South African Market Overview 17 May 2022

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

 

Local Market Update

  • Shares on the Johannesburg Stock Exchange (JSE) rose Monday on higher commodity prices, although most global stock indexes fell, including in the United States. The FTSE/JSE All-Share Index closed up 0.82% at 69,212 points and the blue-chip Top 40 Index closed up 0.81% at 62,496 points. The state-owned power utility Eskom announced on Monday that it would introduce a level 4 power blackout in the evening, a more severe blackout than the previously indicated level 3, meaning that power outages will occur in a larger part of the country. Market attention this week is also focused on a monetary policy decision by the South African Reserve Bank, which will be announced on Thursday.
  • The rand weakened on Monday amid subdued risk appetite as investors sought safety on concerns about global growth, while power outages at home clouded the outlook for economic growth. However, by the close of trading, the rand was trading around R16.13 against the dollar, 0.16% firmer.
  • Gold prices were little changed this morning as a decline in the dollar supported demand for the green precious metal and countered pressure from a rebound in U.S. Treasury yields. Oil prices opened lower in early Asian trading this morning after European Union efforts to impose a ban on Russian oil imports, which would tighten global supplies, met resistance from member country Hungary. EU foreign ministers failed Monday in their attempt to pressure Budapest to lift its veto on a proposed oil embargo on Russia after the country invaded Ukraine. An embargo would require the approval of all EU countries.

 

In Local News

 

VODACOM GROUP LIMITED – Preliminary results for the year ended March 31, 2022

Group revenue of 102.7 billion rupees increased 4.5%, with strong normalised growth of 5.8%* partially offset by the appreciation of the rand. Normalised growth in Group service revenue and operating profit of 4.6%* and 5.4%*, respectively, in line with our medium-term targets. We added 5.9 million new customers and now serve a total of 129.6 million customers across the Group, including Safaricom on a 100% basis. Financial services customers, including Safaricom on a 100% basis, up 5.0% or 2.9 million to 60.6 million. Free cash flow up 4.6%. Full year dividend of 850cps, up 3.0% and declared a final dividend of 430cps.

 

LIFE HEALTHCARE – Trading Statement for the six months to March 31, 2022

Southern Africa business saw revenue growth of 3-5% year-on-year in H1-2022, while normalised EBITDA* margin improved to 17% for H1-2022, compared to 16.6% for the six months ended March 31, 2021 (H1-2021 or the prior period). Continued volume growth across all
Alliance Medical Group (AMG) regions has resulted in year-over-year revenue growth of 1-3% for H1-2022 (in rand terms). The expiry of contracts with COVID -19 for the UK National Health Service (NHS) resulted in slower revenue growth as well as a decline in AMG’s normalised EBITDA margin to 21% (from 24.8% in H1-2021). Group revenue increased 3-5% year over year for H1-2022 growth, while the Group’s normalised EBITDA margin is approximately 17% compared to 18.6% in H1-2021.