South African Market Overview 28 January 2022

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, which had opened sharply weaker after the U.S. Federal Reserve hinted overnight at interest rate hikes starting in March, made up much of the lost ground in afternoon trading after comments from South Africa’s central bank. The South African central bank, which raised its repo rate by 25 basis points, called the decision “measured.” It said the Monetary Policy Committee believes that “a gradual increase in the repo rate will be sufficient to keep inflation expectations well anchored.” The benchmark All-Share index closed down 0.4% at 73,504 points, while the blue-chip Top 40 index ended the trading day down 0.44% at 67,070 points.

     

     

  • The rand weakened on Thursday as the central bank raised interest rates as expected and hinted that it would only raise rates gradually in the future. At the close of trading, the rand was trading 0.68% weaker at R15.45 to the dollar. Also contributing to the rand’s weakness was that the dollar rose to its highest level since July 2020, driven by bets that the U.S. Federal Reserve could make faster and larger rate hikes in the coming months.

     

     

  • Gold trended apartment today, posting its biggest weekly decline since November, as markets digested the Federal Reserve’s plans to tighten monetary policy, which drove the dollar index to a multi-month high. Oil prices gained for a sixth straight session this morning, trading near seven-year highs on signs of rising global demand. Oil prices have soared into 2022 as a number of supportive factors have pushed prices higher.

 

In Local News

 

PEPKOR HOLDINGS LIMITED – Trading Update Revenue for the quarter ended December 31, 2021 increased 1.3% to R22.8 billion. Excluding the divestment of John Craig in the prior year, sales increased 1.8%. Revenue growth was impacted by the strong base in the comparable quarter of the previous fiscal year and 161 looted stores that had not reopened at the beginning of the quarter following the unrest in KwaZulu Natal and Gauteng in July 2021. Lower revenues in the Fintech segment, due to a change in product mix and accounting treatment, further impacted the Group’s revenue growth. From a trading perspective and excluding John Craig, Pepkor delivered 3.1% revenue growth for the quarter, struggling with an exceptionally strong base in the prior year.

 

SHOPRITE HOLDINGS LIMITED – Operational Update For the six-month period ended 2 January 2022 (‘the period’ or ‘the six months’), Shoprite Group increased its total revenue by 10.0% to approximately R91.1 billion. Excluding the impact of the temporary closure of the Supermarkets RSA LiquorShop business due to the COVID -19 closure regulations, the Group grew total revenue by 8.2%. Excluding the impact of store closures and reopenings due to civil unrest, the Group opened a net 57 new supermarkets during the six months, bringing 2,003 supermarkets into operation. The Group’s franchise business OK, excluding the one store closed due to the unrest, closed a net of one store, ending the period with 511 stores.