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Local Market Update
- Local stocks rose slightly as investors added to positions ahead of Powell’s testimony. The benchmark All-Share index closed 0.15% higher at 73,943 points. The blue-chip Top 40 index closed 0.22% higher at 67,260 points. Tuesday’s data showed manufacturing output fell 0.7% in November from a year earlier, following a revised 8.5% slump in October when a major metalworkers union went on strike.
- The rand edged higher Tuesday as the dollar struggled to gain ground ahead of Federal Reserve Chairman Jerome Powell’s congressional hearing. At the close of trading, the rand was trading around R15.52 against the dollar, 0.88% firmer.
- Gold prices were unchanged this morning as traders focused on U.S. inflation data for clues on interest rates after the Fed chief’s less aggressive remarks at the last meeting led to a rise in gold prices. Meanwhile, oil prices climbed early today, extending their strong gains from the previous day after the head of the U.S. Federal Reserve signalled that the central bank may raise interest rates more slowly than expected, which should support oil demand in the near term.
In Local News
Tongaat Hulett confirms civil claims against former executives
Tongaat Hulett is seeking a total of around R450 million in its civil claim against several implicated former executives as the once formidable JSE-listed sugar producer and land developer still tries to recover from the accounting scandal that brought the group to its knees three years ago. The group confirmed the size of the civil claims in a statement Tuesday while it awaits word from the National Prosecuting Authority (NPA) on whether the NPA will criminally charge and prosecute the former executives over the alleged accounting irregularities. After a forensic investigation by PwC (hired by Tongaat’s new executives) uncovered several accounting irregularities in 2019, Tongaat Hulett had to restate its results for fiscal years 2018 and 2019.
New vehicle sales growth slows to 8% this year – Naamsa
The growth rate of new vehicle sales is expected to decline to around 8% in 2022. This follows a strong 22.1% increase in sales in 2021, after a 29.2% decline in sales in 2020 due to the Covid 19 pandemic. Total new vehicle sales increased to 464,122 units in 2021, compared to 380,206 units in 2020, compared to a total of 536,612 new vehicles sold in 2019, the year before the Covid 19 pandemic. Mikel Mabasa, CEO of the Automotive Business Council Naamsa, said the improvement in the new vehicle market is expected to continue at a slower pace in 2022, in line with the lower projected GDP growth rate for the country.