South African Market Overview 29 October 2021

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


Local Market Update

  • Shares on the Johannesburg Stock Exchange (JSE) continued to rise for a third day after sentiment was positive on rising precious metals prices and Wall Street shook off fears of slowing US growth. The benchmark FTSE/JSE All-Share index closed 0.42% higher at 67,760 points and the blue-chip Top 40 index closed 0.36% higher at 61,093 points. Precious metals companies were the main drivers, with the commodities index closing 0.65% higher. However, shares in the country’s banks, often a barometer of sentiment in the domestic economy, have fallen steadily for a month, suggesting investors are worried about the economic recovery.
  • The rand extended losses on Thursday as ongoing power outages weighed on market sentiment, while traders also turned cautious ahead of local elections and the mid-term budget statement. At the close of trading, the rand was trading 0.35% weaker, trading around the R15.14 mark against the dollar. The National Treasury postponed the release of the MTBPS from November 4 to November 11 due to local government elections on Monday November 1.
  • Gold prices made their third consecutive gain this morning as a drop in U.S. bond yields and a weak dollar boosted gold’s safe-haven appeal. Oil prices were mixed today but headed for their first weekly losses in at least eight weeks after U.S. oil inventories rose more than expected and Iran indicated it would resume talks with Western powers that could lead to an end to sanctions. The heat ended a two-month rally that had been fueled by tight gas and coal prices in Europe and China. Gas and coal prices in Europe and China had led to a switch to heating oil and dieselfor power generation while oil supplies were tight.

In Local News

EOH increases operating loss from R1.3bn to R147m operating profit 

Technology services provider EOH has turned around from an operating loss of R1.3 billion in the 2020 financial year to a profit of R147 million for the financial year ending July 31, 2021. This is according to its latest financial results released on Thursday. The company said the performance was evidence of “the success of a massive turnaround strategy” that began two and a half years ago. EOH’s gross profit margin improved to 28% from 22% in FY2020, while its operating margin increased to 2% from a negative 12% in FY2020. Its adjusted Ebitda margin (earnings before interest, tax, depreciation and amortisation) improved to 9% from 0% in FY2020. The improved performance helped EOH reduce its loss per share by 96% from 534 cents in FY2020 to a loss per share of 22 cents in FY2021.


M&R wins R1.6bn in new project orders

JSE-listed multinational engineering and construction company Murray & Roberts (M&R) has won R1.6 billion in new project orders in Australia, adding to the value of its record order book of R1.6 billion at the endof June 2021. M&R said on Thursday that after five years of strategic repositioning to move away from reliance on a single cyclical market, Australian liquefied natural gas (LNG), the Energy, Resources & Infrastructure (ERI) platform’s order book now reflects thriving target markets and reached an all-time high this year.