South African Market Overview 25 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 fell, with gold tracking the yellow metal’s price decline on a stronger dollar. The mining index fell 1.46%, with gold mining companies taking the brunt of the fall. Sibanye Stillwater, Harmony Gold, DRD Gold, Gold Fields and AngloGold Ashanti all fell between 1.1% and 1.8%. Food manufacturer and fashion retailer AVI was the second biggest loser in the All-Share Index, falling 6.90% after the company announced that talks with Mondelez International over a possible acquisition of its Snackworks division had progressed. Overall, the Johannesburg All-Share Index fell 0.64%, while the Top 40 Index closed 0.62% lower.
  • The rand fell to a 12-month low on Wednesday as the US dollar strengthened and contagion from the pressured Turkish lira continued. At the close of trading, the rand was trading 0.46% weaker at R15.91 to the dollar. The US dollar continued its upward trend on renewed bets that the Federal Reserve will raise interest rates to rein in inflation. In the absence of any major market moving news domestically, the Rand is expected to continue to follow global factors.
  • Gold prices edged higher this morning as the dollar weakened slightly, but comments from U.S. Federal Reserve officials suggesting the central bank may accelerate the reduction of stimulus weighed on the metal, keeping it well below the key $1,800 level. Meanwhile, oil prices trended slightly weaker today as investors wait to see how major producers respond to emergency crude oil releases by major consumer nations, which are expected to cool the market, although data points to healthy fuel demand in the U.S.

 

In Local News

 

Lewis rises 9.5% after strong half-year results

The share price of JSE-listed home furnishings retailer Lewis Group rose 9.48% on Wednesday, hitting a new 52-week high and closing at R47.45, after the company reported strong half-year results for the six months ended September 30. Lewis reported a 20.7% increase in merchandise sales to R1.99 billion, benefiting from high stock availability. The group’s interim results show that credit sales increased by 24,4% and cash sales by 17,1%, with credit sales accounting for 50,6% (H1 2021: 49,1%) of total merchandise sales. Comparable store sales were up 17.9%. However, the double-digit sales growth should be viewed in comparison to the interim period of the last financial year, which was affected by Covid. The comparable half-year period reflected the impact of the Covid19 closure, which saw all 681 stores of SA shut for at least six weeks.

GEPF to cut allocation to PIC

Africa’s largest pension fund plans to cut its allocations to a division of South Africa’s Public Investment Corp. that has helped it meet some of its environmental, social and governance goals. South Africa’s Government Employees Pension Fund (GEPF) let a 70 billion rupee allocation agreement with PIC, the continent’s largest fund manager, expire in March and is now negotiating a new mandate. According to Sifiso Sibiya, GEPF’s head of investments, the new mandate will involve “introducing more consistent management” of poor investment decisions. GEPF’s decision comes after the R2.34 trillion PIC was the subject of a judicial probe focused on its Isibaya Fund.