertainty and failure of state infrastructure and services, and had completed construction of a 10MW photovoltaic plant at its Safripol Sasolburg site in November, while it has also approved another 4MW plant.

"As part of its resilience strategy, the company has initiated an energy strategy aimed at reducing electricity consumption, mitigating cost escalations, supply interruptions and non-supply through self-generation, co-generation and storage," KAP said.

"While the group has not yet been materially affected by load-shedding, material secondary effects are starting to emerge, including but not limited to the additional wear-and-tear on equipment due to electricity instability and unscheduled stoppages following power infrastructure failures."

KAP's shares were down 0.47% to R4.25, having risen almost 2% so far in 2022.

19 Dec 2022

Asian stocks fall amid Fed jitters

Asian stocks retreated as the Federal Reserve’s resolve to keep raising rates reduced the appetite for riskier assets.

The yen stabilized after speculation that a shift is on the horizon for Japan’s monetary regime fueled early gains.

Shares dropped across the region, while US equity futures ticked higher after the S&P 500 and the tech-heavy Nasdaq 100 closed lower for a third day on Friday. 

The yen was little changed around 136 per dollar and remained on course for a second daily gain, while the yield on Japan’s benchmark five-year note touched the highest level in more than seven years.

The moves were supported by a report that the Japanese prime minister may consider allowing more flexibility in the monetary framework.

A top government spokesman denied the report.If such flexibility does translate into an exit from Japan’s yield-curve control policy or if it suggests a higher target for the 10-year government bond yield, “the markets will absolutely interpret that as bullish yen.

In fact, they already are in advance of that,” Sue Trinh, head of macro strategy at Manulife Investment Management, said on Bloomberg Television. At the same time, the dollar fell versus its major counterparts as investors cut long bets in the greenback while weighing the Fed’s outlook on rates.

Yields on US Treasuries edged higher, with the policy-sensitive two-year Treasury hovering close to 4.2%. Government bond yields rose in Australia and fell in New Zealand.

The risk of higher interest rates pushing the US into recession in 2023 is casting a pall over trading that’s winding down into year end.

Investors had cheered softer-than-expected US inflation data last week but that euphoria faded as Fed officials hammered home the message that rates would go higher for longer until they’re confident inflation has been subdued.

A wave of rate hikes and hawkish outlooks from central banks across the globe, including the European Central Bank, have further bruised sentiment. Meanwhile, traders are keeping an eye on a surge of Covid infections in China and a pledge by China’s top leaders to focus on boosting the economy next year, hinting at business-friendly policies, further support for the property market while likely scaling back fiscal stimulus.

“We’re done for the end of the year in terms of waiting for an amazing rally,” Sylvia Jablonski, chief investment officer at Defiance ETFs, said on Bloomberg Radio.

However, “the market will look through the expectations of a future recession at some point and come back in because equities are starting to look cheaper and cheaper as we go along here.”

In commodities, oil climbed on China’s pledge to revive consumption and move by the US to refill its strategic crude reserves. Gold was little changed.

- Bloomberg

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