30 November 15:53
Ayo loss widens a little, but it holds dividend steady
Technology group Ayo Technology Solutions has kept its total dividend for its year to end-August steady at 95c, with the firm managing to grow revenue a little, though its after-tax loss widened.
Ayo, which is linked to businessman Dr Iqbal Survé, who founded African Equity Empowerment Investments (AEEI), said on Wednesday its after-tax loss widened about 3% to R266 million to end-August, but revenue grew 3% to R1.8 billion.
The firm doubled its final dividend to 60c, though its total dividend is unchanged from the prior year. The total dividend for 2022 amounted to a R326 million payout.
The firm, valued at R1 billion on the JSE, has interests including software and consulting, as well as ICT services for the healthcare sector. It said tough economic conditions and negative publicity regarding its bank accounts weighed on its performance, although revenue in its communications business doubled, partly due to increased demand for audio and television equipment.
The group said its challenges with its bank accounts had led to non-renewal of contracts, but in September, the Competition Tribunal had granted an order on an interim basis to restore the accounts, with FNB restoring Ayo's account, and Nedbank accounts for its subsidiaries. The order is for a period of six months from 16 September 2022 or the conclusion of an investigation into the conduct of the respondents by the Competition Commission.
Ayo's shares were unchanged at R3.02 on Wednesday, having fallen almost 14% so far in 2022.
30 November 06:46
Equities mostly up as traders weigh China moves, await Fed's Powell
Markets mostly rose Wednesday on hopes that China will further ease its strict Covid containment measures following widespread political unrest, though gains were tempered by leaders' warnings of a crackdown on dissent across the country.
Traders were also nervously awaiting a key policy speech by Federal Reserve chief Jerome Powell later in the day that could outline the bank's strategy for tackling inflation in light of a recent slowdown in price gains.
A spectacular rally in Hong Kong on Tuesday led gains across Asia as investors looked past weekend demonstrations in China after officials announced moves aimed at softening their zero-Covid strategy.
Leaders said they would step up their drive to vaccinate the elderly, while the National Health Commission appeared to blame local governments for instituting extreme measures such as tight lockdowns, one of the main reasons for the unrest.
However, in a sign that the leadership was determined to maintain its authority, the country's top security body called for a "crackdown" against "hostile forces".
The warning came after security services were sent out in force to prevent further demonstrations, the likes of which had not been seen in decades.
The developments saw Hong Kong stocks swing between gains and losses in the morning, having soared more than five percent Tuesday, while Shanghai fluctuated.
Data showing China's factory activity shrank further in November highlighted Covid-zero's impact on the country's economy.
"Due to a more reflective approach to the recent zero-Covid measures, Chinese stocks have taken substantial leaps and bounds this week," said SPI Asset Management's Stephen Innes.
"Still, the global investment community is keeping close tabs on China... Any antagonistic escalation risks a walk back of current positive momentum, especially with folks playing the trade-off thinking that a calming in protests might hasten a shift away from zero-Covid policies."
There were also gains in most other Asian markets, with Sydney, Seoul, Wellington, Taipei and Jakarta in the green, though Tokyo dipped.
Focus is also on Fed boss Powell's speech later Wednesday on the labour market, with many expecting him to outline the bank's plans for future interest rate hikes.
After lifting borrowing costs 75 basis points for the past four meetings, officials are widely seen as taking their foot off the gas when they gather next month following a recent batch of weak data including a below-forecast inflation print for October
But a string of policymakers has lined up in recent weeks to ram home their intention to keep lifting until they are satisfied inflation has been slayed, with warnings there will not likely be any cuts until 2024.
The sharp lift in rates this year has fanned bets that the world's top economy will tip into recession.
"The Fed has hiked enough -- and quickly enough -- to make recession a base-case scenario in our book," Lauren Goodwin, at New York Life Investments, said.
"Volatility and risk premia are likely to remain elevated as long as the Fed is fighting inflation in a growth slowdown."
The remarks by Powell come just before the Friday release of US jobs data for November, which will provide the latest snapshot of the economy.
29 November 19:16
Stocks, oil rise on hope China will ease strict Covid measures
Stocks and oil prices rebounded strongly Tuesday, while the haven dollar weakened, on speculation that China would further ease strict Covid measures but investors remain cautious ahead of key US data and speeches later in the week.
On Tuesday evening, the rand was trading at R17.01/$.
Sentiment was boosted also after China avoided another night of protests, following a weekend of unrest sparked by the tough anti-Covid policy that is weighing on growth in the world's second biggest economy.
Stock market gains were led by big rallies in Hong Kong and Shanghai, with property firms enjoying a much-needed surge, also on moves to ease funding restrictions on troubled developers.
Europe's main stock markets were mainly higher in late afternoon trading.
The JSE's All Share index was down a third of a percent, with DRDGold, FirstRand, and Mr Price all losing 3%.
But sentiment was tempered by warnings from top Federal Reserve policymakers that US interest rates would climb further and could go higher than initially thought to fight decades-high inflation.
US stocks edged lower early Tuesday ahead of key releases on consumer health before the festive shopping season kicks off.
"Risk-on sentiment has lifted European equities, boosted by a rally overnight in China," noted Victoria Scholar, head of investment at Interactive Investor.
Oil prices rebounded from 11-month lows, "boosted by improved sentiment towards demand from China", she added.
Qatar announced Tuesday its first major deal to send liquefied natural gas to Germany as Europe scrambles to find alternatives to Russian energy sources.
Qatar's Energy Minister Saad Sherida al-Kaabi said up to two million tons of gas a year would be sent for at least 15 years from 2026, and that state-run QatarEnergy was discussing other possible deals for Europe's biggest economy.
German inflation also unexpectedly slowed in November to 10 percent from a record high of 10.4 percent in October, preliminary data showed Tuesday.
Economists however cautioned against assuming inflation was now on a downhill path as households will likely face higher energy costs from January.
Market focus was meanwhile turning to the United States, with a number of Fed officials due to speak, including boss Jerome Powell.
Noting that there has not been "any carryover momentum from the Chinese markets" on Wall Street Tuesday, Patrick J. O'Hare of Briefing.com said it "suggests to us that market participants are more attuned for the time being to happenings closer to home" including Powell's speech Wednesday.
"Sure, the latest developments have helped temper some of yesterday's selling activity, but they have not ignited buying efforts," he added.
Friday sees the release of key US jobs data, which could provide an idea about the central bank's plans for monetary policy.
Bets on a slowdown in its pace of rate hikes have boosted markets for the past weeks, but some high-ranking members on Monday looked to play down the chances of a more dovish pivot.
29 November 07:40
Asian markets mostly rise after calm night in China
Asian equities rose and the dollar weakened Tuesday as China avoided another night of protests after a weekend of unrest across the country fuelled uncertainty in the world's number two economy.
The gains were led by a rally in Hong Kong and Shanghai, with property firms enjoying a much-needed surge on the back of moves to ease funding restrictions on troubled developers.
However, sentiment was tempered by warnings from top Federal Reserve policymakers that US interest rates would rise further and could go higher than initially thought to fight inflation.
The remarks were partly to blame for big losses of more than one percent in Wall Street's three main indexes.
China was rocked by demonstrations at the weekend calling for more political freedoms and an end to the country's long-running and economically painful zero-Covid strategy that has seen millions thrown into lockdown for months.
Several arrests were made and security forces were out in force Monday to prevent a repeat of the protests, which were the most widespread since pro-democracy demonstrations were crushed in 1989.
The return of some calm helped Hong Kong stocks rally more than three percent and Shanghai more than one percent, with some commentators suggesting the unrest could actually help push leaders to ease some of the strict containment measures.
Property firms were among the best performers after China said it would end a ban on firms raising cash by selling stocks, marking the latest measure to ease pressure on the sector, which has seen several companies collapse and threatens the wider economy.
Sydney, Seoul, Singapore, Wellington, Taipei and Jakarta were also in positive territory, though Tokyo dipped with Manila.
Attention is turning to the United States this week with a number of Fed officials due to speak, including boss Jerome Powell, while Friday sees the release of key jobs data, which could provide an idea about the bank's plans for monetary policy.
Bets on a slowdown in its pace of rate hikes have boosted markets for the past weeks, but some high-ranking members on Monday looked to play down the chances of a more dovish pivot.
St. Louis Fed chief James Bullard warned "markets are underpricing a little bit the risk that the (policy board) will have to be more aggressive rather than less aggressive in order to contain the very substantial inflation that we have in the US".
And Richmond Fed president Thomas Barkin added: "I'm very supportive of a path that is slower, probably longer and potentially higher than where we were before."
The officials indicated borrowing costs would not likely come down until the end of next year or in 2024.
28 November 13:30
Invicta grows earnings over a third amid boost from weaker rand
Industrial holding company says its earnings jumped more than a third in its half year to end-September, when it also got a boost from its cost-cutting efforts and its strategy of bulking up its inventory.
Group revenue rose 7% to R3.8 billion to end-September and headline earnings 35% to R278 million in the six months to end-September, but Invicta has opted not to pay a dividend. During the period, however, it bought back about 4.7% of ordinary shares and 5% of its preference shares, to the value of about R167 million.
Valued at R2.85 billion on the JSE, Invicta focuses supply and distribution of industrial consumables, spare parts and capital equipment.
CEO Steven Joffe said the firm delivered "robust" results in light of tough conditions, while it pleased with the improved performance of its offshore interests. The firm is looking to generate half its earnings offshore by 2026.
"The Ukraine war has resulted in a volatile world economic environment, causing both logistical issues and higher energy prices, effecting all aspects of business," he said in a statement.
"The Group strategically increased its inventory levels to deal with these factors as well Covid-19 restrictions and, was able to keep on supplying its customers at a high level, a mantra we have consistently followed.”
Joffe adding that the strong performance, particularly from Invicta’s offshore operations which was further enhanced by the weaker Rand, meant that these operations contributed more than 40% to the group’s profits.
