Sharing our Daily Market Overview with you, ensuring that you do not miss out on any important market changes!
International Market Update
- The Johannesburg Stock Exchange’s Top 40 index rose 1.26% to 64,281 points yesterday, while the broader All-Share index rose 1.21% to 70,938 points. Investors are waiting for domestic inflation data to be released later in the day along with retail sales data, the report from the South African Reserve Bank (SARB) and the Monetary Policy Committee (MPC) meeting. A Reuters poll showed that 13 of 20 economists surveyed between November 10and 12 would leave the repo rate unchanged at 3.50%, while the other seven predicted a 25 basis point hike. The SARB cut its repo rate by 300 basis points last year to a record low as the economy struggled with the coronavirus crisis.
- The rand was firm in early trading on Tuesday, holding gains from the previous session as traders awaited the central bank’s monetary policy decision, which was expected later in the week. However, at the close of trading, the rand was trading around R15.51 against the dollar, 1.73% weaker.
- Gold prices rose slightly this morning but hovered near their recent lows after a surge in US retail sales kept the dollar near a 16-month high. Gold, often seen as a hedge against inflation, has benefited from loose monetary policy during the pandemic, but any rate hike is likely to make it less attractive as higher interest rates increase the opportunity cost of the non-interest bearing metal. Meanwhile, oil prices fell today after gasoline inventories in the U.S. fell more than expected last week. This could increase pressure on the Biden administration to release oil from emergency reserves to limit the rise in gasoline prices.
In International news
Stor-Age share price rises on better results
Shares in self-storage property fund Stor-Age rose just over 6% on the JSE on Tuesday after its half-yearresults to the end of September 2021 showed another strong set of financial results. As well as paying an interim dividend of 56.60 cents per share, Stor-Age announced an 8.85% increase in its dividend per share and chose to give the market an “outlook” by forecasting full-year dividend growth of between 6% and 8%. Rental income on a like-for-like basis was up 11.6% at SA and 23.8% in the UK. The fund’s strong operating performance resulted in a 9.3% increase in the net value of investment properties to just over R7.95 billion. This is another key metric by which the fund is outperforming the market, as several JSE-listed Reits are still experiencing depreciation or write-downs on properties. Stor-Age also has a sector-low gearing ratio of 25%.
Prosus expects 400% rise in first-half earnings per share from Tencent stake sale
Technology investor Prosus NV expects a sharp rise in earnings per share in the first half of its fiscal 2022, the company said on Tuesday. Proceeds from the sale of part of its stake in Tencent in April totaled $12.3 billion. In a pre-market statement, Amsterdam-based Prosus said earnings per share for the six months ended Sept. 30 will rise between 439% and 446% compared with $1.85 a share in the corresponding period a year earlier. The company added that “core earnings” per share, a non-standard metric used to indicate operating performance, will rise 5% to 12% from $1.34 per share. The improvement is due to an increase in dividends the company receives from Tencent, in which it still holds a 28.9% stake.