Daily Market Overview 28 September 2021

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Local Market Update

– Johannesburg-listed stocks were mixed on Monday. Financial shares, considered a barometer of local economic prospects, posted losses with a banking index down 0.73%. But a resources index rose 0.86%. The Johannesburg Stock Exchange’s All-share index closed up 0.23% at 64,197 points, while the Top-40 index ended up 0.25% at 57,784 points. The domestic focus this week is on economic data releases including August credit numbers, producer price inflation and trade figures, all due on Thursday.

– The rand ended stronger after a volatile day of trading on Monday, helped by receding fears of widespread market contagion from indebted Chinese developer Evergrande. At the close, the rand was trading around R14.95 to the dollar or 0.24% softer.

– Oil markets eased this morning after a five-day rally as investors took profits on fears that higher prices may weaken fuel demand, though market sentiment remained firm amid tight supply. Gold prices were lower today, hurt by a stronger dollar and rising U.S. Treasury yields, while investors awaited more cues from Federal Reserve officials on the central bank’s monetary policy shift.

In Local news

Tourism sector lost R164bn in spending by visitors in 2020
South Africa’s tourism sector lost an estimated R164 billion in spending by domestic and inbound visitors to the country in 2020 because of the Covid-19 pandemic. The Bureau for Economic Research (BER) at the University of Stellenbosch said on Monday the number of jobs supported by South Africa’s tourism industry declined by 960 000 to 640 000 in 2020 from 1.6 million in 2018 as spending by domestic and inbound visitors slumped to R109 billion in 2020 from R273 billion in 2018. It based the estimated expenditure by domestic and inbound visitors on the decline in visitor ratios and then applied it to 2018 tourist expenditure data, the most recent available data.

National Arts Council mismanaged R300m intended to support artists – report
A forensic investigation has revealed that three former and two current members of the National Arts Council (NAC) have been found guilty of ‘committing’ around R630 million in funds as part of Covid-19 financial support for artists, despite the Presidential Employment Stimulus Programme (Pesp) only allocating a budget of R300 million for the initiative. This was confirmed on Monday during a media briefing by Minister of Sport, Arts and Culture Nathi Mthethwa. Mthethwa now wants answers from the five unidentified NAC members implicated in the mismanagement of the funds that were earmarked to assist artists and boost the creative economy.

International Market Update

– European stocks closed mixed on Monday, with German election results seen eliminating a key market risk for investors in the region. The pan-European Stoxx 600 provisionally closed marginally lower, having given up gains of up to 0.7% earlier in the session. Oil and gas stocks jumped 2.8% while tech shares fell 1.4%. In Germany, preliminary results on Monday morning showed the center-left Social Democratic Party gaining the largest share of the vote with 25.7%. Angela Merkel’s right-leaning bloc of the Christian Democratic Union and Christian Social Union was seen with 24.1% of the vote.

– U.S. stocks were split on Monday as Treasury yields rose and traders braced for the final week of a volatile September. The 10-year Treasury yield increased on economic optimism and inflation fears, briefly topping 1.5% on Monday.

– Stocks in Asia-Pacific largely declined in early morning trade today, as various firms downgraded China’s GDP forecasts. Goldman Sachs slashed its China GDP growth expectations to 7.8%, down from the 8.2% previously forecast. South Korea’s Kospi slipped 0.81%. SK Innovation shares jumped nearly 2% after the firm announced a plan with Ford Motor to invest more than $11 billion in new U.S. facilities to produce electric vehicles and batteries.

In International news

TikTok says 1 billion people use the app each month
TikTok revealed Monday it has 1 billion active global users, indicating steady growth of the shortform video app. The service, which is privately held and owned by Chinese company ByteDance, has reported a surge in users over the past few years, with a large amount of its U.S. audience joining amid the Covid-19 pandemic. TikTok said it had about 55 million global users by January 2018. That number grew to more than 271 million by December 2018 and 507 million by December 2019. The company reported nearly 700 million monthly active users last summer.

Pfizer CEO Albert Bourla predicts normal life will return within a year
There will be a return to normal life within a year, Pfizer CEO and Chairman Albert Bourla said on Sunday, adding that it’s likely annual Covid vaccination shots will be necessary. “Within a year I think we will be able to come back to normal life,” Bourla said in an interview on ABC’s “This Week.”
Returning to normal life will have caveats, he said: “I don’t think that this means that the variants will not continue coming, and I don’t think that this means that we should be able to live our lives without having vaccinations,” Bourla said. “But that, again, remains to be seen.”