“The cost reduction measures enforced by the Covid-19 pandemic also remain embedded in the operations and have further contributed to the performance of the Group, assisting in offsetting inflationary pressures,” he said.
Invicta's shares were unchanged at R28.50 in afternoon trade on Monday, but are up more than 5% for the year to date.
28 November 12:59
Huge Group holds onto dividend amid economic uncertainty
Technology focused investment holding company Huge Group has opted to preserve its cash in its six months to end-September, citing an uncertain economic outlook and pressure on the valuations of its connectivity businesses.
Net asset value per share rose from 897c per share to 939c in the course of the six months to end-September, but the firm said the outlook was "very uncertain," while its shares were trading at almost 70% discount at period end.
Huge has a R1.5 billion portfolio of nine principal investments, including payment services for terminals to over 30 000 merchants under Huge Connect, as well as Huge Telecoms, which provides telephone and voice services to over 16 000 corporate customers. These two businesses account for over 70% of its portfolio.
The firm, which listed on the AltX in 2007 and migrated to the main board of the JSE in 2016, said on Monday its focus in its second half will be on marketing the group to investors, and it believed its discount will narrow as it realises value from its businesses.
"We believe that this value is realisable, and although we are cognizant of calls to unlock this value through disposals, we are weighing these calls up against our desire to build the portfolio, to continue to increase its value," it said.
During the period under review, the value of its connectivity investments, comprising Huge Connect, Huge Distribution, Huge Networks, and Huge Telecom, had decreased because of higher costs of capital and a lower growth backdrop. This has been offset by value increases from its recent investments in Glovent and Tethys Mobile, which are x-tech investment opportunities, and Interfile, which is a software investment opportunity.
In afternoon trade on Monday Huge's shares were unchanged at R2.32, valuing it at R401.5 million on the JSE.
28 November 10:43
Reunert climbs as it reports double-digit profit growth
JSE-listed ICT and electrical engineering firm Reunert’s share price was up over 5% on Monday as it reported double-digit growth in revenue and profit in its results for the year to end-September.
The group’s revenue increased 16% to R11 billion from R9 billion in the previous period, while operating profit soared 17% to R1.2 billion from R1 billion.
Reunert reported a 9% jump in headline earnings to 519 cents, from 478 cents in the previous period.
The company said its performance could be attributed to improvements in the electrical engineering and applied electronics segments, as well as another steady performance from the ICT segment, despite the impact of load shedding.
"In addition, despite the numerous challenges in the group's supply chain resulting in additional cash being invested into working capital, the group retained its ability to reward shareholders through an 8% increase in dividends."
This translated into a gross final cash dividend of 224 cents per ordinary share, from 207 cents in the prior period.
28 November 09:11
Oil plunges to lowest since 2021 as China unrest rattles market
Oil tumbled to the lowest level since December as a wave of unrest in China punished risk assets and clouded the outlook for energy demand, adding to stresses in an already-fragile global crude market.
West Texas Intermediate sank below $74 a barrel following three weeks of losses. Protests over harsh anti-virus curbs erupted across the world’s largest crude importer over the weekend, including demonstrations in Beijing and Shanghai, spurring a broad selloff in commodities as the week opened.
The rare show of defiance is raising the threat of a government crackdown.
The unrest aided the dollar as a haven, making raw materials less attractive, and hurt mobility in China. It also brings the possibility authorities could respond with tighter curbs, with Covid-19 cases hitting a record this month.
Oil’s leg lower is the latest twist in what’s been a tumultuous 12 months, with volatility driven by the war in Ukraine, aggressive central bank tightening to combat inflation, and China’s relentless attempts to eradicate Covid-19.
In recent days, European Union diplomats have also been locked in talks over a cap on Russian crude prices, with negotiations set to resume later on Monday.“Sentiment in the oil market remains negative, and developments over the weekend in China will certainly not help,” said Warren Patterson, head of commodities strategy at ING Groep NV in Singapore. Congestion data from Baidu showed peak-hour traffic in major Chinese cities on Monday morning declining sharply. In Beijing, the capital, traffic was down 45% from a year ago, while in Guangzhou it was 35% lower.
Chinese oil demand could average of 15.11 million barrels a day this quarter, down from 15.82 million a year ago, according to Kpler, a data and analytics firm.
The “demand outlook will deteriorate before it gets better,” said Fenglei Shi, director of Greater China oil market midstream and downstream at S&P Global Commodity Insights, citing an uptick in lockdowns. Aside from China, traders were also assessing a US move to grant supermajor Chevron Corp. a license to resume oil production in Venezuela after sanctions had halted all drilling activities almost three years ago. The sanctions relief comes after Norwegian mediators announced the restart of political talks between President Nicolas Maduro and the opposition this weekend.
Prices:WTI for January delivery shed as much as 3.2% to $73.82 a barrel on the New York Mercantile Exchange, before trading at $73.97 at 6:01 a.m. in London.
Brent for January settlement was 2.9% lower at $81.19 a barrel on the ICE Futures Europe exchange.
Key market metrics are signaling weaker conditions. WTI’s prompt spread - the gap between its nearest two contracts - was 17 cents a barrel in a bearish contango pattern compared with $1.29 a barrel in backwardation a month ago.
Since the onset of the pandemic, China’s approach to dealing with Covid-19 has been founded on mass testing and widespread lockdowns to suppress outbreaks, along with vaccinations. That’s hurt energy demand and spurred a buildup of resentment about the restrictions as other nations opened back up. Despite the web of rules, virus cases rose to a record this month.
In Europe, EU members can’t yet forge a consensus on how strict the Group of Seven-led price cap on Russian oil should be.
While Poland and the Baltic nations have objected to a proposal for $65-a-barrel limit, making the case that it would be too generous to Moscow, shipping nations like Greece favour a higher level. Russia has said it will ban oil sales to anyone participating.
Gains in the US dollar typically make commodities priced in the currency more expensive for importers. As traders tracked developments in China, a Bloomberg gauge of the greenback advanced as much as 0.5%.
28 November 07:46
Asian markets, crude drop on China unrest
Stocks and oil prices sank Monday on concerns about protests across China calling for political freedoms and an end to the government's hardline zero-Covid policy, fuelling uncertainty in the world's number-two economy.
Hundreds of people took to the streets at the weekend in the country's biggest demonstrations since pro-democracy rallies in 1989 were crushed.
A deadly fire in the Xinjiang region on Thursday served as the catalyst for the public anger, with many blaming virus lockdowns for hampering the rescue effort.
People have taken to the streets in Beijing, Shanghai, Guangzhou and Chengdu calling for an end to lockdowns, after an easing of some measures had fuelled hopes of a lighter pandemic approach.
China-linked stocks took the brunt of selling, with Hong Kong's Hang Seng Index down two percent and Shanghai off one percent. The yuan was off more than one percent.There were also losses in Tokyo, Sydney, Seoul, Singapore, Taipei, Jakarta, Bangkok and Wellington.
"Sentiment has turned sour as unrest across China grows," said SPI Asset Management's Stephen Innes.
"Protest of this extent is rare in the country and raises many uncertainties.
"The best scenario is further easing and reopening, but the speed at how things deteriorated over the weekend suggests the government needs to act fast. The risk of the situation escalating from here and short-term volatility remains high."
Ken Cheung of Mizuho Bank added: "It appears that the zero-Covid policy is reaching its tipping point. More easing or refinement on the Covid measures will be needed to curb discontent."
The prospect of a hit to demand in the world's biggest crude importer hammered oil prices, with both main contracts down more than two percent.
The selling has taken a bit out of recent gains across markets sparked by hopes of a slowdown in the Federal Reserve's interest rate hikes as inflation finally shows signs of softening.
However, some observers said the protests could provide long-term benefits as they could force President Xi Jinping to shift away from his strict, economically damaging measures sooner.
Teneo Holdings' Gabriel Wildau said: "I don't expect Xi to publicly admit error or show weakness, but this wave of protests could cause the leadership to decide privately that the exit needs to proceed more quickly than previously planned."
Investors are now looking ahead to the release of US jobs data at the end of the week, which could provide clues about the Fed's next moves, while speeches by central bank boss Jerome Powell and other key policymakers will also be pored over.
26 November 09:23
Wall St typically rallies in December, but investors have some caution this year
Investors hoping for the year-end to bring stock market gains after a punishing year have history on their side as US equities traditionally rally during the month of December, but many remain skeptical of forecasting a rise.
The S&P 500 has gained an average of 1.6% during December, the highest average of any month and more than double the 0.7% gain of all months, according to data from investment research firm CFRA. September, meanwhile, is the worst month of average for stocks, with a 0.7% average decline.
Gains would be welcomed by many investors after seeing the S&P 500 Index fall around 16% so far this year. Still, weighing on the market has been the US Federal Reserve's actions to aggressively tighten interest rates to fight inflation.
"December is usually a good time for investors but right now they are stuck because it’s really the focus on rates that will cause the market to go up or down in the short term," said Sam Stovall, chief investment strategist at CFRA Research.
"The question this year is will the Fed raise by 75 or 50 basis points, and whether there will be any dovish commentary that suggests that the Fed will raise rates one or two more times next year and then call it quits,” Stovall said.
December is typically a good month as fund managers buy stocks that have outperformed over the year for so-called "window dressing" of their portfolios while there are year-end inflows and lower liquidity during holiday-shortened weeks, said Stovall.
At the same time, U.S. stocks have risen during the last five trading days of December and the first two days of January 75% of the time since 1945, according to CFRA, in a so-called Santa Claus Rally. This year, the time period starts on Dec. 27. The average Santa rally has boosted the S&P 500 by 1.3% since 1969, according to the Stock Trader's Almanac.
This year, however, investors' focus has largely shifted to the Fed and the pace at which it will continue raising interest rates as it attempts to bring inflation down from near 40-year highs.
"Investors tend to be optimistic going into the new year but this is still the Fed's market," said Brian Jacobsen, senior investment strategist at Allspring Global Investments. "The old saying is that 'the trend is your friend and don’t fight the Fed,' but now it’s 'the Fed isn't your friend, so don’t fight the trend.'"
