Daily Market Overview 21 September 2021

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Local Market Update

– Local stocks traded lower yesterday, as the JSE All Share index posted a 2.24% loss. The negative
close was the third straight daily loss. The blue-chip Top 40 index closed out the day 2.4% lower,
dragged down mostly by industrials and resources. Local investors will focus on the Consumer
Price Index (CPI) numbers on Sept. 22 and the U.S. Federal Reserve’s policy meeting, due to end on
Wednesday, for indications on when it will start tapering its bond purchase programme.

– The rand weakened on Monday, tracking other risk and commodity currencies, as concerns about
property group China Evergrande’s solvency stoked risk aversion, while traders awaited the
outcome of this week’s U.S. Federal Reserve policy meeting. At the close of the session, the rand
was trading around R14.79 to the dollar, 0.25% weaker.

– Gold prices were flat this morning as investors adopted a risk-averse stance amid caution ahead of
U.S. Federal Reserve’s policy meeting where the central bank is expected to provide cues on when
it will begin tapering its asset purchases. Oil prices rose earlier today as analysts pointed to signs of
U.S. supply tightness, ending days of losses as global markets remain haunted by the potential
impact on China’s economy of a crisis at heavily indebted property group China Evergrande.

In Local news

Caxton makes strong profit recovery
JSE-listed Caxton & CTP Publishers, Printers and Distributors has made a strong recovery to profit
but warned that it is impossible to predict the time period within which the turnover of its different
operations will fully recover from the impact of the Covid-19 pandemic. Profit before depreciation
and amortisation increased by 61% to R563.9 million from R350.3 million, with profit for the year
improving to R565.92 million from the R64.06 million loss in the prior year.

RMI to unbundle Discovery and Momentum Metropolitan
Rand Merchant Investment Holdings (RMI) will unbundle its large stakes in both Discovery and
Momentum Metropolitan in a move it believes “will unlock material shareholder value”. This will
leave it with two core assets: its 89% of OUTsurance and 30% of the UK’s Hastings. The problem
facing RMI – like most investment holding companies – is the stark discount between what the
market values the business at and its underlying intrinsic value. The group will unbundle those
holdings in Discovery and Momentum Metropolitan to existing RMI shareholders during 2022. Both
of these are historic shareholdings which date back to RMH in the early 1990s.

International Market Update

– European stocks closed sharply lower on Monday as market sentiment was shaken by fears
surrounding embattled property developer China Evergrande Group. The pan-European Stoxx 600
index ended the session down by 1.7% provisionally. European banking stocks tanked 4.1% on
average, posting their worst session so far this year. Among major bourses, the German Dax was
down around 2.3%.

– U.S. stocks began the week deeply in the red as investors continued to flock to the sidelines in
September amid several emerging risks for the market. Stocks linked to global growth led the
broad-based sell-off Monday. The Federal Reserve begins a two-day meeting today and investors
are worried the central bank will signal it’s ready to start pulling away monetary stimulus amid
surging inflation and improvement in the job market.

– Shares in Asia-Pacific declined in early morning trade as investors continue to monitor the situation
surrounding embattled developer China Evergrande Group. Hong Kong’s Hang Seng index, which
was dragged down by more than 3% on Monday amid investor fears around Evergrande, fell
fractionally in Tuesday morning trade

In International news

GM to begin fixing Chevy Bolt Evs
General Motors announced Monday that it expects to begin replacing battery modules in Chevrolet
Bolt EVs, which were recalled due to fire risk, as soon as next month. The timing comes after the
automaker’s battery supplier LG Chem restarted production of battery cells with updated
manufacturing processes at plants in Michigan, GM said. Cell production went down last month
following two rare manufacturing issues forcing GM to recall more than 140,000 EVs due to risk of
the batteries spontaneously catching fire

Peloton looks to commercial customers like hotel chains for new growth
Peloton is looking beyond the home for its next stage of growth. The company announced Monday
it has created a single platform from which hospitality industry customers can buy both its
connected fitness equipment and Precor products online. After leveraging demand from
consumers forced inside by the coronavirus pandemic, Peloton aims to capitalize on a reopening
economy.