South African Market Overview 15 June 2022

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

 

Local Market Update

  • In the stock market, local indexes lost over 1% yesterday as investors continued to worry about an aggressive rate hike by the Federal Reserve on Wednesday. The broader All-Share Index slid to an eight-month low. Telkom led the downside, falling 9.5% after the majority state-owned operator reported lower-than-expected free cash flow and cut its medium-term revenue and profit forecast.
  • The rand advanced Tuesday while the dollar consolidated gains near a two-decade high on fears that aggressive interest rate hikes by the Federal Reserve could push the U.S. economy into recession. At the close of trading, the rand was trading 0.44% firmer against the dollar, trading around the R16.07 mark.
  • Oil prices fell today on concerns about fuel demand ahead of a Federal Reserve meeting where the central bank is expected to raise interest rates by at least 75 basis points to fight inflation. Gold prices recovered slightly this morning from a nearly one-month low as investors anticipated a potentially aggressive announcement by the Federal Reserve to raise interest rates. U.S. Federal Reserve expected to fight inflation amid growing fears of a looming recession.

 

In Local News

 

STANDARD BANK GROUP LIMITED – Voluntary Trading Update

For the five months ended May 31, 2022 (5M22 or the current period), the group experienced low double-digit revenue growth. Larger average total assets and higher interest rates resulted in low double-digit net interest income growth. The Group’s return on equity (ROE) for the period was close to the Group’s cost of equity (in FY21 the cost of equity was 14.7%). Shareholders are cautioned that Standard Bank Group’s earnings per share (HEPS) and earnings per share (EPS) for the six-month period ending June 30, 2022 are expected to be more than 20% higher than the reported HEPS and EPS for the comparative period (1H21 HEPS: 721.4 cents, 1H21 EPS: 717.4 cents).

 

TELKOM SA SOC LIMITED – Group annual results

Despite the challenging operating environment that persisted during the year, Telkom increased its profits, with adjusted HEPS and BEPS growing by 2.5%* and 1.4%*, respectively. This performance was boosted by lower year-on-year financing costs and fair value movements, as well as the Group’s robust EBITDA. Group adjusted EBITDA remained relatively flat, declining 0.5%* to R11,908 million, although Group revenue decreased 1.1% to R42,756 million. Group revenue decreased marginally by 1.1% to R42 756 million. This was supported by growth in the mobile business, offset by declines in the fixed and IT businesses, which continue to be under pressure due to the challenging operating environment, and a decline in the fixed business