Investors are pricing in a 75% chance that the Fed will raise rates at its Dec. 14 meeting by 50 basis points to a target rate of 4.5%, while the probability of another jumbo 75 basis point move is at 24% according to CME's FedWatch tool.
Minutes released Wednesday from the Fed's Nov. 2 meeting showed that a "substantial majority" of policymakers agreed it would "likely soon be appropriate" to slow the pace of interest rate hikes," though Fed members believe that there is "significant uncertainty about the ultimate level" of how how rates need to rise.
Another outsized increase in rates could impede the more than 10% rally in the S&P 500 since the start of October that has been fueled largely by hopes that inflation has peaked from 40-year highs, allowing the Fed to slow and eventually pause its most aggressive rate hiking cycle since the 1970s.
Fed Chair Jerome Powell, who will speak on Nov. 30, has signaled that the central bank could shift to smaller rate hikes next month but has also said rates ultimately may need to go higher than the 4.6% that policymakers thought in September would be needed by next year.
"Sharply reduced valuation for public and private firms is one painful consequence" of higher interest rate costs and will likely mean that the S&P 500 will fall by 9% to 3,600 over the next 3 months, Goldman Sachs strategists wrote in a note Monday.
Still, there may be other reasons to hope for another seasonal rally this year.
Short sellers have covered nearly $30 billion in short positions since the start of the month, with the largest covering coming consumer discretionary, health care, and financial stocks, according to S3 Partners.
"Short sellers are trimming positions as the market rallies, and they incur mark-to-market losses – and possibly trimming positions in anticipation for a year-end rally," said Ihor Dusaniwsky, managing director at S3 Partners.
The painful double-digit declines in both U.S. stocks and bonds, meanwhile, have made both asset classes more attractive for long-term investors, said Liz Ann Sonders, chief investment strategist at Charles Schwab.
"Things look pretty decent if you have a one-year time horizon, but not without some potentially significant volatility in the next quarter or two," she said.
25 November 07:53
Asian markets mixed as easing Fed fears tempered by China Covid-19
Asian markets were mixed Friday at the end of a week that has seen hopes the Federal Reserve will tone down its monetary tightening campaign offset by fresh lockdown fears as Covid-19 cases surge in China.
With Wall Street closed for the Thanksgiving break, trading was light with few catalysts to drive action on trading floors and investors now looking ahead to the release of US jobs data next week.
The mood across markets has picked up this month as a series of indicators suggested the world's top economy was showing signs of weakness after the Fed ramped up interest rates.
The standout reports were consumer and wholesale inflation, which came in much lower than forecast and provided the central bank with room to row back on its hawkishness.
And while a selection of Fed officials lined up to warn there was more tightening to come, there is an expectation that the days of bumper 75-basis-point increases are gone.
That has slightly eased worries that the sharp rise in borrowing costs could tip the US economy into recession, though many observers still see a contraction coming.
Asian equities struggled to end the week on a positive note, however, with Tokyo, Hong Kong, Singapore, Seoul, Manila and Jakarta all down. There were gains in Shanghai, Sydney, Wellington and Taipei.
Regional sentiment was being sapped by ongoing fears about the spike in Covid cases in China, which authorities are trying to contain with a series of targeted measures in big cities including Beijing and Shanghai, though they are short of full-on lockdowns.
Still, SPI Asset Management's Stephen Innes said there appeared to be less concern about the government's reaction as it looks to ease parts of its strict Covid-zero strategy.
"Investors are recognising it's normal for cases to increase as the Chinese economy begins its long and winding road to normalcy," he said in a commentary.
"So stock and currency market investors are tentatively looking through the current lockdown regime while betting on the more optimistic interpretation that China is hitting the limits of 'Covid-zero' and the authorities' efforts to loosen restrictions will continue."
24 November 15:28
Broadcast market share boosts for e.tv, eNCA owner
The eMedia group, owner of e.tv and eNCA, has reported an increase in its prime-time broadcast audience market share, which jumped to 36.2% in the six months to end-September, up from 31.8% in the prior period.
When compared to SABC Group at 27.3% and DStv share at 30.5%, eMedia continues to be the biggest broadcaster in SA, the firm said on Thursday. It added that its market share stands it in good stead amid general economic pressure and load shedding, which is putting pressure on the “number of eyeballs” tuning in, and therefore on advertising revenue.
While eMedia reported a 5% decrease in its average minute rating (AMR) - a metric for the average number of audiences per minute on the platform – the industry overall reported a 16.5% AMR reduction.
"It shows that we are doing something right, and that our programming is line with audience demand," CEO Khalik Sherrif said in a statement. "It further illustrates that we are giving our advertisers value for their spend with us."
The broadcaster said it managed to increase its advertising revenue by 2% to R1.12 billion despite the decline in AMRs and an 8% decrease in total TV advertising spend compared to the previous period.
It reported R1.5 billion in overall revenue for the period, a R31.3 million increase from the previous period.
The e.tv channel, which was launched 24-years-ago, is still the main generator of revenue, with a jump in market share from 21.8% to 23.7%.
It said its satellite television offering Openview was in more than 3 million SA households, which a market share increase to 12.5% from 10%.
The company said it has also signed a five-year exclusive deal with MultiChoice for its news channel eNCA to continue on DStv. That deal ends in March 2027.
The group's shares were unchanged at R3.66 on Thursday, having lost 16% so far in 2022, but having risen 10.5% over a one-year period.
24 November 11:21
Thungela increases stake in Zibulo Operation and Elders Project to 100%
Coal miner Thungela Resources has reached a share-swap agreement with its BEE partner, Inyosi Coal, which will see acquire a 27% stake in Anglo American Inyosi Coal.
Thungela will then own 100% of Anglo American Inyosi Coal, whose assets include the Zibulo operation and the recently approved Elders production replacement project.
Thungela said the transaction is aligned with it strategy to maximise the full potential of existing assets and optimise capital allocation.
As a result of the transaction, which is anticipated to be earnings accretive, the group will benefit from the full economics of the Zibulo operation and the Elders production replacement project, resulting in an uplift to earnings.
Thungela's shares had risen 4.4% to R280.20 on Thursday morning.
24 November 11:01
Rand hits best level in months
The US dollar was broadly weaker on Thursday as investors, encouraged by the prospect of a slower pace of interest rate hikes by the Federal Reserve, placed bets on riskier assets.
This helped the rand break through R17/$ for the first time in months. By late morning, the rand was trading almost 2% stronger against the dollar at R16.9330 - its strongest level since July 8. It also firmed against the pound (R20.45) and the euro (R17.64).
The local currency also benefited from expectations that the Reserve Bank will hike interest rates by 75 basis points later on Thursday, following hotter-than-expected inflation numbers for October. Higher interest rates are appealing to foreign investors, who are on the hunt for good returns.
Some analysts see a possible 100 basis-points hike after the inflation number, says Andre Cilliers, currency strategist at TreasuryONE. CPI was up 7.6%, from 7.5% last month, as food inflation jumped.
The eagerly awaited minutes of the Fed's November meeting showed officials were largely satisfied they could now move in smaller steps.
"I think now it is almost certain that we'll see the FOMC slow its pace of tightening from December," said Carol Kong, a currency strategist at the Commonwealth Bank of Australia (CBA).
The dollar index, which measures the greenback against six major peers, was down 0.14% at 105.75, after sliding 1% overnight.
The Fed raised its key rate by three-quarters of a percentage point this month, for the fourth straight time in an effort to tame stiflingly high inflation.
But slightly cooler-than-expected US consumer price data has stoked hopes of a more moderate pace of hikes. Those hopes have seen the dollar index slide 5.1% in November, putting it on track for its worst monthly performance in 12 years.
Citi strategists said there is still substantial uncertainty around how high rates might climb, despite the consensus that rates will rise more slowly.
The minutes also showed an emerging debate within the Fed over the risks that rapid policy tightening could pose to economic growth and financial stability. At the same time, policymakers acknowledged there had been little demonstrable progress on inflation and that rates still needed to rise.
Data on Wednesday showed US business activity contracted for a fifth straight month in November, with a measure of new orders dropping to its lowest level in 2-1/2 years as higher interest rates slowed demand.
CBA's Kong cautioned, however, that the markets are too optimistic about a possible imminent end to the tightening cycle and noted there was still heavy support for the US dollar due to China's zero-COVID polices.
Rising coronavirus cases have led Chinese cities to impose more curbs, increasing investor worries about the economy and putting a lid on risk appetite. China reported a record number of infections on Thursday.
The yuan firmed after Chinese state media, quoted the cabinet as saying that said Beijing will use timely cuts in banks' reserve requirement ratio (RRR), alongside other monetary policy tools, to keep liquidity reasonably ample.
The Japanese yen was one of the strongest gainers among major currencies against the dollar, climbing 0.5% to 138.88.
The euro was up 0.39% at $1.0435, while sterling was last trading at $1.2090, up 0.43% on the day. The pound rose 1.4% overnight after preliminary British economic activity data beat expectations, though it still showed that a contraction was underway.
The Australian dollar rose 0.25% to $0.675, while the kiwi was 0.17% higher at $0.6255.
US markets will be closed on Thursday for Thanksgiving and liquidity will likely be thinner than usual.
The South African interest rate announcement is expected at 15:00.
REUTERS, with additional reporting by News24.
24 November 10:02
Tsogo Sun Gaming restores interim dividend despite lag in pandemic recovery, load shedding
Hotel and gaming company Tsogo Sun has restored its interim results for the six months to end September, saying on Thursday that while its income still lags pre-Covid-19 levels, its leaner operations has helped its core profit almost recover.
The total income generated rose 43% to R5.46 billion in gaming group's half year, still 8% below pre-Covid-19 levels, with the firm opting to pay a 30c per share dividend, representing a R315 million payout.
