Daily Market Overview 10 September 2021

We are proud to share our Daily Market Overview with you, ensuring that you do not miss out on any information.

Local Market Update

– Tech investor giants Naspers and its unit Prosus slumped 7.82% and 6.30% respectively after online gaming chiefs, including Tencent Holdings 0700.HK, were summoned by Chinese authorities to check they are sticking to strict new rules for the sector. Prosus holds close to 29% of Tencent. Overall, the Johannesburg All-share index fell 2.06% while the Top 40 index declined 2.29%.

– The rand strengthened slightly on Thursday thanks to current account data recording its largest surplus ever in the second quarter, while stocks were hammered as investors exited tech companies after China’s government summoned gaming firms. At the close of the session, the rand was trading around R14.20 to the dollar or 0.01% softer.

– Gold prices were steady this morning, caught between a pullback in the dollar and growing uncertainty over the U.S. Federal Reserve’s timeline to start tapering stimulus, with the precious metal heading to record a weekly decline. Oil prices dipped earlier today, heading for weekly losses of nearly 2%, after China announced it would release oil from it strategic reserve and some U.S. airlines, key to a recovery in jet fuel demand, warned of a slowdown in ticket sales

In Local news

Sanlam exits UK businesses to sharpen focus
Sanlam is planning to exit several of its UK-based operations, including its life insurance and wealth management units, in order to free up capital for its expansion in various African markets and in India. Africa’s largest insurer is buying a further stake in Morocco-based Saham Assurance SA for about R2 billion ($141 million) to boost its presence on the continent, where it already operates in over 30 countries. “We will maintain an asset management business in the UK,” chief executive officer Paul Hanratty said by phone.

Woolworths expands online shopping service to Mauritius
Woolworths has announced the launch of its online shopping platform to shoppers in Mauritius, making it the first South African retailer to launch an online shopping platform in the country. In a statement on Thursday, Woolworths said Mauritian shoppers will have access to over 30 000 of its fashion, beauty and homeware items. The retailer currently has six stores on the island, but the new service will be supported from its Bagatelle Mall store in the Moka district, which has a wider variety of products.

International Market Update

– European stocks closed mixed on Thursday as investors in the region reacted to announcements from the European Central Bank. The pan-European Stoxx 600 ended the session barely below the flatline, having fallen as much as 0.8% earlier in the day. Industrials added 0.6% while basic resources slumped 0.8%. The European Central Bank kept its monetary policy unchanged on Thursday but opted to slow down the pace of net asset purchases under its pandemic emergency purchase program.

– The Dow Jones Industrial Average fell more than 150 points on Thursday, the 30-stock average’s fourth day of losses. Investors remained cautious as they try to discern what’s next to happen with the delta variant, the economic reopening and the Federal Reserve. Several airlines on Thursday lowered their forecasts because of the resurgence in Covid. United Airlines, American Airlines and Southwest Airlines each gave cautious comments.

– Shares in Asia-Pacific edged higher in early morning trade today, as investors monitored Hong Kong-listed stocks of firms in regulation-hit sectors such as video games. Shares of Tencent in Hong Kong jumped 2.33% while Netease gained 3.96% — a partial recovery after the heavy losses seen Thursday.

In International news

Wells Fargo hit with another fine
Wells Fargo was hit with a $250 million fine from a banking regulator after it failed to properly execute a mortgage loss mitigation program. The Office of the Comptroller of the Currency said Thursday that the bank engaged in “unsafe or unsound practices” tied to its loan modification program and violated the terms of a 2018 consent order that was critical of its risk management systems. In its own release, Wells Fargo acknowledged the OCC’s regulatory action and said that a separate issue, a Consumer Financial Protection Bureau consent order from 2016, had expired. Shares of the bank climbed 1.6% on the news.

Ford to spend $2 billion to restructure operations and close plants in India
Ford Motor is ending vehicle production in India, shutting down its two large plants there and terminating thousands of employees, as CEO Jim Farley restructures the automaker’s operations as part of a turnaround plan. The company said Thursday the actions will cost about $2 billion, including pretax special charges of about $600 million in 2021 and $1.2 billion in 2022. About $300 million of the $2 billion will be non-cash charges, including accelerated depreciation and amortization, according to the company. About 4,000 people will lose their jobs due to the plans