South African Market Overview 19 May 2022

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

 

Local Market Update

  • The All-Share Index ended down 0.88% at 69,083 points and the blue-chip Top 40 index closed down 0.84% at 62,494 points, driven by a decline in commodity companies. Technology stocks on the JSE also closed lower, including index heavyweight Naspers, which closed down nearly 5%, while its subsidiary Prosus closed down more than 3%. Investors are now waiting for the South African Reserve Bank’s monetary policy decision, which is expected later today. Consumer price inflation remained at a five-year high of 5.9% in April, according to a Reuters poll, just within the central bank’s target range of 3%-6%.
  • The rand weakened against the dollar on Wednesday after inflation remained at the upper end of the central bank’s target range and retail sales figures disappointed, a day before the central bank announces its interest rate decision. At the close of the day, the rand was trading 0.97% weaker at R16.06 to the dollar.
  • Oil prices rose early today, recovering from early losses, as lingering concerns about tightening global supply outweighed fears of slower economic growth, underscored by a slump in global equity markets. Gold prices trended unchanged this morning as a higher dollar weighed on gold prices and countered support from lower Treasury yields, with the metal’s outlook already clouded by the Federal Reserve’s aggressive stance on inflation.

 

In Local News

 

TRANSACTION CAPITAL LIMITED – Unaudited Interim Results

In the first six months of FY2022, Transaction Capital continued its track record of high-quality organic earnings growth. Adjusted earnings from continuing operations attributable to the Group increased by 38% to R603 million and adjusted earnings per share from continuing operations attributable to the Group increased by 28% to 83.7 cents. Basic earnings per share from continuing operations attributable to the Group increased by 2% to 65.7 cents
(HY2021: 64.3 cents) and basic earnings per share from continuing operations attributable to the Group increased to 65.7 cents (HY2021: 65.2 cents).

 

LEWIS GROUP LIMITED – Trading Statement for the year ended 31 March 2022

Shareholders are advised that the Group’s financial results for the year ended 31 March 2022
(“the period”) reflect strong trading and operating performance across the traditional retail brands of Lewis, Best Home and Electric and Beares, with debtor costs continuing to decline due to the improving health of the debtor book. Results were impacted by impairment charges on the Group’s right of use assets of R99.2 million and on the goodwill of UFO of R31.4 million. Operating profit before impairment and capital items is expected to increase by 2% to 6% in the reporting period, with operating profit declining between 6% and 2%. Net income benefited from lower financing costs and is expected to increase by 8% to 14%.