Earnings before interest, taxation, depreciation and amortization (Ebitda) rose 52% to R1.95 billion, about 2.5% lower than the same period of 2019, despite Tsogo's operations in KwaZulu-Natal taking a hit from flooding during the reporting period, while Mpumalanga had to deal with road closures due to protest action against fuel prices.
Casino operators had been hard hit during Covid-19, while even lessened restrictions had affected late-night operations. Tsogo had responded by pursuing numerous efficiencies, including flexi-time for staff to match demand, saying on Thursday this had set a good base for the coming financial year.
The firm added that a positive development to note was that the income generated by the group for the month of October 2022 is the second highest since December 2019.
However, the company is battling rising utility costs as well. Also, to keep casinos open during load shedding, Tsogo had to spend R23 million on diesel during the interim period compared to R2 million in the prior period. It also had to hire water tankers for areas that ran out of water as a result of reservoirs being unable to provide water due to load shedding.
In morning trade on Thursday Tsogo's shares were up 0.76% to R13.21, having risen almost a third over the past year.
24 November 08:16
Stocks rise, dollar slips as Fed signals softer rate hike pace
Asian markets rallied Thursday and the dollar weakened further after minutes from the Federal Reserve's latest policy meeting suggested it could slow its pace of rate hikes.
The news provided traders with a cushion against concerns about surging Covid cases in China that have fanned speculation authorities will revert to lockdowns and other economically debilitating measures to fight the outbreak.
Wednesday's much-anticipated minutes showed most US central bank chiefs felt smaller increases would "likely soon be appropriate" as the economy shows signs of weakness following almost a year of monetary tightening.
Bets were growing on officials announcing a 50-basis-point lift at their December gathering, down from four straight 75-point hikes, with officials keeping tabs on economic data.
The latest indicators showed the manufacturing and services sectors continued to contract last month, while jobless claims picked up.
The developments allowed Wall Street traders to head off to their Thanksgiving break with a spring in their step, the S&P 500 ending at a two-month high as they finally see a glimmer of light at the end of the tunnel after a painful year.
And Asia followed suit, with Tokyo, Hong Kong, Shanghai, Sydney, Seoul, Singapore, Taipei, Manila and Jakarta all in the red.
The more risk-on environment was also reflected in a further drop in the dollar against its peers, having surged for much of the year as traders bet on ever-higher US interest rates.
"Equities are revelling in the wake of the... minutes after the Fed telegraphed a downshift from jumbo to extra-large rate hikes," said SPI Asset Management's Stephen Innes.
"A commitment to moving toward restrictive monetary policy remains intact, but the (policy board) is ready to slow the path toward that destination."
He added that a less aggressive Fed "should pave the runway for take-off in Asia, fuelled by expectations of China's reopening by March next year".
Investors are keeping a close watch on China after it announced a record number of new Covid cases on Thursday as authorities worked to curb the spread with snap lockdowns, mass testing and travel restrictions.
While officials are trying more targeted measures to contain the disease, there remains a concern that they will resort to the painful city-wide shutdowns seen in Shanghai earlier this year as part of the country's zero-Covid strategy, which hammered the economy.
However, the concern has been tempered somewhat after China signalled fresh support measures aimed at boosting growth, with the State Council saying tools would be used to ensure liquidity in markets.
The comments led to talk of another cut in the amount of cash banks must keep in reserve, freeing them to lend more.
23 November 11:04
SA's first specialised dagga investment firm fails to raise enough cash for JSE listing
South Africa’s first special purpose acquisition company (SPAC), Cilo Cybin, has not raised enough funding in its initial public offering (IPO) to be able to list on the JSE.
It said 1 892 members of the public subscribed for an aggregate amount of R20.5 million of Cilo Cybin shares during its share offer, which started in September, and closed in November.
"Unfortunately, the JSE Limited minimum capital requirement for a listing, as a SPAC as set out in the Cilo Cybin Prospectus, has not been met within the set timeframe and the listing on the JSE as a SPAC cannot proceed," it said in a market update.
The company will now contact investors so that they can be refunded.
"Due to new developments on the horizon, and the need to be able to respond rapidly to take full advantage of these opportunities, we have determined it is in the best interest of the company to focus on its growth initiatives, and thus to postpone listing to a later date."
23 November 07:44
Asian markets rise on rate hopes but China Covid-19 casts shadow
Asian markets rose on Wednesday but traders flitted between hopes for a halt in sharp US interest rate hikes and concern that a surge in China's Covid cases will see officials impose more painful lockdowns.
Wall Street enjoyed a timely rally thanks to healthy retailer earnings and ahead of the holiday shopping season that starts this week, amid signs US consumers - the economy's key driver - remain resilient to higher borrowing costs and inflation.
A string of data in recent weeks suggests the US Federal Reserve's long-running monetary tightening campaign is beginning to bite as parts of the economy slow, giving heart to investors who see that as giving officials room to tone down their hawkishness.
While several policymakers have reiterated the need to keep lifting rates to beat price rises, they appear to be more open to a softer approach following four straight 75 basis-point increases.
"Investors have focused their attention on Fed messaging emphasising the likely need to move toward a lower pace of hikes while better than expected company earnings reports also buoyed sentiment," said Rodrigo Catril at National Australia Bank.
"Playing to a slower need of Fed hikes narrative, (on Tuesday) the Richmond Fed Manufacturing Survey came in slightly below expectations, with data confirming the peak inflation narrative. Other regional manufacturing data already released have suggested further contraction in the sector."
Minutes from the Fed's policy meeting this month will be pored over when they are released Wednesday, with traders hoping for some insight into the bank's thinking on rates.
But observers pointed out the gathering took place before data showed a sharp drop in inflation for October.
Asian investors tracked their US counterparts in early trade Wednesday.
Hong Kong bounced back after five days of losses.
The gains were helped by tech firms following a report that Alibaba's financial arm Ant Group could be hit with a fine of $1 billion that would likely spell the end of a long painful regulatory crackdown on the firm as part of a wider overhaul of the sector.
"It's not a big fine, it's more a slap on the wrist," Kerry Goh of Kamet Capital Partners said."This removes the overhang of regulatory risk and it's just a further sign that we are closer to the end of the regulatory cycle."
Shanghai, Sydney, Seoul, Singapore, Taipei, Manila and Jakarta also rose. Tokyo was closed for a holiday.
Still, confidence remains restrained by a Covid outbreak in China that has seen infections surge to levels last seen earlier in the year when Shanghai was plunged into a debilitating lockdown that hammered the world's number two economy and reverberated globally.
The latest spike across the country, and particularly in Beijing, has led officials to impose targeted containment measures, but there is a concern they will revert to even stricter controls if the crisis does not subside.
Analysts have warned that a major slowdown in the Chinese economy could spark a recession globally.
22 November 11:06
Bidcorp sales climb to record levels despite Chinese lockdowns
In a trading update for the four months to October, food service group Bidcorp reported record sales. Its share price rose almost 4% on Tuesday morning, but at around R321 remained slightly lower than at the start of the year.
In November, its sales were 29% higher than the same month in the previous year, and 34% higher than in 2020.
Bidcorp supplies catering and food equipment to various industries and operates as Bidfood in Europe, South America, Africa, Australia and New Zealand, and as Angliss in Asian countries.
The company says that Australia and New Zealand delivered excellent results, while other businesses also grew - except for its Angliss Greater China business, which has seen no improvement in its operating environment since January 2022 due to ongoing Covid-19 lockdowns. The business remains profitable but below the levels of the prior comparative period.
Last year, the company uncovered a R694 million fraud ring at one of its Angliss operations in Hong Kong.
In all geographies (other than Greater China) discretionary spending appears to have normalised and in some cases improved, despite several sectors - such as hotels, workplace catering, entertainment, sports events, business travel, conferences, and the cruise line industry - not yet fully operating at pre-pandemic levels, Bidcorp said.
Demand from its institutional customers, including education, hospitals, aged care, prisons, the military, and government departments, remains "stable".
22 November 08:30
Curro appoints new CFO in reshuffle after Greyling's resignation as CEO
Curro has appointed its financial manager Burtie September as the JSE-listed private school group’s new chief financial officer (CFO).
September is filling the position after the previous CFO Cobus Loubser was appointed CEO. Both appointments are effective on 1 January. This was after outgoing CEO Andries Greyling said he will resign from the board on 1 January "to pursue other interests".
Greyling has been CEO since 2017 and with Curro for the past 15 years.
September previously worked at South African Breweries as a management accountant, before he was employed as a senior accountant at Woolworths Financial Services for more than two years. He joined Curro in July 2016 as its group financial manager.
"The board welcomes Burtie to the role of CFO and looks forward to his continued and valuable contributions to the company," Curro said.
22 November 06:31
Asian markets struggle as China Covid-19 worries build
Growing fears about China's latest Covid-19 outbreaks Tuesday rattled investors, who fear authorities will revert to highly restrictive containment measures that have already dealt a chilling blow to the world's number two economy this year.
After starting November with a rally thanks to easing inflation concerns and signs China was edging towards a looser approach to the disease, the optimism has been given a massive jolt since the country announced its first virus deaths in six months.
They come as infections rise across the country, with residents in Beijing worried that leaders will introduce lockdown measures similar to those seen earlier in the year in Shanghai, which lasted for months.
The flare-ups come just a week after China said it would begin rolling back some of the strict Covid rules that have been in place since the pandemic started in 2020, even as the rest of the world has moved on.
Analysts said the latest developments highlight the long road ahead for China in emerging from the crisis as President Xi Jinping sticks solidly to a zero-Covid strategy that is widely blamed for the country's economic troubles.
"Risk sentiment has been under pressure on questions around China reopening," said SPI Asset Management's Stephen Innes.
"Some investors are convinced that China's reopening is a formality and will be catalysed by the (World Health Organization) downgrading Covid to an endemic.
"We know that China's reopening will be laced with fits and starts as the two-step-forward-one-step-back routine becomes the norm."
Hong Kong, which thundered more than 10 percent higher in a three-day surge earlier this month, fell for a fifth straight day, while Shanghai was also lower along with Seoul, Taipei and Wellington.
