Daily Market Overview 13 September 2021

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Local Market Update

– Stocks listed on the Johannesburg Stock Exchange ended Friday marginally stronger but with a heavy loss seen during the week on the back of losses suffered by index heavyweights Naspers and mining companies. The country’s biggest company, tech investor Naspers, and its subsidiary Prosus, corrected sharply this week as China continued to clamp down through regulations on internet and gaming companies including Tencent. The benchmark All-Share index ended the day up 0.19% but was down over 3% from last Friday. The blue-chip Top 40 index closed up 0.27%.

– The rand posted its third consecutive week of gains on Friday, scaling back to a level seen two months ago as stronger local data and a risk-on mood globally supported the currency against the dollar. At the close, the rand was trading around R14.21 versus the dollar, 0.09% softer on the day.

– Gold prices were subdued this morning as the dollar held firm, while cautious investors awaited readings on U.S. consumer prices due this week that could be crucial to Federal Reserve’s decision on when to exit its super-supportive policy. Oil prices climbed earlier today to a one-week high in a second straight session of gains as concerns over U.S. supplies following damage from Hurricane Ida supported the market, along with expectations for higher demand.

In Local news

City Lodge losses widen but CEO hopes worst of the pandemic is over
JSE-listed City Lodge Hotel Group is anticipating some easing of the severe Covid-19 storm the hotel and hospitality industry has been buffeted by over the past about 18 months. City Lodge CEO Andrew Widegger said on Friday the group remains cautiously optimistic that the worst of the pandemic is behind the group because an encouraging portion of the South African population has been vaccinated and “very soon we can all once again embrace the freedom of travel and hospitality”.

Steinhoff inches closer to settling lawsuits after gaining more support
South African retailer Steinhoff International said on Friday it had gained more approval from claimants for its proposed lawsuit settlement offer to those who lost money when it revealed holes in its accounts in December 2017. The proposal gained the final vote from contractual claimants – those who sold their businesses to Steinhoff in consideration for shares in the retail group – to move the group closer to finalising a deal that has been a major headache since the company’s restructuring.

International Market Update

– European stock markets closed lower on Friday, reversing earlier gains, as traders weighed concerns over rising inflation and central bank action. The pan-European Stoxx 600 closed down 0.3%, after having climbed earlier in the day. The benchmark also finished the week in the red, falling 1.2%. Utilities shares led the losses Friday, down 1.3%.

– The Dow Jones Industrial Average declined for a fifth straight day Friday as economic uncertainty loomed. Apple was the biggest laggard weighing on the Dow, down 3.3%. The tech giant can no longer force developers to use in-app purchasing, a federal judge ruled Friday in a closely watched trial between Apple and Epic Games. The S&P 500 and the Dow haven’t recovered since the poor jobs report last Friday, falling each day since, including all four trading days of the holiday-shortened week.

– Shares in Asia-Pacific largely slipped in early morning trade today, with stocks in Hong Kong leading losses. Hong Kong-listed shares of Alibaba dropped 3.04% following a Financial Times report that Beijing wants to break up Ant Group’s Alipay and force the creation of a separate loans app.

In International news

GM doubles chip shortage impact to 200,000 vehicles in second half of year
General Motors’ vehicle sales and production will be hit harder by the global chip shortage during the second half of the year than it previously expected, its finance chief said Friday. The shortage will cut GM’s wholesale deliveries by about 200,000 vehicles in North America during the second half of the year compared with the 1.1 million it delivered in the first half of the year, CFO Paul Jacobson said. That reduction is double the 100,000 units that was expected when GM reported second-quarter earnings in August.

Apple can no longer force developers to use in-app purchasing
Apple’s lucrative App Store business received a major blow Friday thanks to a federal judge’s decision in the company’s legal battle with Epic Games. Judge Yvonne Gonzalez Rogers handed down the decision in the closely watched trial, and issued an injunction that said Apple will no longer be allowed to prohibit developers from providing links or other communications that direct users away from Apple in-app purchasing. Apple typically takes a 15% to 30% cut of gross sales.