South African Market Overview 27 May 2022

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

 

Local Market Update

  • On the Johannesburg Stock Exchange (JSE), the All-Share Index rose 2.81% yesterday, while the blue-chip Top 40 Index gained 3.01%. Industrial stocks gave the biggest boost, with the local J211 index ending the day up 3.36%. Meanwhile, South African manufacturers’ inflation rose to a record high in April, exceeding analysts’ forecasts and likely further dampening industry sentiment. According to Statistics South Africa, prices for manufactured goods rose 13.1%, up from 11.9% in March. That’s the fastest rate since early 2013, when the statistics office split its producer price index and now reports five different measures of factory gate prices, including agriculture, mining, power and water, and intermediate goods.
  • The South African rand weakened against the dollar in early trading Thursday as minutes from the Federal Reserve’s latest meeting indicated the central bank was likely to stay the course on rate hikes. However, the rand gained 0.38% against the dollar by the end of the session, trading at R15.68.
  • Gold prices were little changed this morning, but the metal was on track for a second weekly advance after the U.S. dollar retreated from 20-year highs. Oil prices hovered around a two-month high today, with Brent crude on track for its biggest weekly rise in a month and a half, supported by the prospect of an EU ban on Russian oil and the upcoming summer driving season in the United States.

 

In Local News

 

African Bank Ltd acquires Grindrod Bank for R1.5 billion.

Unlisted retail banking group African Bank will acquire 100% of Grindrod Financial Holdings
Limited (GFH) and 100% of the preferred shares issued by Grindrod Bank. Grindrod Bank is the commercial and industrial real estate finance arm of JSE-listed freight group Grindrod Limited. The R1.5 billion acquisition, announced Thursday in Sens, is expected to accelerate African Bank’s entry into South Africa’s commercial banking sector. Of the R1.5 billion total cash consideration, R285 million is payable to Grindrod for the disposal of Grindrod Bank’s issued preference share capital, while the balance is for the disposal of GFH’s issued ordinary share capital.

Sars and striking employees no closer to agreement

The labour dispute between workers affiliated with the National Education Health and Allied Workers’ Union (Nehawu) and the
Union (Nehawu) and the Public Servants Association (PSA) continue at the South African Revenue Service (Sars) continues. Several branches across the country and call centres that support tax professionals and small and medium enterprises are closed. It is also not possible to make electronic bookings. However, disruptions to operations have been minimal, and by noon Thursday noon (May 26), all border crossings were running smoothly, with the exception of Qacha’s Nek on the Free State/Lesotho, where police were called to assist.