Still, there were gains in Tokyo, Sydney, Singapore, Manila and Jakarta.
That came after a drop on Wall Street, where trading is lighter than usual owing to the Thanksgiving break at the end of the week.
Wednesday sees the release of minutes from the Federal Reserve's most recent policy meeting, which will be pored over for insight into officials' thinking against the backdrop of four-decade-high inflation and signs of a slowing economy.
Hopes that the bank will begin to take its foot off the pedal were boosted earlier this month by figures showing inflation slowed more than expected, suggesting a series of hikes were beginning to bite.
Still, several members of the Fed's top brass have warned against getting carried away and said more increases were needed to get on top of prices.
But JPMorgan Chase & Co's Marko Kolanovic said markets would likely stumble into the new year and only pick up once the US central bank takes a more dovish stance on borrowing costs. JPMorgan saw risk assets to trade "rangebound with a more pronounced downside risk".
21 November 19:05
Naspers, Prosus warn of large profit declines
In a trading statement for the half-year to end-September, Naspers said its headline earnings per share would fall by between 100.6% to 107.60%. This would leave it with a headline loss of between 2 and 28 US cents.
Its subsidiary Prosus, which almost completely accounts for Naspers’ results, saw its headline earnings per share fall by between 96.5% to 103.5%.
Apart from a 28.8% stake in Tencent, Prosus owns various online businesses in the classifieds, food deliveries, payments and education sectors.
"During the period, growth expectations and valuations came under significant pressure as consumers adapted to the realities of higher inflation and interest rates on their daily lives and spending power," Naspers and Prosus said in a statement.
Prosus says its e-commerce businesses maintained "strong top-line growth momentum".
But it took a hit from a sharp decline in Tencent's fortunes. A regulatory clampdown in the Chinese tech sector and the economic impact of that country's "zero-Covid" policy have put Tencent under pressure. Last month, the company's share price reached its weakest level in more than five years.
Prosus' share of Tencent's fair value losses on financial instruments came to $372 million in the past six months, compared to fair value gains of $1 billion in the prior period. Where Prosus saw a gain of $12.3 billion from the sale of a 2% interest in Tencent in the prior year, the company only netted $2.8 billion on the selldown of Tencent shares in the current period.
Naspers and Prosus will announce their half-year results on Wednesday.
21 November 18:09
Oi prices plunge on China fears
World oil prices plunged more than five percent Monday, reaching the lowest levels since January, on forecasts of a hit to Chinese demand.
Brent North Sea crude slumped 5.3 percent to $83 per barrel and WTI shed 5.6 percent to $75.62 as China's first coronavirus death in six months triggered fears of renewed strict lockdowns in the world's second biggest economy.
21 November 07:57
York's new CFO appointment prompts PwC's resignation as external auditor
York Timber, one of the oldest companies on the JSE, has appointed Schalk Barnard, from its external auditor PwC, as chief financial officer.
York said that as a result of Bernard’s appointment, PwC’s continued appointment as the forest owner and solid-wood processor’s external auditor contravened regulations, especially regarding independence.
"In the circumstances, shareholders are hereby further advised that PwC has resigned as the external auditor of the company with immediate effect."
York said it will start to look for a new auditor, and would announce the appointment to shareholders. Bernard’s appointment will be effective within the next three months.
21 November 07:37
Hong Kong leads Asia losses on fresh China Covid fears
Asian markets fell Monday as China's first Covid death in six months sparked fears officials would reimpose strict, economically painful restrictions to fight outbreaks across the country.
The news threw a spanner in the works for investors who had grown hopeful of a gradual reopening after Beijing eased a number of virus-fighting measures earlier this month.
The death of an 87-year-old man in Beijing on Sunday came as infections across the country spiked, testing authorities' plans to loosen their grip by lowering quarantine times for foreigners and cancelling mass tests.
Beijing has in recent days moved to confine some residents to their homes and ordered others to quarantine centres.
The measures dealt a particular blow to Hong Kong's Hang Seng, which fell more than two percent, extending a sell-off at the end of last week and eating further into a recent massive rally. Shanghai was down.
"It feels like one step forward, two steps back," Willer Chen, at Forsyth Barr Asia, said.
"It is super hard to reopen in the short term given winter is coming and cases are at a super high level and spreading across the whole country."
There were also losses in Tokyo, Sydney, Seoul, Singapore, Taipei and Manila. Kuala Lumpur dropped with the ringgit after Malaysian elections ended with no clear winner, fuelling uncertainty in the country.
Regional investors brushed off a positive end to last week for US and European markets, while attention turns to the release later in the week of minutes from the Federal Reserve's most recent policy meeting.
Global markets have enjoyed a broadly healthy November thanks to signs of China easing and indications of slowing US inflation that fanned optimism the Fed would start to slow its pace of interest rate hikes.
The well-below-forecast readings in the consumer and wholesale indexes suggested months of strict tightening measures were finally working through the economy and having results, allowing for a less hawkish Fed.
But several officials soon lined up to warn that more needed to be done to get inflation back down from four-decade highs to more bearable levels.
The sharp rise in interest rates and elevated inflation has this year sent shudders through trading floors as investors fear they will send the US economy into recession.
In the latest comments, Atlanta Fed chief Raphael Bostic said he saw borrowing costs hitting five percent -- from their current levels of around four percent -- before they are held.
Boston Fed president Susan Collins remained open to options for the next hike -- including a fifth straight 75-basis-point lift.
However, National Australia Bank's Tapas Strickland said: "That comment by itself sounds hawkish, but Collins overall was more cautious and also expressed confidence that policymakers can tame inflation without doing too much damage to employment.
"Instead, it was likely that comment coming after a bevy of Fed Speakers during the week that added a hawkish hue to it."
While the mood among traders remains less than bright, there appears to be a feeling that there is some light at the end of the tunnel.
"Whether it's the time of year or recession uncertainty, few seem inclined to chase the risk rally," said Stephen Innes at SPI Asset Management.
"Still, there is growing recognition that the consensus view of recession and earnings downgrades could face mitigation from declining inflation.
"A lower dollar, lower volatility and the acknowledgement of having to buy early could improve the risk outlook."
And Bokeh Capital Partners' Kim Forrest added that 10-year Treasury yields had tumbled since late October, showing "a softening inflationary environment".
"The bond market is a little bit smarter about what the Fed needs to do and what it's going to do. It's been telling us that the Fed probably won't be able to get its rates up to five percent nor will it need to," she told Bloomberg Television.
Demand concerns caused by China's Covid woes further hit oil prices, with both main contracts in the red, having tumbled last week.
19 November 08:02
Global stocks rally, but oil prices slump
US and European stock markets mostly picked up on Friday as investors fished for bargains and shrugged off losses elsewhere, but oil prices dropped over concerns on the world economy.
The JSE's All Share index gained half a percent, with Old Mutual up more than 4%. The rand remained steady at R17.26/$.
London stocks were lifted by official data showing UK retail sales rose in October, rebounding from a 1.5-percent slump in the prior month.
The news also boosted the pound, which fell the previous day on a harsh government budget and confirmation that Britain was in recession.
Major European indices closed in the green, with London's FTSE 100 index up 0.5 percent and the Paris CAC 40 rising one percent.
But analysts cautioned that the UK remains gripped by a cost-of-living crisis.
"It is not the start of a promising trend," said Craig Erlam, an analyst at trading platform OANDA.
Wall Street stocks mostly bounced as well on positive results from retailers including Gap and Foot Locker, while investors tried to shake off concerns over further interest rate hikes by the US Federal Reserve.
The retailers' good news have "mitigated some of the weakness seen earlier this week," following Target's disappointing results, said Patrick O'Hare of Briefing.com.
But with worries about the world's economy and rising coronavirus cases in China, the price of the main US crude oil contract, WTI, tumbled on Friday below $80 a barrel for the first time since the end of September.
The main international oil contract, Brent crude, also fell by nearly three percent Friday around 1630 GMT.
Asian equities experienced mixed fortunes however, as cautious investors tried to gauge the outlook for US interest rates.
While the week has been broadly positive for global markets following softer-than-expected US consumer and wholesale price inflation, a strong reading on retail sales and jobless claims showed resilience in the face of higher interest rates.
Investors also have been downbeat after a string of Fed officials stressed the message that more rate hikes will be needed to bring down surging inflation, feeding fears of a recession in the world's biggest economy.
Boston Fed Bank President Susan Collins was the latest to do so Friday, although she said the central bank's "intent is not a significant downturn."
This came after St Louis Fed President James Bullard warned Thursday that US interest rates might need to go as high as seven percent.
Interactive Investor analyst Richard Hunter said: "Investors seem continually surprised by the Fed merely repeating its mantra."
"Rates are likely to continue rising... and may well stay higher until such time as a sustained slowdown in inflation is evident," he said.
18 November 16:31
Novus Holding's profits cut by global paper shortage, load shedding.
Printer and manufacturer Novus Holdings said on Friday its operating profits plunged almost three quarters in the six months to end-September, hit by issues including excessive paper price increases due to a global shortage, as well as load shedding.
Operating profit fell to R23.3 million to end-September from R90.3 million previously, with revenue dipping 3% to R1.48 billion, with the firm also struggling with higher logistics costs, while own-power generation pushed up costs by an additional R12 million.
Valued at R1.3 billion on the JSE Novus dates back to 1905 and listed in 2015. It operated 4 specialised printing plants and 3 packaging plants, as of 2022, employing about 1 500 people. During the period it also inked a deal for a 75% stake in textbook publisher Pearson SA for a base consideration of R842 million, which prompted R8.4 million in transaction costs during the period.
The Competition Commission had approved the transaction earlier in November, and it will take effect at month end.
Novus said on Friday it hoped that post-Covid-19 supply disruptions, compounded by war in Ukraine, would begin to normalise in 2023. The firm has also made a strategic decision to increase stock to mitigate risk, but said this had proved to be an inadequate buffer against the current cost increases and restrictions on supply.
