South African Market Overview 11 April 2022

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

 

Local Market Update

  • The Johannesburg Stock Exchange (JSE), which had been on a losing streak since Monday, recovered some of its losses on Friday, supported by mining companies, but still ended the week below the previous week’s close. The benchmark FTSE/JSE All-Share index closed up 1.04% at 74,776 points and the blue-chip Top 40 index closed up 1.11% at 67,747 points. Most major global indexes gained on Friday, and the local mining index also gained 3.76%, supported by a rise in gold and platinum group metals prices.

     

  • The rand trended firmer on Friday but was lower for the week as stronger commodity prices cushioned the local currency’s decline against a stronger dollar. At the close of trading, the rand was 0.62% firmer against the dollar, trading around the R14.66 level, with the prospect of a more aggressive pace of interest rate hikes by the U.S. Federal Reserve supporting the greenback as the U.S. dollar index rose to 100 for the first time in nearly two years. The dollar has gained ground over the past month against a basket of six currencies, particularly the euro.

     

  • Oil prices slipped $2 a barrel in early Asian trading today, posting their second consecutive weekly decline, after global consumers announced they would release a record amount of crude and oil products from strategic stockpiles and as China continued its lockdown measures. Gold prices slipped this morning as the dollar and Treasury yields trended firmer on the prospect of aggressive interest rate hikes by the Federal Reserve, while fresh concerns over Russia’s attacks in eastern Ukraine lent some support to the safe-haven metal.

 

In Local News

 

TELKOM SA SOC LIMITED – Telkom reaches out-of-court settlement with ICASA

Shareholders are advised that Telkom and the Independent Communications Authority of South Africa (“ICASA”) have reached an out-of-court settlement that ends High Court litigation over high demand spectrum licensing. The settlement addresses the two main complaints that led Telkom to take legal action, namely Telkom’s unfair restriction to bid for spectrum in the past auction and the need for ICASA to consider the competitive impact of spectrum agreements when licensing unallocated spectrum. The parties have agreed that Telkom will withdraw the lawsuit and that each party will bear its own legal costs.

 

Ekurhuleni, Joburg want tariff increases of up to 11%

Two of the country’s largest metropolitan cities are proposing tariff increases for their utilities of around 10%. The city of Ekurhuleni wants to raise water and wastewater rates by 11% for the 2022/23 period beginning July 1. The City of Joburg has proposed increases of 9.75%, or nearly 10%, for the same two services. Both metros want to increase electricity rates by 9.61%. The municipalities say this is in line with Eskom’s tariff increase, which was approved by regulator Nersa in late February (Eskom supplies electricity in bulk to municipalities).