Daily Market Overview 17 September 2021

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Local Market Update

– Indexes on the Johannesburg Stock Exchange lost heavily on Thursday, pulled down by mining
companies which fell on the back of drop in commodity prices, especially of platinum group metals
and gold. The retreat in commodity prices in the last two months have instilled fears that a bull run
in the shares of mining companies, which are an important export revenues earner, is coming to
an end. This in turn impacts the outlook on the local economy. The benchmark all-share index
dropped 1.66% to end the day’s trading at 63,314 points. The blue-chip Top 40 index fell by 1.94%
to 57,098 points. The index is now where it was at the beginning of the year and has lost almost
10% in the last one month.

– The rand fell to more than two-week lows on Thursday as the dollar jumped on a surprise rebound
in U.S. retail sales, extending this week’s rand losses to more than 2%. At the close, the rand was
trading around R14.60 to the dollar, or 1.35% weaker.

– Gold prices were set for a second weekly loss as a firmer dollar dented the metal’s allure for
holders of other currencies while investors await a key U.S. Federal Reserve meeting for clues on
how soon the central bank will start to taper stimulus. Oil prices barely moved this morning even
as more supply came back online in the U.S. Gulf of Mexico following two hurricanes, with
benchmark contracts on track to post weekly gains of around 4% as the output recovery is seen
lagging demand.

In Local news

Record earnings set FirstRand on recovery path
FirstRand, Africa’s biggest bank by market value, expects to achieve “peak earnings” ahead of its
original target after reaching its highest-ever results for a half-year period through June. “The group
previously indicated that it expected to reach peak earnings during the 2023 financial year,” the
Johannesburg-based lender said in a statement on Thursday. The lender grew pre-provision
operating profit by 5% in the 12 months ending in June, it said. Profit after tax grew 48% to 28.1
billion rand ($1.9 billion) as South Africa’s economy shows signs of recovery. The firm will distribute
a dividend for the period representing a 56% payout, it said.

Sasria to pay out almost R600m to Reit hard hit by riots
JSE-listed real estate investment trust (Reit) SA Corporate Real Estate reported on Thursday that the
South African Special Risk Insurance Association (Sasria) has accepted its R558.2 million insurance
claim for extensive damage to its properties, as a result of the unrest seen in parts of the country
in July. In a Sens update released in July the group estimated that total damages, including loss of
income, would amount to R558.243 million. The Sasria payout will cover the group’s entire claim.
Damage to the group’s shopping centres in KwaZulu-Natal account for the majority of its claim.

International Market Update

– European stocks finished higher on Thursday, as global investors kept an eye on economic data
and central banks. The pan-European Stoxx 600 index rose 0.5% by the close, with travel and
leisure stocks adding 3% to lead the gains. Basic resources bucked the trend, slipping 2.5%. In
other news, German Finance Minister Olaf Scholz will face questions from lawmakers next Monday
over suspected failings at the federal anti-money laundering agency. The interrogation will take
place days before the country’s elections in which Scholz is favourite to succeed Chancellor Angela
Merkel with his Social Democratic Party leading in the polls.

– The Dow Jones Industrial Average climbed back from intraday lows, but closed down Thursday
ahead of a seasonally weak period of trading in September. August retail sales surprised the
market and rose 0.7% from the month prior, the Census Bureau reported Thursday. Economists
surveyed by Dow Jones expected a 0.8% month-over-month decline. Meanwhile, the latest
unemployment insurance weekly data showed 332,000 first-time jobless claims last week.
Economists polled by Dow Jones expected a total of 320,000 initial claims.

– Shares in Asia-Pacific were mixed in early morning trade, with stocks in Hong Kong continuing to
see further losses. The benchmark Hang Seng index in Hong Kong slipped 0.93%, adding to losses
seen earlier in the week

In International news

China’s embattled developer Evergrande is on the brink of default
Chinese property giant Evergrande is on the brink of collapse, and analysts warn the potential
fallout could have far-reaching implications that spill outside China’s borders. After expanding
rapidly for years and snapping up assets as China’s economy boomed, Evergrande is now snowed
under a crushing debt of $300 billion. The world’s most indebted property developer has been
scrambling to pay its suppliers, and warned investors twice in as many weeks that it could default
on its debts

Ford adds jobs to increase production of electric F-150 pickup
Ford Motor is expanding hiring to increase production capacity for its all-electric F-150 Lightning
pickup as it begins building prototypes of the electric vehicle. The Detroit automaker said Thursday
that it plans to invest an additional $250 million and add 450 jobs across three Michigan facilities
— including the Rouge Electric Vehicle Center, which is building the truck — to double annual
production capacity for the vehicle to 80,000 units.