South African Market Overview 1 December 2021

Sharing our Daily Market Overview with you, ensuring that you do not miss out on any important market changes!


Local Market Update

  • The Johannesburg All-Share Index closed 0.67% firmer, while the Top 40 Index gained 0.73%, mainly due to bargain hunters. Gold shares also helped the stock market rise as investors look for a safe haven amid mounting fears over the spread of the Omicron variant. Aspen Pharmacare closed 6.26% firmer after the company took a step toward a licensing agreement to package and sell Johnson & Johnson COVID -19 vaccine in Africa. Aspen Pharmacare announced on Tuesday that it had signed non-binding terms with affiliates of the U.S. drugmaker.
  • The rand gained on Tuesday, benefiting from a weaker dollar after Moderna’s chief executive said the vaccine COVID -19 against the Omicron variant was unlikely to be as effective as with other types. Risk appetite eased in global markets, but a weaker dollar ensured the rand traded at R15.92 against the greenback at the close of trade, 1.56% firmer than its previous close. The currency plunged to its weakest level since October 2020 on Friday as the world reacted with alarm to news of the new variant Omicron, which was first launched in southern Africa.
  • Oil prices recouped their losses this morning after falling sharply in the previous session as major producers prepared to discuss how to respond to the threat of fuel demand being hit by the Omicron variant. While some analysts expect OPEC + to pause plans to increase supply by 400,000 barrels a day in January in light of the potential for demand to be impacted by travel restrictions to curb the spread of the Omicron variant, several OPEC + ministers said there was no need to change course. Gold prices rose slightly today, hovering near a one-month low, after U.S. Federal Reserve Chairman Jerome Powell U.S. Federal Reserve Chairman Jerome Powell said the central bank will discuss ending its bond purchases sooner.

In Local News

Vukile resumes interim dividend, SA portfolio trades above pre-Covid levels.

Vukile Property Fund, a pioneer among retail-focused real estate investment trusts (Reit) on the JSE, announced on Tuesday its decision to resume payment of an interim dividend as the SA and Spain portfolios recovered strongly. Despite the ongoing global uncertainty surrounding Kovid-19 and the July unrest in parts of SA the group said in its latest half-year results to the end of September 2021 reported that business in Southern Africa is now above pre-Covid-19 levels.” Its Southern Africa business is largely made up of its South African assets, although the group also has a small presence in Namibia. Vukile reported a “rapid recovery” in its large retail portfolio in Spain, where retail sales in September 2021 were “above 2019 levels”. The group did not pay a dividend for the comparative half (to September 2020) due to the financial impact of the Covid 19 pandemic and the initial “hard lockdowns”. This was in line with the approach taken by most of its JSE listed companies, which withheld or deferred dividend payments to strengthen their balance sheets in the wake of the pandemic.

FirstRand expects half-year profit to rise by at least 30%

South African lender FirstRand said on Tuesday that its profits are expected to rise by more than 30% in the six months to December 31. The company cited higher retail loan growth and falling loan impairment charges as reasons. The bank said earnings per share, the key profit metric in South Africa, will be at least 258.6 cents in the period, up from 198.9 cents a year earlier. A more detailed explanation on the increase will follow, it said, adding that the bank continues to provision conservatively due to uncertainty.