South African Market Overview 23 November 2021

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


Local Market Update

  • Johannesburg-listed stocks posted modest gains on Monday, with the All-Share Index closing up 0.7% at 70,866 points. Financials and commodity stocks provided the biggest boost to the overall market, rising 1% and 1.22%, respectively. Meanwhile, energy regulator Nersa Eskom has presented four new options for setting the tariffs it will be allowed to charge from April 1 next year. However, Eskom is insisting on its court application to force Nersa to process its application using the existing tariff setting method. Nersa had earlier rejected Eskom’s request for a 20% increase, saying the existing pricing method was no longer valid.
  • The rand weakened on Monday, while the US dollar rose on the nomination of US Federal Reserve Chairman Jerome Powell for another term. At the close of trading, the rand was trading R15.87 weaker against the dollar, or 0.85%. In the absence of local drivers, the Rand is guided by global factors, with the outlook for US monetary policy a major theme. Domestic data to be released this week include a leading economic indicator on Tuesday and the producer price index on Thursday.
  • Gold prices edged higher this morning, but hovered near their lowest levels in more than two weeks from the previous session as the dollar strengthened on the nomination of U.S. President Joe Biden to the post of Federal Reserve Chair Jerome Powell for a second term. Meanwhile, oil prices fell early today, erasing gains from the previous session, as rumours grew that the United States, Japan and India would release their crude oil reserves to dampen prices despite the threat of weak demand due to the flare-up of the COVID -19 cases in Europe.


In Local News

Naspers and Prosus on the rise
Naspers and Prosus reported strong growth in the six months to the endof September 2021, with both companies increasing revenue by 29% and trading profit by around 8%. This growth was driven primarily by continued expansion and consumer adoption of food delivery, which saw revenue rise 86% to $1.3 billion (about R20.6 billion) in the six months under review. Unfortunately, investing in the “next big trend” is taking longer than some investors had hoped to translate into profits. The grocery supplier reported that trading losses increased 55% to $312 million compared to the same six months in 2020, according to figures provided by both Naspers and Prosus.

Netcare targets digital expansion as Covid-19 pressure eases
South Africa’s largest private hospital group Netcare plans to digitise its entire ecosystem, with the rollout set to begin in 2022. The digitisation means that Netcare patients – alongside other that Netcare patients – among other services – can receive medical prescriptions and have detailed patient records in their hands. Group revenue increased 11.5% to just over R21 billion from R18.84 billion in 2020 and group Ebitda (earnings before interest, tax, depreciation and amortisation) increased to
R3,19 billion, up 24,8% on the previous year, which was impacted by Covid. The group’s Ebitda margin for the period was 15,2%, slightly better than 2020’s 13,6%. However, Netcare estimates that the 18-month pandemic may have cost the group Ebitda by about R1,5 billion. Despite this, the group still managed to improve its bottom line, as profit after tax increased by 188.8% compared to the last period.