South African Market Overview 29 November 2021

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

 

Local Market Update

  • The All-Share Index closed down 2.75% at 68,615 and the Top 40 Index closed down 2.58% at 62,411. Leading the losses were hospitality companies City Lodge Hotels, down more than 15%, and Tsogo Sun Hotels, down 14% at the close. Shares in Sun International, owner of the largest casino chain and a network of hotels including Sun City Resort, lost nearly 6.5% of their market value. Local scientists said they had discovered a new Covid 19 variant that had a “very unusual constellation” of mutations that were worrying because they could help bypass the body’s immune response and increase transmissibility.
  • The rand sank to its lowest since October 2020 after the discovery of a COVID -19 variant, described as the most worrisome yet, lulled investors into a sense of security. News of the variant triggered a wave of selling in risk assets in both emerging and developed markets. Traders sought safety in U.S. and eurozone government bonds and the Japanese yen. At the close of trading, the rand was trading around R16.30 against the dollar, 2.07% weaker. The rand fell as low as R16.37 against the dollar – a level last seen before news of the November 2020 vaccine breakthrough.
  • Oil prices rose this morning, recouping some losses after Friday’s slump of around $10 a barrel, as investors looked for bargains but remained cautious in light of the Omicron coronavirus variant and the Iran nuclear deal negotiations. Oil prices tumbled more than 10% on Friday along with other financial markets, posting the steepest one-day drop since April 2020, as the new variant spooked investors and heightened fears that the supply surplus could swell in the first quarter. Gold prices edged higher this morning as concerns over the impact of the potentially vaccine-resistant Omicron coronavirus bolstered the precious metal’s safe-haven appeal.

In Local News

Tsogo Sun Gaming reports half-year recovery, but new Covid variant as threat
JSE-listed Tsogo Sun Gaming’s half-year results released on Thursday show the group has put its 2020/2021 loss-making year behind it, as the gaming giant reported a jump in profits and a reduction in debt. The recovery in the first half of the year was received positively by the markets as the group’s share price rose by more than 6% on Thursday. However, the gains were wiped out on Friday morning as the market digested news of a new Covid 19 variant in the country. The group reported a 159% increase in total profit for the first half to R323 million, compared to a loss of R543 million in the first half. While this is an improvement on the previous year, the latest profits are 52% lower than the same period in 2019/2020. Tsogo Sun Gaming’s revenue also increased by 144% in the current period.

Quantum Foods’ profit falls amid high feed costs and bird flu outbreak
JSE-listed poultry group Quantum Foods reported a 34% drop in operating profit to R144 million for the financial year ended 30 September 2021 (2020: R220 million), partly due to rising feed prices and an outbreak of highly pathogenic avian influenza (HPAI) in South Africa. Headline profit fell 32% to R148 million (2020: R218 million), earnings per share fell 34% to R102 million (2020:
<span;>R156 million) and earnings per share fell from 80,5 cents to 52,2 cents. However, the group achieved a 6% increase in revenue to R5 401 million (2020: R5 095 million).