South African Market Overview 11 February 2022

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

 

Local Market Update

  • Johannesburg-listed stocks fell, led by declines in rand hedge stocks, which earn much of their profits in foreign markets and tend to weaken when the currency strengthens. The top 40 index closed down 0.23% at 69,944 points and the broader all-share index fell 0.14% to 76,585 points. The mining index fell 0.47% after weak December data. Mega-growth stock Naspers, a tech investor that owns a majority stake in Prosus, slipped 2.59%.
  • The rand posted strong gains Thursday ahead of President Cyril Ramaphosa’s annual State of the Nation address, in which he usually announces reforms. State of the Nation Address, in which he usually announces reforms in key policy areas. At the close of trading, the rand was trading around R15.18 against the dollar, 0.2% firmer. Domestic data released on Thursday. Mixed data were released on Thursday. Manufacturing output fell 0.1% year-on-year in December, less than expected, while mining output fell 1.1% in December, although growth had been expected.
  • Gold prices slipped this morning as a higher-than-expected U.S. inflation rate and aggressive comments from a Federal Reserve official raised the likelihood of a hefty interest rate hike next month, sending Treasury yields higher. Meanwhile, oil prices eased today as high U.S. inflation fueled concerns about aggressive rate hikes, and investors await the outcome of U.S.-Iran talks that could increase global crude supplies.

 

In Local News

 

Siemens reports sharp rise in orders, beats profit forecast

ArcelorMittal South Africa reported EBITDA of R8 569 million, up from R37 million in the previous period, while operating profit rose sharply from a loss of R963 million in 2020 to a profit of R7 976 million. Total income of R6 860 million recovered strongly from a loss of R2 033 million recovered strongly to a profit of 615 cents per share compared to a loss of 185 cents in 2020. EBITDA increased 66% to R5 351 million in the second half, compared to R3 218 million in the first half of 2021, while revenue increased 61% to 39 708 million, driven by a 13% increase in total steel sales volumes and a 47% increase in net realised steel selling prices. Sales increased 14% to R21 112 million in the second half, compared to R18 596 million in the first half of 2021.

BARLOWORLD LIMITED – Voluntary trading update.

The Group continued to deliver a solid performance in the first quarter of the financial year. The first quarter was supported by favourable results in December, particularly in the Equipment southern Africa and Car Rental and Leasing businesses. Results for the three months ended December 31, 2021 were further supported by sustainable cost management and healthy free cash flow in the Group’s core businesses. The Group remains within its debt target and the gearing ratio is well below 1.0 times net debt to EBITDA (the Group’s target is < 3.0 times), while EBITDA interest coverage exceeds 8 times (the Group’s target is > 3.0 times).