South African Market Overview 22 February 2022

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

 

Local Market Update

  • Local stocks closed lower yesterday, with shares of tech giants Prosus and Naspers suffering from heavy losses at China’s Tencent Holdings, which feared a further crackdown by regulators in China. Shares of Prosus, which holds a stake in Tencent, fell 7.74%, while Naspers, which in turn holds a stake in Prosus, slumped 8.03%, both to two-year lows. The Johannesburg All-Share Index fell 1.1% to 75,528 points, while the Top-40 Index closed 1.11% weaker at 68,876 points.

     

     

  • The rand was relatively stable on Monday, although global markets were rattled by rising concerns about Russia’s incursion into Ukraine. At the close of trading, the rand was trading around R15.17 against the dollar, 0.31% weaker. On Wednesday, South African Finance Minister Enoch Godongwana will present the 2022 budget. Investors will be hoping for reassuring signs on debt performance after the Treasury pledged to cut the budget deficit in a medium-term budget in November.

     

     

  • Gold prices hit a nine-month high this morning after Russia ordered troops into the breakaway regions of eastern Ukraine, boosting demand for the safe-haven metal. Meanwhile, oil prices rose more than $2 this morning to a new seven-year high after Moscow ordered troops into two breakaway regions in eastern Ukraine. This escalated the crisis that Western leaders have warned about into a war.

 

In Local News

 

SASOL LIMITED – Interim results

Earnings before interest and taxes (EBIT) totaled R24.3 billion, up 12% from the previous period. This performance was supported by a strong macroeconomic environment with higher crude oil prices, refining margins and chemical prices combined with increased demand, offset by lower production volumes due to operational challenges at Secunda Operations (SO). Earnings per share were R15.21 in the six months to December 2021, compared with R19.16 in December 2020, while cash flow from operating activities increased 73% year-on-year to R20.3 billion. Actual capital expenditure was R10.4 billion compared to R7.5 billion in the previous period.

 

AVENG LIMITED – Audited condensed consolidated interim financial statements

Consolidated sales increased to R13.0 billion (December 2020: R12.9 billion). Operating profit for the period decreased to R215 million (December 2020: R280 million). Profit for the period decreased from R438 million to R53 million. Normalised earnings* for the period increased from R73 million to R82 million. Earnings per share decreased to 43 cents per share from 909 cents per share (restated) in the comparative period. Normalised earnings per share* decreased to 67 cents per share from an adjusted 151 cents per share in the comparative period. Total earnings decreased to R17 million (14 cents per share) from total earnings of R109 million (226 cents per share, restated). Normalised comprehensive income* increased to R172 million (December 2020: R109 million). Operating free cash flow of R490 million (December 2020: R1.4 billion).