Daily Market Overview 3 September 2021

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Local Market Update

– On the Johannesburg bourse, stocks fell, with the All-Share index ending down 0.48% and the Top40 index down 0.42%. Leading the decliners was insurer Discovery, which dropped 7.80% after it scrapped its annual dividend again and said it may have to raise equity capital to cover costs linked to its investment in China’s Ping An. Miner Impala Platinum Holdings Ltd was another big faller, closing 6.86% weaker, as its annual headline earnings per share growth missed market expectations. Today, investors will look to a PMI survey for clues about the pace of South Africa’s economic recovery from the COVID-19 pandemic.

– The rand’s recent rally came to a halt on Thursday afternoon, as investors turned cautious ahead of a U.S. jobs report on Friday that could affect expectations over the path of the Federal Reserve’s policy. At the close, the rand was trading around the R14.64 mark versus the dollar, 0.33% weaker.

– Oil prices dipped this morning after posting strong overnight gains on a weaker dollar and a bigger-than-expected fall in U.S. crude stocks and were headed for small gains on the week ahead of a highly anticipated U.S. monthly jobs report. Gold prices eked out small gains earlier today, buoyed by a weaker dollar, with investors awaiting the U.S. jobs data to gauge the Federal Reserve’s plans to start tapering asset purchases.

In Local news

M&R expects 50% jump in revenue in its 2022 financial year
JSE-listed multinational engineering and construction company Murray & Roberts (M&R) expects its revenue for the year to June 2022 to “comfortably exceed R30 billion”. “That will be a 50% improvement on the revenue for the year to June 2021,” said M&R CEO Henry Laas on Thursday. Laas based this forecast on the 12% growth in the group’s order book to an all-time high of R60.7 billion at end-June 2021 from R54.2 billion in the prior year. “We are extremely excited about the R60.7 billion order book and more so because of the quality of this order book,” he said.

Santam ‘making headway’ in settling business interruption claims
Santam is making headway in settling business interruption claims originating from the Covid-19 pandemic, outgoing CEO Lizé Lambrechts said on Thursday following the release of the group’s halfyear results to end of June 2021. “A lot of progress has been made,” she told Moneyweb, adding that large amounts are involved and some of the claims are complex. According to Lambrechts, as at the end of August 2021, Santam had paid approximately R700 million in policyholder claims in addition to the R1 billion paid in interim relief to end August 2020.

International Market Update

– European stocks closed higher on Thursday as investors geared up for the next reading of U.S. nonfarm payrolls which is due Friday. The pan-European Stoxx 600 ended the session down by nearly 0.4% provisionally, with oil and gas stocks adding 2% to lead gains as most sectors and major bourses traded in positive territory. At the bottom of the European blue-chip index, British online trading firm IG Group tumbled 11%. Mining giant BHP slid 5.6% as it traded ex-dividend.

– The S&P 500 and the Nasdaq Composite climbed to new respective records on Thursday after weekly U.S. jobless claims reached their lowest level since the start of the Covid crisis. First-time claims for unemployment insurance totalled 340,000 for the week ended Aug. 28, versus a Dow Jones estimate of 345,000. The number is also the lowest since March 2020. The data came in a day before the key August jobs report, which investors are watching closely to decipher how fast the Federal Reserve will remove easy monetary policy.

– Shares in Asia-Pacific rose in early morning trade as a private survey in China showed shrinking activity in the services sector in August. Hong Kong-listed shares of Alibaba fell nearly 3% following reports that the firm is set to invest 100 billion yuan (about $15.5 billion) by 2025 for “common prosperity.” Other Chinese tech stocks in Hong Kong also declined, with the Hang Seng Tech index falling more than 1%.

In International news

Ford’s U.S. sales decline 33% in August as chip shortage devastates auto industry
U.S. sales of Ford Motor’s new vehicles last month declined by 33.1% from a year earlier due to an ongoing global shortage of semiconductor chips that’s wreaking havoc on the automotive industry, the company said Thursday. The Detroit automaker’s sales capped off a dismal month of U.S. auto sales in August, which plummeted to an adjusted selling rate of 13.09 million vehicles. That’s the worst pace since June 2020 and down from this year’s peak of 18.5 million in April, according to auto data firm Motor Intelligence.

WhatsApp is fined $267 million for breaching EU privacy rules
Facebook-owned WhatsApp has been fined a record 225 million euros ($267 million) by Ireland’s data watchdog for breaching EU data privacy rules. Ireland’s Data Protection Commission said Thursday that WhatsApp did not tell European Union citizens enough about what it does with their data. The regulator said WhatsApp failed to tell Europeans how their personal information is collected and used, as well as how WhatsApp shares data with Facebook.