"Pearson SA has traded in line with plan since entering into the transaction and the prospects appear very positive for it to continue trading in line with its historic performance. The Group views this growth and diversification opportunity very positively and is very satisfied with the transaction process to date," it added.
In afternoon trade on Friday shares of Novus were up 1.06% to R3.80,and have surged by almost two thirds over the past year.
The revenue number has been corrected to R1.48bn.
18 November 15:55
US oil contract falls below $80
The price of the main US crude oil contract, WTI, fell Friday below $80 per barrel for the first time since September on concerns about the global economy and rising numbers of Covid-19 cases in China.Around 1305 GMT, a barrel of WTI for delivery in December was down 1.9 percent at $80.08, having briefly passed below $80 per barrel. Meanwhile, the main European contract, Brent for delivery in January, was down 1.6 percent at $88.33. - AFP
18 November 12:14
Southern Sun jumps 10% after flagging more than doubling of revenue
Shares of Southern Sun, formerly Tsogo Sun Hotels, jumped almost 10% on Friday, after it said revenue had more than doubled in its half-year to end-September, when it also returned to profit.
Easing Covid-19 restrictions and a return of conferencing helped support a normalisation of trading activity, said the group, which expects to report headline earnings per share of between 33.2c and 35.2c to end-September, from a loss of 10.9c previously.
Revenue is expected to be between R1.5 billion and R1.68 billion higher than the prior period's R954 million, with this including R399 million from its separation agreement with Tsogo Sun Gaming.
In 2019, Tsogo Sun Hotels, as it was then called was unbundled and separately listed on the JSE, although an agreement was reached to manage hotels owned by Tsogo Sun Gaming. The R399 million payment relates to termination fees related to management and licensing agreements.
In afternoon trade on Friday Southern Sun's shares were up 6.29% to R4.90, earlier leaping as much as 10.7%.
18 November 06:40
Asian markets rise but caution over rate outlook dulls sentiment
Asian markets edged up Friday, though caution permeated trading floors as investors tried to gauge the outlook for Federal Reserve monetary policy after several officials tried to temper optimism over signs that inflation is slowing.
While the week has been broadly positive for equities following softer-than-expected US consumer and wholesale price figures, a strong reading on retail sales and jobless claims showed plenty of resilience to higher interest rates.
With that in mind, St Louis Fed President James Bullard warned more hikes were needed to bring inflation down from four-decade highs, adding that they might need to go as high as seven percent.
That was followed by Minneapolis Fed boss Neel Kaskari saying he had not witnessed much evidence that underlying demand was cooling and did not want to forecast when the tightening would end.
The comments followed a similar message put out by other policymakers, who have sought to calm markets, which soared in the wake of last Thursday's consumer prices reading.
They also fuelled fears among traders that the sharp tightening campaign -- including four straight bumper 0.75 point increases in a row -- will tip the world's top economy into recession.
On Wednesday, Kansas City Fed chief Esther George said it was unclear how the bank can douse inflation "without having some real slowing" or even a contraction.
Wall Street's three main indexes ended in the red.
Still, Hong Kong led gains across much of Asia thanks to rally in tech firms, and after China indicated it will ease back on some of its strict Covid restrictions and help the troubled property sector.
Tokyo, Sydney, Seoul, Wellington, Taipei, Manila and Jakarta also rose though Shanghai and Singapore dipped.
While most of Asia rose, there was a fear that the recent rally may have run a little ahead of itself.
"The market believes that inflation is on the downtrend. We also believe that, but the fact of inflation having peaked is not a reason for the Fed to turn and cut rates," Paul Christopher, at Wells Fargo Investment Institute, told Bloomberg Radio.
"That's the fundamental disconnect that still exists between the Fed and the market."
And SPI Asset Management's Stephen Innes added: "Things can turn on a dime, primarily when the fear of missing (out) drives sentiment.
"However, the odds of a pre-Thanksgiving rally are giving way to the hawkish Fed drumbeat and pushback on China reopening plays."
The pound clawed back some of its losses suffered Thursday after Britain unveiled a budget filled with 55 billion pounds ($65 billion) of tax hikes and spending cuts that traders fear will deepen a cost-of-living crisis and a recession that could last two years.
17 November 15:40
Netcare slips despite flagging profit growth of a fifth
Shares of Netcare fell slightly on Thursday afternoon, despite the operator of SA's largest private hospital network flagging earnings growth of more than a fifth for its year to end-September.
Headline earnings per share are expected to rise in range of 20 to 20.7%, the firm said in a brief update, benefiting from improving activity levels as Covid-19 abated.
Netcare had said in a voluntary update in September that hospital and mental health activity experienced an increasing trend since February 2022, since the fourth wave subsided, and Covid-19 regulations and restrictions were lifted.
The firm said then that total growth in patient days of approximately 5.4% was expected for 2022, exceeding the full-year guidance of 2% to 3% provided at the time of its half-year results.
In afternoon trade on Thursday Netcare's shares were down 1.26% to R14.10, having fallen 11.5% so far in 2022.
17 November 09:34
Difficult squid season depresses Premier Fishing's earnings
Low volumes of squid catches cut into Premier Fishing's revenue for the year to end-August.
The export of squid is one of the fishing and fish processing group's most important sources of revenue.
While Premier earned R206 million from squid sales in 2021, this fell by half to R103 million in its most recent results.
"The group had a tough year which saw overall revenue dropped by R100 million from R575 million to R475 million, mainly as a result of the squid division," it said this week.
The group made an after-tax profit of around R11 million. As a result of lower-than-expected squid catches and lingering market uncertainty caused by Covid-19, the group said it would not be declaring a dividend.
African Equity Empowerment Investments, a subsidiary of the Sekunjalo Group, owns 56% of Premier's shares. Premier said that AEEI has indicated that it is about to make a "firm intention" to buy out the rest of the group's shares. - Jan Cronje
17 November 06:48
Asian markets sink as rate hike woes return to the fore
Trading was subdued in Asia on Thursday as the optimism that characterised recent sessions was dealt a blow by data showing a resilience among US consumers that gives the Federal Reserve room to keep hiking interest rates.
Two reports showing inflation easing in the world's top economy provided a springboard for world markets over much of the past week as investors took the readings to mean almost a year of monetary tightening was finally kicking in.
But on Wednesday the commerce department said retail sales jumped far more than expected last month, suggesting Americans are still able to weather the higher inflation and interest rate environment.
That was compounded by comments from a top Fed official that she did not see the bank stopping hiking and indicating she was willing to push borrowing costs above five percent, from the current 3.75-4.0 percent.
San Francisco Fed President Mary Daly told CNBC: "Somewhere between 4.75 and 5.25 seems a reasonable place to think about as we go into the next meeting.
"And so that does put it in the line of sight that we would get to a point where we would raise and hold.
"Pausing is off the table right now, it's not even part of the discussion. Right now the discussion is, rightly, in slowing the pace," she added.
Traders have for months grown increasingly fearful that the hawkish tilt by the central bank will cause a recession, and policymakers have made clear they are willing to keep lifting even if that means hurting the economy.
Meanwhile, JPMorgan Chase said the United States would tip into a "mild" recession in 2023 owing to the rate increases, adding that it saw the Fed easing policy the following year in 2024."
Every time equity and bond markets are thinking the Fed is done and start taking off in a rally, the Fed gets out and starts talking that back down again," Cheryl Smith, of Trillium Asset Management, told Bloomberg Television.
In early trade, Hong Kong lost more than two percent, hit by profit-taking after a 14 percent surge between Friday and Tuesday, while there were also losses in Shanghai.
Still, observers said there were signs of optimism in Chinese markets after Beijing moved to ease some of its strict Covid restrictions and provide much-needed help to the property sector.
Tokyo, Seoul, Taipei, Manila and Jakarta also fell, though Singapore, Sydney and Manila edged up.
The pound was down against the dollar as Britain prepares for what is expected to be a grim budget later in the day by finance minister Jeremy Hunt, who has flagged a jump in taxes and spending cuts.
The announcement comes a day after figures showed UK inflation spiked at 11.1 percent in October, the highest since 1981, as the country is hammered by a cost-of-living crisis.
16 November 15:46
Mediclinic's operating profits fall by double digits amid pressure in Switzerland and the Middle East.
Mediclinic, which operates hospitals in Switzerland, the Middle East and Southern Africa, reported an operating profit fall of double digits for its half-year to end-September, also opting not to pay a dividend, given it expects to delist from the JSE in the first quarter of 2023.
Adjusted operating profit fell 11% to £131 million (R2.7 billion) in the six months to end-September, Mediclinic reported on Wednesday. The firm said it took a hit from increased employee costs incurred due to Covid-19-related staff absenteeism, a general nurse shortage in Switzerland, as well additional headcount related to capacity expansion in the Middle East.
The group fared better in SA, where operating profit picked up 3% to £71 million, which it said reflected a pickup in client activity, while issues around Covid-19 are receding. The average length of stay was down 13.2% compared with the prior year period, reflecting the decrease in longer stay Covid-19 patients and a significant increase in day case admissions.
Mediclinic, which started in SA in 1983 but has its primary listing in London, opted not to declare a dividend, given its takeover agreement means that any dividend would allow its buyers to adjust their offer.
In August, Mediclinic and a consortium of shareholder Remgro and shipping company MSC reached agreement on a buyout offer that valued the firm at about R75 billion at the time, with only approval from SA regulators still outstanding. That offer represented a premium of 35% to its share price in late May, when the consortium made its first offer.
The firm warned on Wednesday that macro-economic uncertainty, inflationary pressures and the risk of further Covid-19 and -related disruptions to staffing and scheduling, will likely impact the previously anticipated sequential increase in patient activity in Switzerland and Middle East, and limit the group’s ability to fully offset incremental cost increases in the two divisions.
Mediclinic owns 74 hospitals, five subacute hospitals, three mental health facilities, 21 day case clinics and 23 outpatient clinics.
