South African Market Overview 3 December 2021

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


Local Market Update

  • Local shares took a breather yesterday, giving back gains from previous sessions as uncertainty over Omicron persisted and South Africa saw an increase in COVID -19 reinfections due to the new variant. The Johannesburg All-Share Index closed 0.25% weaker, while the Top 40 Index was down 0.36%. Leading the downside were gold shares, which followed weaker precious metals prices. Gold prices had hit a one-month low on Thursday as comments by U.S. Federal Reserve Chairman Jerome Powell about the need to tame inflation boosted bets of faster monetary tightening, and the Omicron-related inflows into gold from safe havens.
  • The rand rallied against a weaker dollar on Thursday after breaking through the 16.00 level again in the previous session as the Omicron variant of the coronavirus established itself as the dominant strain in South Africa. At the close of trading, the rand was trading R15.94 firmer against the dollar, or 0.67%.
  • Oil prices climbed this morning, extending gains after OPEC + said they would look at expanding supply ahead of their next scheduled meeting if the Omicron variant affected demand, but prices were still on track for a sixth week of declines. Gold prices threatened to fall for a third straight session today after the Federal Reserve signalled that the central bank may end its pandemic-era bond purchases and raise interest rates faster than expected to combat rising inflation.

In Local News

Rebosis declares no dividend for third straight fiscal year

Rebosis Property Fund declared on Thursday that it will not pay a dividend for the financial year ending August 31, 2021. This is the third consecutive financial year in which the group has waived it. This is the third consecutive financial year in which the group has opted not to pay a dividend. This comes as the debt-laden property fund continues to prioritise reducing its debt mountain, especially in the last year when the financial fallout from Covid-19 hit the fund harder than many of its JSE-listed peers. Dividend payout or dividend per share is an important measure of the financial performance of SA Reits. Under tax rules, a listed property company must pay out at least 75% of its distributable income to retain Reit status. Rebosis’ decision not to pay a dividend also comes as the group failed to meet solvency and liquidity tests, which is a requirement for Reits to pay dividends.

TFG acquires digital shopping and delivery service provider Quench

Fashion retailer TFG (The Foschini Group), through its Labs division, is buying online shopping and delivery platform Quench to expand its e-commerce business. Many consumers are still opting to shop online and have goods delivered to their homes due to the Covid 19 pandemic. Quench knows how to adapt to change, as the company is among the liquor delivery services that moved to on-demand groceries and other essentials during the curfews when alcohol was banned. This acquisition gives us access to fast, reliable delivery across South Africa, while achieving greater delivery unit profitability.