Daily Market Overview 6 October 2021

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Local Market Update

– A rally in beaten down technology companies and a 10.73% jump in Exxaro Resources, South Africa’s biggest coal miner, pushed the country’s major stock indexes higher. The tech sector jumped 1.99%, led by technology investor Naspers, which indirectly holds around 30% stake in Chinese company Tencent. Higher coal prices and increased demand particularly from Asia due to a post-pandemic recovery boosted Exxaro, which exports high-quality coal to countries such as India and China, the two biggest importers of coal. Overall, the FTSE/JSE All-share index rose by 0.65% and the FTSE/JSE Top-40 companies’ index ended up 0.59%.

– The rand gained on Tuesday afternoon as the central bank highlighted inflation risks in a biannual review of its monetary policy stance. Asked about those risks, Governor Lesetja Kganyago said the bank stood ready to act if it saw them materialising. At the close of the session, the rand was trading around R14.97 to the dollar, 0.33% firmer.

– Gold prices inched lower earlier today as a firmer dollar and rise in U.S. Treasury yields weighed on the precious metal’s appeal, with investors focused on U.S. non-farm payrolls data due later this week. U.S. oil prices rose for a fifth day today to their highest since 2014 amid global concerns about energy supply on signs of tightness in crude, natural gas and coal markets.

In Local news

MTN Uganda to offer 20% stake in IPO
MTN Group agreed to list 20% of its Uganda unit on the country’s stock exchange, the latest move by Africa’s largest wireless carrier to allow more local investors to buy and sell shares in individual units. The move by the South African company is aimed at ensuring broad-based ownership in its operating subsidiaries, according to a statement on Tuesday. The decision follows listings of MTN’s units in Nigeria, Ghana and Rwanda, which to some extent took place after pressure from government and local regulators.

AB InBev explores $1.2bn sale of German beer brands
Anheuser-Busch InBev NV is exploring a sale of some of its German beer brands as it focuses on
growth away from the world’s most popular alcoholic beverage, according to people familiar with
the matter. The portfolio of regional brands could be valued at about 1 billion euros ($1.2 billion),
the people said, asking not to be identified discussing confidential information. The world’s largest
brewer is working with an adviser as it explores options, they said. Discussions are ongoing and
there’s no certainty that AB InBev will decide to proceed with a sale of the German brands,
according to the people

International Market Update

– European stocks rallied on Tuesday with regional investors brushing off losses on Wall Street earlier in the week. The pan-European Stoxx 600 closed up 1.2%, with banks jumping 3.4% to lead gains while tech stocks added 2.1%. On the economic data front, final purchasing managers’ index (PMI) readings from across the euro zone showed business growth dented in September by inflationary pressures and supply chain problems. The final IHS Markit composite PMI came in at 56.2 last month, compared to 59.0 in August. Anything above 50 represents an expansion.

– The major averages rebounded on Tuesday following a technology-centered market rout in the previous session. Mega-cap technology names were solidly in the green on Tuesday. Netflix rose 5.2%, Amazon gained just shy of 1%. Apple and Alphabet advanced 1.4% and nearly 1.8%,
respectively. Facebook shares rose 2% following a 5% slide on Monday due to a whistleblower’s claims and a site outage. Stocks tied to the economic recovery, like cruise lines, airlines, retailers and banks, also rose alongside the broader market.

– Shares in Asia-Pacific were mixed in early trade, following an overnight bounce on Wall Street with stocks rebounding from Monday’s losses. The Reserve Bank of New Zealand (RBNZ) this morning raised its official cash rate to 0.5%, joining South Korea and Norway in being among the earliest countries to raise rates in the pandemic era.

In International news

Pepsi earnings top estimates despite higher supply chain costs
PepsiCo on Tuesday raised its full-year forecast after its latest quarterly earnings and revenue topped analysts’ expectations, despite higher costs and snarls in the supply chain. Net income for the quarter ended Sept. 4 came in at $2.22 billion, or $1.60 per share. That’s down from $2.29 billion, or $1.65 per share, a year earlier. Excluding items, the food and beverage giant earned $1.79 per share, topping the $1.73 per share expected by analysts surveyed by Refinitiv. Net sales rose 11.6% to $20.19 billion, beating expectations of $19.39 billion.

Volvo says shift to electric cars is the reason behind its $2.9 billion IPO
The CEO of Volvo Cars has told CNBC that the automaker’s shift to electric vehicles is the reason behind its planned listing on the Nasdaq Stockholm stock exchange. The company wants to raise 25 billion Swedish krona, or $2.9 billion, via the initial public offering, which will be one of the biggest in Europe this year. “We have a very big interest from investors to invest into EV companies, you see that growing all the time,” he said.