South African Market Overview 19 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 slipped on Tuesday. The benchmark All-Share index closed down 0.84% at 74,956 points and the blue-chip Top 40 index closed down 0.88% at 68,282 points. The decline, albeit broad-based, was mainly driven by the fall of index heavyweight Naspers, which posted a drop of nearly 3.5% in the wake of a massive sell-off in global tech stocks amid rising Treasury yields. Petrochemical company Sasol, meanwhile, bucked the trend, rising more than 6.5% as crude prices hit a seven-year high.

     

  • The rand weakened on Tuesday as rising U.S. government bond yields boosted the dollar. At the close of trading, the rand was trading R15.52 weaker against the dollar, or 0.85%. Tuesday’s data showed mining output rose 5.2% year-on-year in November, above forecasts of 4.25% growth. Later today, the statistics agency will release figures on consumer inflation in December and retail sales in November.

     

  • Gold prices were unchanged today, hovering near a week’s low reached in the previous session, as U.S. Treasury yields rose to two-year highs on expectations of faster rate hikes by the Federal Reserve. Meanwhile, oil prices rose for a fourth straight day to a seven-year high as a pipeline failure from Iraq to Turkey added to concerns about already tight supply prospects amid worrisome geopolitical issues in Russia and the United Arab Emirates.

 

In Local News

 

Vodacom shareholders give green light to acquisition of Vodafone Egypt for R41 billion.

Vodacom Group has moved a step closer to acquiring a 55% stake in Vodafone Egypt from its British parent Vodafone. Its annual general meeting on Tuesday voted in favour of the move with the votes of minority shareholders. The Johannesburg-based company, which is one of South Africa’s leading mobile operators, will acquire a majority stake in the Egyptian company for 41 billion rupees. “This is an exciting and important milestone for Vodacom, as the acquisition of Vodafone Egypt will fundamentally change our evolution from a telecommunications company to a technology company,” Vodacom CEO Shameel Joosub said in a statement. “This is a transaction that offers significant diversification and growth opportunities for our shareholders,” Joosub added.

 

Tongaat Hulett secures shareholder approval for controversial rights offering

Troubled JSE-listed sugar producer and property owner Tongaat Hulett on Tuesday secured shareholder support for a controversial multi-billion rand rights issue that will involve Zimbabwe’s billionaire Rudland family. This was despite calls from some shareholder activists such as David Woollam and Chris Logan to postpone the vote. They argued that shareholders were not adequately informed about the offer and Mauritius-based Magister Investments Limited, a private group controlled by the Rudlands. While the final details of the capital increase (such as the share price) have yet to be determined, one of the resolutions shareholders were asked to vote on related to the appointment of Hamish Rudland as a new member of Tongaat Hulett’s board of directors as part of the proposed transaction.