Daily Market Overview 9 September 2021

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Local Market Update

– The Johannesburg Stock Exchange’s Top-40 Index was down 1.6% to 59,379 points and the broader All-Share Index closed 1.5% lower at 65,525 points. Miners were the biggest losers on the blue-chip index, hurt as the gold price slipped to a two-week low. The stronger dollar and higher U.S. Treasury yields outweighed the boost to the precious metal from deepening concerns about global economic growth. Gold Fields fell 4.4%, AngloGold Ashanti dropped 3.4% and Sibanye Stillwater lost 3.3%.

– The rand drifted higher on Wednesday, defying a strong dollar and risk-off sentiment as the country’s central bank governor made the case for a tighter inflation target. At the close of the session, the rand was trading around R14.20 versus the dollar or 0.86% firmer.

– Gold prices held near two-week lows this morning, pressured by a stronger U.S. dollar, while investors awaited a policy decision by the European Central Bank (ECB) due later in the day. Oil prices rose for a second session earlier today, recovering from earlier losses as a decline in U.S. Gulf of Mexico output following damages from Hurricane Ida underpinned the market.

In Local news

FSCA hits Viceroy with R50m penalty for false, misleading statements on Capitec
The Financial Sector Conduct Authority (FSCA) has slapped a R50-million administrative penalty on Viceroy Research and three partners – Aiden Lau, Fraser John Perring and Gabriel Bernarde – for publishing “false, misleading or deceptive” statements about Capitec Bank in 2018 that caused its share price to drop by 23%. The FSCA says Viceroy Research and its partners had contravened Section 81 of the Financial Markets Act, which makes it an offence to publish false or misleading statements about securities and which the author “ought reasonably to know” is false, misleading or deceptive.

MTN is said to be in talks with buyers for Afghani wireless unit
MTN Group is in talks with potential international buyers for its wireless business in Afghanistan, a bid to accelerate plans to exit the country, according to people familiar with the matter. Africa’s biggest mobile-phone operator, the market leader in Afghanistan with a 40% share, is in discussions with several parties, said the people, who asked not be identified as the negotiations are ongoing. MTN announced just over a year ago a plan to exit countries in the Middle East over the medium term, enabling the Johannesburg-based company to focus on African markets.

International Market Update

– European stocks closed lower on Wednesday, reflecting cautious trade in global markets amid nervousness over economic growth and a resurgence in Covid cases. The pan-European Stoxx 600 provisionally ended the session down 1%, with autos dropping 2.2% to lead losses as most sectors and major bourses dipped into negative territory. European investors are erring on the side of caution ahead of today’s European Central Bank meeting. A recent spike in euro zone inflation and an uptick in economic indicators has led some market watchers to anticipate a more hawkish tone from policymakers.

– The Dow Jones Industrial Average and S&P 500 fell for a third straight day on Wednesday as investors reassess the economic growth outlook following a smooth ride in the market so far this year. On Wednesday, the Labor Department released the Job Openings and Labor Turnover Survey, which showed job openings rose to a record 10.9 million in July. Job openings outnumbered the unemployed by more than 2 million in July as companies struggled to fill a record number of vacancies.

– Shares in Asia-Pacific fell in early morning trade today as investors reacted to the release of China’s August inflation data. China’s consumer price index rose 0.8% year-on-year in August, compared to expectations for a 1% increase in a Reuters poll

In International news

GameStop falls more than 7% despite posting narrower loss and rising sales
Shares of video game retailer GameStop fell more than 7% in extended trading Wednesday after the company reported its second-quarter loss narrowed on a year-over-year basis. For the quarter ended July 31, the company reported a net loss of $61.6 million, or 85 cents per share. In the year-earlier period, GameStop reported a loss of $111.3 million, or $1.71 per share. On an adjusted basis, GameStop lost 76 cents per share.

Lululemon shares surge on earnings beat
Lululemon shares surged more than 13% in extended trading Wednesday after the athletic apparel maker reported fiscal second-quarter profit and revenue that topped analysts’ expectations. Net income for the three-month period ended Aug. 30 rose to $208.1 million, or $1.59 per share. That’s up from $86.8 million, or 66 cents per share, a year earlier. Excluding one-time items, the company earned $1.65 per share. That’s better than the $1.19 that analysts polled by Refinitiv had been looking for