The firm had 17 hospitals in Switzerland at period end, 50 in southern Africa, and seven in the Middle East.
In addition, under management contract Mediclinic Middle East will open a 200-bed hospital in the Kingdom of Saudi Arabia in 2023.
Mediclinic's shares edged up by 0.12% to R101.61 in afternoon trade on Wednesday, and have risen by almost half so far in 2022.
16 November 11:13
Tiger Brands jumps 6% after releasing improved earnings forecast
Shares of consumer goods group Tiger Brands jumped as much as 6% on Wednesday, after the owner of brands including Oros and Koo said earnings could grow more than half in its 2022 year.
Earnings benefitted from higher revaluations of foreign currency balances at period close, better-than-anticipated final trading numbers and a higher contribution from associate income, the group said, with headline earnings per share expected to rise in a range of between 48% and 53% to end-September.
In September, the firm had guided earnings growth of between 35% and 45%, amid significantly improved underlying performance in the second half of the year, driven by recoveries in its snacks and treats division, Wheat Millbake and exports. In addition, good progress was made in realigning pricing to take into account the extraordinary cost pressures on soft commodities, ingredients, packaging and logistics, it said then.
The shares of the group, whose results are due on 2 December, rose as much as 6.1% to R200.53 in morning trade on Wednesday.
16 November 09:59
PPC warns of earnings fall amid both demand and cost pressures
SA's biggest cement maker PPC says it limited price increases in its half-year to end-September in a bid to support volumes, while surging input costs also added to pressure on its business, and prompting a fall in group earnings of almost a quarter.
Core profit in its key region of SA and Botswana fell 28.5% year on year to R368 million to end-September, the firm said in an update, but cash generation remained robust, and group net debt fell almost a third over the course of the period to R677 million.
PPC said it saw pressure on demand in SA's inland regions, but Rwanda and Zimbabwe fared better, although the latter requires hyperinflation related accounting adjustments.
Excluding Zimbabwe, group core profit fell 12% during the period, PPC said.
"To maintain volumes in the South African and Botswana cement markets, sales price increases were limited to 5% in the period under review," CEO Roland van Wijnen said in the update. "Key input costs, especially those related to fuel and energy, increased at double-digits in percentage terms. Whilst various cost mitigation initiatives are under way, these actions take time to implement, and for the period under review were not able to fully offset cost increases, resulting in [core profit] margin compression," he said.
Van Wijnen added, however, that the firm welcomed the awarding of large road contracts in SA, and also stood to benefit from state promises to increase infrastructure spending.
In morning trade on Wednesday PPC's shares were up 0.91% at R2.22, but have fallen by almost 60% over the past year.
16 November 07:10
Asian stocks swing as Ukraine fears offset inflation hopes
Asian stocks fluctuated Wednesday as another positive US inflation report that fanned hopes of a slowdown in the Federal Reserve's interest rate hike campaign was offset by fresh geopolitical concerns over Ukraine.
World markets have rallied since last week after data showed US consumer prices rose much less than expected in October, suggesting months of Fed monetary tightening was kicking in.
The news was followed Tuesday by a below-forecast reading on wholesale prices, providing extra room for the central bank to take its foot off the pedal when raising borrowing costs and possibly easing pressure on the economy.
The optimism has been further enhanced by China's pledge to provide much-needed support to the country's beleaguered property sector as well as ease some of the strict Covid-19 restrictions that have played a major role in dragging the economy down.
However, the positive mood that had flowed through markets was dealt a blow after Poland said a Russian-made missile had struck a village in the country's east, killing two people.
Warsaw put its military on alert and US President Joe Biden and other Western leaders met in an "emergency roundtable" Wednesday on the sidelines of the G20 summit in Indonesia.
The news sparked fears that if it was proved to be an attack on Poland, a NATO member, the nine-month war in Ukraine could escalate.
Biden told reporters that allies would support Poland in probing "exactly what happened" but that preliminary information showed it was probably not fired "from Russia".
The comments helped ease concern on trading floors, though profit-taking after three days of healthy gains also kept buyers in check.
Hong Kong, Shanghai, Wellington and Taipei were slightly higher, while Tokyo, Sydney, Seoul, Singapore, Manila and Jakarta dipped.
"Even if the missiles that crossed the Polish border were indeed deemed Russian and not Ukrainian anti-missile interceptors, the case would fall short of triggering an escalation at this point," said SPI Asset Management's Stephen Innes.
"Hence the markets are deferring to a wartime mistake, believing this to be a case of misfire."
Still, he added: "While the market is not in full risk-off mode while deferring to a wartime mistake, the risk of a NATO-Russia clash is growing and real."
On currency markets, the dollar also saw sharp swings against its peers in reaction to the news out of Poland, while oil slipped.
15 November 17:15
Tongaat gets nod from lenders for extension of business rescue plan
The business rescue practitioners of distressed sugar producer Tongaat Hulett said on Tuesday the majority of lenders had agreed to extend the date for the publication of its rescue plan to the end of January.
The extension, about two months, also comes Tongaat has also secured the advancement of initial amounts of post commencement financing, which has facilitated payments of salaries and certain critical suppliers and creditors, Tongaat said in a business rescue update.
This financing is still subject to "the perfection of the general notarial bonds registered in favour of the lenders," the statement read, with this referring to the identification of assets that will form as security for the creditors.
Tongaat had entered into business rescue, a form of bankruptcy protection, in late October, and the fate of a firm which produces over 40% of SA's sugar has raised serious concern the livelihoods of tens of thousands of people as well as thousands of small and large firms that rely on the firm.
15 November 16:37
Equites to develop R1.2bn logistics warehouse for Shoprite in Ekurhuleni
Equites Property Fund said on Tuesday Shoprite has appointed it to develop a R1.24 billion logistics warehouse facility in Ekurhuleni, increasing its exposure to Africa's largest food retailer, which already accounts for over a fifth of its property revenue.
Equites will develop the 92 791m2 warehouse facility and has also concluded an initial 20-year triple net lease agreement, which means the tenant pays maintenance costs, taxes and insurance costs in addition to rent. The lease is expected to comment at the beginning of July 2024.
"The developed property will exhibit the characteristics which are expected of a state-of-the-art distribution facility suitable for a multinational or national occupier, which includes strong sustainability elements," Equites said.
Shoprite and Equites had formed a R4.1 billion joint venture in 2020 in which the retailer contributed R2 billion in distribution warehouses and land, and Equites put in R2.1 billion cash, to form as a platform for development.
Equities has 50.1% of the venture, and revenue from Shoprite accounted for 22.4% of its R1.5 billion in property revenue in its year to end-February.
Shares of the property firm were down 1.7% to R16.19 in afternoon trade on Tuesday, having fallen almost 30% so far in 2022.
15 November 10:48
Mantengu Mining announces plan for R15m rights offer
Mantengu Mining, which had spent years as a cash shell called Mine Restoration Investments, has announced plans for a R15 million rights issue, which is already fully underwritten by a number of parties.
In June, MRI shareholders approved a R551 million reverse takeover that gave the entity an operating asset, the Langpan chrome asset in Limpopo, which also produces platinum group metals (PGM) as a byproduct. This saw existing shareholders heavily diluted, but the firm said earlier in 2022 part of the takeover entails giving them a chance to participate in a discounted rights issue, the circular of which is now due to be released on 21 November.
Langpan owns the plant, infrastructure and controls the chrome and PGM mineral rights on the farm Langpan, with the mine approximately 17km south of Thabazimbi and share borders with the adjacent mines of Cronimet, Anglo and Samancor, the group says.
The asset has a chrome and PGM reserve statement of 2.17 million tonnes and a valuation of R851 million.
15 November 10:17
Renergen rises as it reports resumption of gas production
Emerging energy and helium producer Renergen says it has completed repairs to its Virginia plant in the Free State and is already producing liquified natural gas (LNG), expecting commercial deliveries to its customers to commence later this week.
The latest delay at Virginia, caused by a faulty conduction oil system, had prompted some concerns among investors and pressure on Renergen's share price. In morning trade on Tuesday the firm's shares were up 1.4% to R28.24, though it is still down more than a fifth over the past six months.
Having stumbled upon one of the richest helium resources ever recorded, Renergen, which is listed on the JSE and Australian Securities Exchange, will become one of only eight producers globally of the rare and valuable gas.
The group said on Tuesday since the repair work was undertaken, the system has been thoroughly tested. The operations team will now focus on the remaining modules to allow the helium liquefaction module to be turned on.
“The helium separation and recovery module is providing high-levels of confidence with recovery exceeding design parameters,” it said.
15 November 07:52
Asian markets rise further as China moves provide support
Asian markets rose Tuesday as investors brushed off a reverse on Wall Street and focused on signs of slowing inflation and China's moves to shore up its economy.
A largely positive meeting between US President Joe Biden and Chinese counterpart Xi Jinping indicated an easing of tensions between the powers and added to the upbeat mood on trading floors.
Still, there remains a lot of trepidation that central bank interest rate hikes aimed at taming inflation will eventually send economies into a recession.
And since Thursday's forecast-beating consumer prices data, Federal Reserve officials have warned there were more increases in the pipeline, though they are not expected to be as big as the previous four rises, of 75 basis points.
The latest was vice chair Lael Brainard, who said that while it would probably be right to slow down the rate hikes, "we have additional work to do both on raising rates and sustaining restraint to bring inflation down".
The comments, along with profit-taking, helped push Wall Street's three main indexes into the red and pushed the dollar up against its peers, having tumbled last week.
Stephen Innes at SPI Asset Management said: "With US growth yet to fall off a cliff, make no mistake, inflation is still at the fulcrum of market expectations as board members continue to push back a bit on market pricing."
However, Asian traders were a little more upbeat, cheered by China's move to ease some of its strict Covid-19 restrictions and provide much-needed support to its beleaguered property sector.
Hong Kong rose more than two percent and Shanghai was also in positive territory.
