Daily Market Overview 23 September 2021

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Local Market Update

– Johannesburg-listed stocks were also boosted by the Evergrande developments. The Johannesburg
Stock Exchange’s All-share index closed up 1.6% at 63,353 points while the Top-40 index gained
1.5% to 56,938 points. Data on Wednesday showed annual consumer inflation quickened to 4.9%
in August from 4.6% in July, slightly ahead of forecasts for a 4.8% increase, though the market
showed little reaction to the latest figures.

– The rand strengthened on Wednesday, as an easing of market jitters over Chinese property
developer Evergrande lifted risk-sensitive currencies worldwide. At the close of the session, the
rand was trading around R14.81 to the dollar, 0.18% firmer.

– Gold prices dipped this morning after the U.S. Federal Reserve signalled easing its monthly bond
purchases by next year and a sooner-than-expected interest rate hike, which could increase the
opportunity cost of holding the non-yielding bullion. Oil prices rose earlier today, extending strong
gains overnight with fuel demand growing and crude stocks declining as production remains
hampered in the U.S. Gulf of Mexico after two hurricanes

In Local news

Telkom’s Openserve is next up for a JSE listing
Telkom’s sprawling wholesale division, Openserve, is likely to be the next unit of the
telecommunications group to be listed on the JSE. That’s according to Telkom group CEO Sipho
Maseko, who was speaking to TechCentral in an interview on Tuesday following the announcement
that the group plans to list its masts and towers business, Swiftnet, on the Johannesburg bourse
soon to unlock shareholder value. Once the Swiftnet listing is concluded, it’s very likely, Maseko
said, that Openserve will follow with a JSE listing of its own, also designed to unlock trapped value.

SAA takes to the skies after being grounded for 544 days
South African Airways (SAA) is back in business. Thursday morning sees the slimmed-down airline
operate its first flight – from Johannesburg to Cape Town – after the airline was grounded in March
last year. The airline resumes operations as a shadow of its former self, operating just six aircraft –
down from 46 in its heyday. SAA CFO Fikile Mhlontlo said in a media briefing on Wednesday that
South Africans can lay their fears of travelling in old aircraft to rest, as the airline has signed new
leases that come with new aircraft.

International Market Update

– European stocks closed higher on Wednesday as tensions eased over embattled Chinese property
developer Evergrande and global investors awaited the outcome of the latest meeting of the U.S.
Federal Reserve. The pan-European Stoxx 600 index provisionally closed up 1%, with banks leading
the gains to rise 3.1% as most sectors and major bourses ended the session in positive territory.

– U.S. stocks rallied on Wednesday after the Federal Reserve indicated it doesn’t see an imminent
rollback of the monetary stimulus that has been supporting the economy throughout the
pandemic. The Fed did not give a specific timeline on when it may begin moderating its purchases.
“If progress continues broadly as expected, the Committee judges that a moderation in the pace of
asset purchases may soon be warranted,” the Fed’s post-meeting statement said. The central bank
has been buying $120 billion a month of Treasury and mortgage-backed securities since the start
of the Covid crisis.

– Shares in Asia-Pacific were mostly higher in early morning trade today as investors in Asia-Pacific
continue monitoring the situation surrounding China Evergrande Group. Hong Kong’s Hang Seng
index jumped 1.02% after losses earlier in the week. It had returned to trade after a holiday on
Wednesday.

In International news

Evergrande: Crisis-hit firm strikes China debt deal
The main property unit of Chinese real estate giant Evergrande has said it has struck a deal over a
bond interest payment which is due on Thursday. The amount due for the domestic bond is
estimated to be $35.9m (£26.3m). The announcement will offer some relief to investors concerned
over the company’s debt crisis. However, the world’s most indebted developer is also due to make
a $83.5m interest payment on an overseas bond on Thursday.

Vauxhall Motors plans Luton job losses amid chip crisis
Hundreds of jobs are at risk at Vauxhall’s van plant, due to a global shortage of microchips. A letter,
seen by the BBC, which was sent to staff at the Luton works, said more than 200 jobs could go at
that site which produces the Vivaro van. Vauxhall said it is consulting with staff and unions over a
temporary reduction of shifts from three to two. The Unite union said it would “do everything in
our power to mitigate or prevent” job losses.