South African Market Overview 2 June 2022

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

 

Local Market Update

  • On the Johannesburg Stock Exchange, the All-Share Index closed 1.7% and the Top 40 Index 1.8% weaker, reflecting declines in global equity markets. The losses were broad-based and affected the mining, technology, financial and real estate sectors. The Absa Purchasing Managers’ Index The Absa Purchasing Managers’ Index showed that South African industry expanded at a faster pace in May as new orders recovered from the severe flooding in April. Data from the Automobile Association showed vehicle sales rose 2.1% year-on-year.
  • The rand stabilised on Wednesday, supported by a positive manufacturing survey that helped it hold its ground against a stronger dollar in global markets. At the end of the day, the rand was trading 0.46% firmer at 15.60 rupees per dollar.
  • Oil prices fell about $3 a barrel in early Asian trade today as investors took advantage of the recent rally, while a meeting of major producers later in the day was expected to pave the way for expected production increases. While China’s gradual shift away from strict production limits ( COVID -19) supported prices, the stronger U.S. dollar also weighed on oil prices this morning as it makes crude more expensive for holders of other currencies. Gold held its ground today, supported by lower U.S. Treasury yields, after rising concerns about stubborn inflation around the world helped gold rebound from its lowest level in two weeks in the previous session.

 

In Local News

 

South Africa’s Land Bank aims for debt resolution by end of September

South Africa’s Land Bank is working on a new debt restructuring plan to be completed by the end of September, according to a Treasury statement Wednesday. The state-owned agricultural bank defaulted on its debt in April 2020 and missed a March 2021 debt restructuring deadline. So far, it has failed to agree on a “liability solution” to get out of default. “The last version of the liability solution was rejected by the lenders. The board is currently developing a new liability solution to be finalised and implemented by Sept. 30, 2022,” the
Ministry of Finance stated in a presentation to Parliament.

 

Temporary fuel levy relief to be withdrawn from August

The government’s temporary fuel levy relief will be withdrawn with the August fuel price adjustment, the Ministry of Finance and the Ministry of Mineral Resources and Energy (DMRE) confirmed on Tuesday. Nevertheless, the announcement that the R1.50/l fuel levy reduction will be extended for another month, until July 5, was widely welcomed. The decision was made as the Finance Ministry seeks to mitigate the impact on consumers and the economy of massive increases in fuel prices caused by the Russia-Ukraine conflict, which has led to a surge in international oil prices.