Daily Market Overview 14 October 2021

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Local Market Update

– Local markets shrugged off disappointing domestic retail data that showed sales fell 1.3% year on year in August, whereas economists had forecast a rise of 2.6%. Stocks were flat, with the Johannesburg Stock Exchange’s Top-40 Index rising 0.03% to 59,517 points and the broader All- Share Index up 0.04% to 66,013 points. Precious metals miners were among the best performers of the day. Anglo American Platinum was the biggest winner on the blue-chip index, rising 3.34%, followed by AngloGold Ashanti and Gold Fields, up 3.16% and 2.81% respectively.

– The rand posted strong gains on Wednesday as the dollar retreated, gold prices rallied and local bonds advanced. At the close of the session, the rand was trading around R14.81 versus the dollar or 1.05% firmer.

– Gold prices hovered near a one-month peak earlier today as the dollar and longer-dated Treasury yields retreated from recent highs following hotter-than-expected U.S. inflation data. Oil prices rose today, reversing previous losses, on expectations that high natural gas prices as winter approaches may drive a switch to oil to meet heating demand needs. Prices were also supported by concerns about supply tightness after the U.S. Energy Information Administration (EIA) said on Wednesday that crude oil output in the United States, the world’s biggest producer, is going to decline in 2021 more than previously forecast thought it will bounce back in 2022.

In Local news

Liberty minorities approve Standard Bank’s buyout offer
Minority shareholders of JSE-listed insurance and financial services firm Liberty on Wednesday approved the proposal by major shareholder Standard Bank Group (SBG) to buy out their interests and to integrate Liberty fully into the banking giant. The endorsement was confirmed in a Sens statement and media release following a Liberty general meeting to vote on the proposal earlier in the day. “This represents a significant milestone towards finalising the proposed transaction, expected in the first quarter of 2022,” the group said.

Vantage Data Centers plans R15bn Joburg campus at Waterfall mega-development
US-based Vantage Data Centers on Wednesday revealed plans to invest $1 billion (R15 billion) in a massive new Joburg campus on a 12-hectare site in Waterfall, the mega property node in the middle of Gauteng being spearheaded by JSE-listed Attacq. Vantage, which is headquartered out of Denver, is a global data centre giant with several sites across the US, Europe and the Asia-Pacific region. Vantage noted that the “massive investment” will “bring new business and positive economic impacts” for the city, helping to “foster economic growth, stimulate job creation, and lead the way in energy‐efficient design”.

International Market Update

– European stocks closed higher on Wednesday as strong earnings offset concerns about global growth and inflation. The pan-European Stoxx 600 closed up 0.7%, having started the session in the red. Tech stocks bounced 2.6% to lead gains, while banks fell 1.6%. U.K. GDP was 6.9% higher in August than the same period last year, slightly outstripping a Reuters consensus forecast of 6.7%. The British economy is now 0.8% below its pre-Covid level, according to the Office for National Statistics.

– The S&P 500 snapped a three-day losing streak Wednesday as investors digested third-quarter earnings and insights into when the Fed might taper its asset-purchase program. Minutes released Wednesday afternoon from the Federal Open Market Committee’s September meeting
showed the central bank could begin tapering its asset-purchase program as soon as mid-November. The September consumer price index released Wednesday morning jumped 0.4% from the month prior and 5.4% year over year, according to the Labor Department. Economists
expected to see a month-to-month increase of 0.3% or annualized rate of 5.3%, according to Dow Jones.

– Asia-Pacific stocks were mostly higher as investors reacted to the release of China’s inflation data for September. Producer inflation surged in September; official data showed Thursday. The producer price index for September soared 10.7% as compared with a year ago, slightly above expectations in a Reuters poll for a 10.5% increase. China’s consumer price index also rose 0.7% in September as compared with a year ago.

In International news

JPMorgan exceeds profit expectations
JPMorgan Chase on Wednesday posted third-quarter results that exceeded expectations on a $1.5 billion boost from better-than-expected loan losses. The gain came after the bank released $2.1 billion in reserves and had $524 million of charge-offs in the quarter, New York-based JPMorgan said in a release. The bank produced $3.74 per share in earnings, which includes a 52 cent per share boost from reserve releases and a 19 cent per share benefit tied to a tax filing. The bank “delivered strong results as the economy continues to show good growth – despite the dampening effect of the Delta variant and supply chain disruptions,” CEO Jamie Dimon said in the statement.

WHO says global Covid deaths fell to lowest level in a year last week
Covid-19 deaths fell to their lowest level in almost a year last week at nearly 50,000 fatalities, World Health Organization Director-General Tedros Adhanom Ghebreyesus said Wednesday. Deaths from Covid are declining in every region except Europe, but vaccine inequities continue to plague much of the developing world. Tedros said 56 countries did not reach the WHO’s goal of vaccinating 10% of their populations against Covid by the end of September, adding that reported deaths have been highest in countries with the least access to the shots.