South African Market Overview 18 January 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 rose after the Chinese central bank surprisingly cut interest rates on medium-term loans. The commodities index, which represents mining companies, particularly gold and platinum group metals, rose 0.35%, while technology company Naspers, which holds as much as a 29% stake in Chinese Internet giant Tencent through a subsidiary, added 0.47%. Overall, the benchmark all-share index closed up 0.58% and the blue-chip Top 40 index was up 0.64%.

     

  • The rand weakened on Monday as the dollar gained in anticipation of several interest rate hikes by the Federal Reserve this year. However, by the close of trading, the rand had recovered its earlier losses and was trading at R15.39 against the dollar, 0.04% firmer. The rand has started 2022 strongly, gaining more than 3% against the dollar, making it one of the best performing emerging market currencies.

     

  • Oil prices rose to a seven-year high today after Yemen’s Houthi group attacked the United Arab Emirates, escalating hostilities between the Iran-allied group and a coalition led by Saudi Arabia, raising concerns about possible supply disruptions. Meanwhile, gold prices were unchanged this morning as the weaker dollar partially offset pressure from high U.S. Treasury bond yields, which reduce the appeal of gold without yields.

 

In Local News

 

CAPITAL & COUNTIES PROPERTIES PLC – Trading Update

As of December 31, 2021, Covent Garden’s independent property valuation was £1.7 billion, an increase of 4.6 percent on a like-for-like basis in the second half of the year and an overall movement of -0.6 percent for the full year. The second half performance was driven by a 3 percent increase in ERV on a like-for-like basis, reflecting positive leasing activity and high occupancy levels across the asset, and a 5 basis point decline in equivalent yield to 3.88 percent on a like-for-like basis. The valuer’s assumption on the loss of short-term income was reduced from £11 million to zero. Rental income for the first quarter of 2022, billed in December 2021, is currently at 86 percent (adjusted for monthly payment schedules).

Court victory for Mpumalanga residents affected by 14-hour-a-day power outages

Residents of Govan Mbeki Municipality are pleased with a ruling last week by the Mpumalanga High Court that requires the municipality to report regularly to the court on progress in clearing Eskom’s R1.18 billion arrears. “It’s an important victory for the residents as the municipality is accountable to the court and the residents,” said Waseem Gani, a lawyer with MacRoberts Inc, which is representing residents in the case. The municipality had fallen so far behind in paying its arrears to Eskom that it was forced to introduce rotating load shedding, which resulted in power outages of 10 to 14 hours a day.