South African Market Overview 24 November 2021

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

 

Local Market Update

  • Stocks on the Johannesburg Stock Exchange rose for a second straight day, with the two main indices closing at their highest levels ever, as recoveries in mining and local financial companies kept momentum going. The JSE bucked the global trend where most major indices either fell or held back as concerns over Powell’s nomination fueled fears of higher interest rates that would make the cost of capital more expensive. The blue-chip Top 40 index closed 0.28% higher at 64,566, while the benchmark All-Share index was at 71,015. The commodities index, which represents a basket of gold and platinum companies, was up more than 1.5%.
  • The rand slid further on Tuesday, trading near a one-year low as the dollar held firm on bets of interest rate hikes in the U.S. following the nomination of Federal Reserve Chairman Jerome Powell for a second term. However, the rand was trading 0.23% firmer at the close of trade at R15.83 against the dollar.
  • Oil prices fell today as the U.S.-coordinated release of stockpiles from strategic reserves eased concerns about tightening global supplies, while investors took profits from the previous day’s rally ahead of the U.S. Thanksgiving holiday. The United States said on Tuesday it would release millions of barrels of oil from strategic reserves in coordination with China, India, South Korea, Japan and Britain. Korea, Japan and Britain to release millions of barrels from strategic reserves to cool prices after OPEC + producers ignored repeated calls for more crude. Gold prices rose slightly this morning, although U.S. dollar strength and bets that the Federal Reserve could raise interest rates sooner kept the metal below the key $1,800 level.

 

In Local News

 

PPC considers reinstating dividend

JSE-listed cement and building materials company PPC has delivered another solid financial performance that has allowed it to further deleverage its balance sheet, and has indicated that it is at a point where it may consider paying a dividend to shareholders again. PPC last paid a dividend six years ago, in November 2015. The group’s chief executive, Roland van Wijnen, confirmed on Tuesday that once the group has brought its balance sheet to an appropriate level, it will reach a situation where it can consider resuming dividend payments. “I think it’s important for our shareholders to get a return on their investment. They have been waiting for this for a long time,” he said. Van Wijnen said PPC delivered robust financial performance in the six months to the end of September 2021, reducing its gross South African debt to R1.7 billion.

Brait slides almost 10% after R3bn rights offer announced

Investment holding company Brait, listed on the JSE and Luxembourg Stock Exchange, saw its share price drop by over 10% (to around R4,o5) on Tuesday morning after the company announced plans for a rights issue of up to R3 billion to refinance its debt. However, the shares ended the day down 9.5% at R4.10. The rights offer was announced alongside the group’s interim results for the six months ended 30 September 2021, which showed a 3% increase in net asset value.