South African Market Overview 18 November 2021

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

 

Local Market Update

  • The JSE All-Share Index closed virtually unchanged yesterday, up 0.01%, while the blue-chip Top 40 Index gained 0.09%. Investors’ attention will turn to the South African Reserve Bank’s (SARB) Monetary Policy Board meeting today. Among individual stocks, Fortress REIT B and Reunert gained 7.21% and 5.37%, respectively. Bringing up the rear among the all-share stocks were Libstar and Spar, down 7.89% and 7.32% respectively.
  • The Rand trended firmer early on Wednesday as traders awaited consumer price inflation and retail sales data as well as the interest rate decision later in the day. At the close of trading, the rand was trading R15.50 firmer against the dollar, or 0.09%.
  • Gold prices edged higher this morning as the dollar weakened and US bond yields retreated from a three-week high, boosting gold’s appeal. Oil prices had fallen in the previous session amid growing concerns about oversupply and a recovery in demand. China’s State Reserves Bureau said this morning that it is working on releasing crude oil reserves, but declined to comment on a U.S. request. It declined, however, to comment on a request by the U.S. for the world’s biggest consumer nations to tap stockpiles to lower global energy prices. The National Food and Strategic Reserves Agency, when asked for comment on the U.S. request, told Reuters it would post details of the operation on its website.

     

In Local News

 

Spar slips more than 7% after weak full-year results

Spar’s share price fell more than 7% on Wednesday after the company reported weak financial results for the 2021 financial year ended September 30. While the group described its “robust performance” despite “numerous challenges” during the year, the market reacted to the fact that it could only report revenue growth of 2.9% (to R127.9 billion). “Mixed performance across the regions resulted in an operating profit of R3,4 billion, down 1,5% on the previous year,” the group said in its Sens results statement. “At constant exchange rates, revenue increased 3.9%, highlighting the impact of the stronger rand on the current period,” it said. Spar’s diluted earnings per share rose 5.5% to 1,193.7 cents, while the group paid a final dividend of 536 cents per share.

Tongaat Hulett slumps more than 20% after announcing a rights issue

The share price of sugar producer and major landowner Tongaat Hulett slumped by more than 20% around midday on Wednesday after the group announced plans for a capital increase on the JSE. Shares initially slumped almost 33% when the news broke. Tongaat Hulett did not disclose the amount of equity to be raised and said in a statement that the price of the rights offer had yet to be determined. However, the group notes that the move is “intended to enable the company to reduce its debt to a sustainable level”. The company says that the “proposed substantial recapitalisation through a rights offer of new shares” is partly underwritten by Mauritius-based Magister Investments Limited, a shareholder and strategic partner of the group.