Tokyo, Singapore, Seoul, Mumbai, Manila, Taipei, Bangkok and Wellington were also up, but Sydney and Jakarta dipped.
Optimism for a thawing in relations between Washington and Beijing was boosted after Biden and Xi's extended talks on the sidelines of the G20 summit in Indonesia.
While there remain differences on hot-potato issues such as Taiwan, the two did find common ground on the Ukraine conflict, climate and the need to avoid another Cold War.
After the talks, Chinese Foreign Minister Wang Yi described it as a "new starting point", adding that Beijing hoped "to stop the tumbling of bilateral ties and to stabilise the relationship".
After a painful year for markets across the planet, dealers are hopeful that there is finally light at the end of the tunnel.
"It's certainly a time to be thinking about a recovery regime unfolding for markets," said Kristina Hooper of Invesco.
"But it's going to take a little time before we know if this really is something of a turning point for inflation and the Fed can be a lot more comfortable about hastening the end of tightening," she told Bloomberg Radio.
14 November 16:46
Sephaku reports profit jump, but says concrete demand has normalised.
Small cap building materials group Sephaku Holdings has reported profit growth of half for its six months to end-September, saying it was pleased with how it pursued higher prices and volumes, although it did feel some pressure from lower demand from retail customers.
Group profit jumped 50% to R26.7 million the six months to end-September, the firm said on Monday, but rising inflation and interest rates was weighing on retail customers, with cement demand now having normalised after spiking in the wake of Covid-19.
Sephaku, valued at R295.5 million on the JSE, owns concrete supplier Métier, while it also has a 36% stake in Sephaku Cement (SepCem), the rest of which is owned by Nigerian giant Dangote.
Métier’s net profit after tax increased by 47% to R29.5 million, benefiting from both successful cost controls and a 16% rise in volumes, but SepCem's equity-accounted profits rose 36% to R3.8 million, though volumes fell 10%. The firm also saw a slight dip in investment income, and climb in finance costs.
Métier had performed "exceptionally well" said CEO Neil Crafford-Lazarus in the results.
"Unfortunately, the same cannot be said for SepCem, whose major market predominantly consists of retail customers who purchase bagged cement from building materials merchants," he said.
"As reflected by the Stats SA data on hardware retail sales and feedback from the merchants, the demand for building materials has been declining for close to a year. This decrease is largely considered the normalisation of demand following the spike experienced during the Covid-19 pandemic. The interest rate increase cycle from the second half of calendar year 2021 to date and price increases in essential goods have significantly contributed to the decrease in retail demand."
In afternoon trade on Monday SepHold's shares were down 3.45% at R1.12, having fallen almost 40% so far in 2022.
14 November 13:24
Barloworld slips after trading update
Shares of diversified industrial group Barloworld slipped on Monday, after it flagged a basic earnings loss for its year to end-September.
Basic earnings per share are expected to fall in a range of between 22% to 26%, the firm said in an update, but headline earnings per share, which excludes various one-off items, is expected to rise by between 47% and 55%.
The firm didn't go into details, but in early afternoon trade its shares were down 6.24% to R103.60, having now fallen almost a third in the year to date.
No further information was provided. In the group's update for the eleven months to end-August, it reported a 20% increase in revenue from its equipment business in southern Africa and a 36% increase from Ingrain.
But it also confirmed that its order book for Russia was slashed following the invasion of Ukraine. The company is expected to confirm whether it will list its car rental business when it announces its results, on 21 November.
The group supplies equipment to various industries and operates the car rental group Avis Budget in southern Africa and Ingrain division, which is sugar producer Tongaat Hulett's former starch business.
Barloworld operates in 16 countries, including in Russia, where it is the official Caterpillar equipment dealer.
Barloworld sold its car dealerships to NMI Durban South
Motors in an R1 billion deal last year.
14 November 12:57
Omnia slumps after reporting hit from Zimbabwe
Shares of chemicals and explosive group Omnia slumped on Monday, after it released an update in which it said it was pleased with its performance, although it has taken a hit from accounting effects related to Zimbabwe.
The firm’s Zimbabwe business is expected to report a loss after tax of R172 million for the six months to end September, the group said in an update, widening from R29 million previously, which follows pressure on the Zimbabwean dollar after a change in monetary policy in the country.
This resulted in foreign exchange movements, the majority of which were unrealised.
Adjusted headline earnings from continuing operations, which excludes Zimbabwe, are however expected to increase by between 26% and 36%.
“Notwithstanding this challenging operating environment, an improvement in the group’s overall volume-margin mix and supportive commodity prices have been key positive contributing factors to the strong financial results for HY2023,” Omnia said.
In early afternoon trade Omnia’s shares were down 7.11% at R68.22, having risen 6.66% so far in 2022.
14 November 12:35
RFG lifts after flagging jump in earnings
Shares of food manufacturer RFG lifted on Monday after it flagged a rise in earnings of more than half for its year to 2 October, amid robust export volumes as well as a boost from its acquisition of the Today pie business in 2021.
Headline earnings are expected to be at least 54% and 59% higher than the prior year’s R230 million, amid strong demand for canned fruit and fruit puree products internationally, while it described its sales performance in a tough environment as “resilient.”
RFG had announced the acquisition of Pioneer Food’s frozen foods business in 2021, which included brands Today and Man’s Meal, reporting one-off costs of R25.7 million for the period related to this transaction.
The firm also received an insurance settlement of R43.4 million for loss of profits during the Covid-19 lockdown.
In early afternoon trade RFG’s shares only up 0.1% to R10.51, but earlier it had gained as much as 4.7%.
14 November 10:56
Telkom slumps almost 7% after flagging halving of profits
Shares Telkom, SA's third largest mobile operator, slumped on Monday morning, after it warned earnings would about halve in its half-year to end-September, hit by a litany of issues including load shedding and upfront payments for handsets.
Headline earnings per share are expected to decrease by between 45% and 55% to end-September, the partly state-owned firm said, mainly due to an upfront spend related to mobile handsets.
Given the upfront cost of a spend on handsets and related products, while revenue will only be recognised later, these costs jumped 30%, the mobile operator said, while it also had to account for higher back-up energy costs as it battled with load shedding.
This affected maintenance and service costs.
Shares of Telkom, whose results are expected to be released on 23 November, were down 6.35% at R33.62 in early trade, having lost more than a third so far in 2022.
14 November 10:52
Okiep pre-development funds unlocked as IDC acquisition is completed
The Industrial Development Corporation's acquisition of shares in Orion Minerals' new Okiep Mining Company has been completed swiftly, allowing for pre-development funding for project to now flow.
The deal has seen the IDC has become a 43.75% shareholder the mine alongside Orion, which holds the remaining 56.25% of the shares.
This, Orion said on Monday, marks a major step towards the re-establishment of mining operations as the IDC will now advance its pro rata share of R79 million in pre-development operating costs.
Orion has already advanced its entire pro rata share of R44 million.
“We are very pleased with the swift progress that has been made in completing our NOM deal with the IDC," said Orion CEO Errol Smart in a statement.
"We have signed definitive agreements, met all conditions precedent and have issued the draw-down notice for funding – all in less than two months after signing non-binding term sheets with the IDC," he said.
14 November 07:19
Most Asian markets extend global rally on China hopes
Asian markets mostly rose Monday, extending a global surge, as a loosening of China's Covid rules and plans to help its property sector followed a drop in US inflation that eased rate hike fears.
Equities rocketed last week and the dollar sank after data showed US price rises eased in October, providing the Federal Reserve with room to take its foot off the pedal in tightening monetary policy.
The news led some commentators to suggest a feared recession in the world's top economy could be shallower than first feared, or might be averted entirely.
The optimistic mood was given an extra injection late Friday by news that Beijing would relax some of its strict Covid-19 restrictions, a day after officials vowed to stick to their zero-tolerance strategy that has hammered growth.
Authorities have also reportedly unveiled a 16-point plan to support the beleaguered property sector, a major component of the country's sprawling economy.
The industry has come under immense pressure since China imposed a number of restrictions in 2020 aimed at reeling in debt, with major developers teetering on the brink of collapse.
The news indicates the leadership is beginning to focus on supporting the economy, a crucial driver of global growth.
"It's a meaningful easing," said Larry Hu of Macquarie Group.
"It seems that the room for policy change has widened on various fronts after the Party Congress (last month), including for the two major headwinds to the Chinese economy: Covid Zero and property.
"Nomura's Lu Ting said the support for the developers was "the most crucial pivot since Beijing significantly tightened financing of the property sector".
"We believe these measures demonstrate that Beijing is willing to reverse most of its financial tightening measures," he added.
"Those cash-strapped developers (especially private ones), construction companies, mortgage borrowers and other related stakeholders can now breathe a sigh of relief."
He warned, however, that the sector continued to struggle and the "measures may have little direct impact on stimulating home purchases".
In early trade, Hong Kong led gains again -- having soared more than seven percent Friday -- with property firms the best performers.
Shanghai, Sydney, Singapore, Seoul, Taipei and Manila were all well up, though Tokyo was hit by profit-taking. There were also small losses in Bangkok, Jakarta and Wellington.
While the mood has lightened after the US inflation read, there is still a sense of trepidation among traders who fear the Federal Reserve will continue to lift borrowing costs while analysts warn last week's rally may have been overdone.
"It was always clear that it would be easy to bring inflation down from 9-10 percent to 4-5 percent," said SPI Asset Management's Stephen Innes.
"Pushing it back to two percent could be much more complicated and require higher rates for longer. Hence, the central bank fight is far from over. But for now and until an indication of inflation proves stickier than expected, risk-on could roll on a bit further."
Still, the yen, pound and euro held most of their gains against the dollar, which came in reaction to the consumer price index reading.
Traders are keenly awaiting a meeting later in the day between US President Joe Biden and Chinese counterpart Xi Jinping, with hopes for an easing of tensions between the superpowers.
The two are due to meet at the G20 summit in Bali, with Biden saying he wanted to repair lines of communication and help establish "guardrails" to keep the competing superpowers from veering into conflict.