South African Market Overview 22 December 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 is expected to open higher on Wednesday morning, with sentiment buoyed by a rebound in US markets after the Omicron-related sell-off in recent sessions. Omicron is now responsible for nearly three-quarters of new Covid-19 cases in the world’s largest economy, but news on that has calmed as President Joe Biden hinted on Tuesday that talks will continue as his administration tries to push its $2-trillion (R32-trillion) Build Back Better spending plan through Congress. The Dow Jones index rose 1.6% overnight, while the tech-heavy Nasdaq gained 2.4%. In morning trading Wednesday, the Shanghai Composite rose 0.9% and the Hang Seng added 0.4%. Tencent, which can provide direction for the JSE via its Naspers stable, rose 0.68%. The rand traded 0.32% weaker at R15.88/$, holding steady for the week.
  • Gold prices traded in a narrow range on Wednesday as market participants prepared for the year-end holidays, with safe-haven demand fuelled by the fast-spreading Omicron Covid-19 variant countering a steady improvement in risk appetite. Spot gold was unchanged at $1,787.10/oz at 5:08 GMT, while US gold futures were little changed at $1,788.80. An inflationary world is expected in the first quarter of 2022, which could prompt the Federal Reserve to scale back stimulus support at a faster pace, which could be the reason for gold selling. The dollar index has regained some ground, putting pressure on the metal as it has become more expensive for buyers holding other currencies.
  • Oil prices rose again on Wednesday, while the dollar weakened. Risk appetite returned as some governments refuse to impose blocking measures to contain the spread of the Omicron Covid 19 variant and as China said it is capable of sustaining economic growth. Brent crude futures rose 44c, or 0.6%, to $74.42 a barrel after gaining 3.4% on Tuesday. Oil prices typically move inversely to the dollar, with a weaker dollar making commodities cheaper for those holding other currencies.

 

In Local News

 

Massmart restructures debt as it prepares to sell 15 game stores

Of the R2.5 billion Massmart lost in the July riots, R650 million will not be recoverable from insurers. Massmart, which owns Makro and Builders, has reorganised its debt in light of increased losses following the July riots and announced plans to sell 15 of its 114 Game stores. The company expects its annual losses to worsen by 20% by the end of the year compared to last year, when it posted a R1,8 billion loss.

Naspers Foundry invests R54 million in SA auto subscription service Planet42

The company is looking to compete in a growing market that targets low- and middle-income people who do not have a traditional bank loan to buy a vehicle. Naspers’ SA -focused venture arm has invested R54 million in a local technology platform that helps people without bank accounts or access to credit buy and rent vehicles for everyday use. Naspers’ Foundry unit had led a $5.8 million (R91 million) funding round for Planet42, an artificial intelligence (AI)-based car rental platform, investing $3.4 million, Naspers said on Tuesday.