South African Market Overview 5 January 2022

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

 

Local Market Update

 

  • The Johannesburg Stock Exchange woke up on Tuesday after a subdued start to 2022 the previous day as investors looked for yield. The all-share index ended 1.8% higher at 75,052 points and the blue-chip index of the 40 largest companies closed 2.05% higher at 68,399 points, mirroring gains on Wall Street. The local rally was mainly driven by financials and a 2.5% rise in index heavyweight Naspers, which had lagged the broader market over the past year. Some analysts still see South African stocks as cheaper than peers despite a near 25% rise in 2021.

     

  • The rand fell on Tuesday after the U.S. dollar hit a five-year high as investors bet that the Omicron coronavirus variant would not upset the global economy or delay expected interest rate hikes by the Federal Reserve. At the close of trading, the rand was trading around R16.01 against the dollar, 0.92% weaker. With South Africa’s economic data calendar relatively thin this week, with a purchasing managers survey later in the day and foreign reserves figures on Friday, the rand is likely to continue to take its cues from global influencers.

     

  • Oil prices rose on Tuesday as investors expected OPEC + producers to stick to their planned February production increase amid signs Omicron would have little impact on demand. Gold prices rose on Tuesday as demand for the safe-haven metal was boosted by concerns about a rise in COVID -19 the Omicron variety that could threaten the global economic recovery. Both gold and Brent crude oil edged higher this morning.

 

In Local News

 

SAB may require employees to have Covid 19 vaccinations

South African Breweries (SAB), part of Anheuser-Busch InBev, said on Tuesday it will make Covid-19 vaccination mandatory for its employees. This makes it the latest company in South Africa to consider such a move. South African companies such as telecommunications provider MTN Group, insurers Discovery and Old Mutual, and Dis-Chem Pharmacies have already said they would require their employees to have Covid-19 vaccinations, potentially leading to legal problems. President Cyril Ramaphosa said in November that the government was considering making Covid-19 vaccination mandatory for access to certain places and activities.

 

Adapt IT to be acquired by Volaris, approvals met

Volaris Group has acquired Adapt IT Holdings for R7 per Adapt IT share, effective January 3, 2022. According to a statement released on Tuesday, all conditions and regulatory approvals have been met, including from various competition authorities, the Takeover Regulation Panel and the JSE. The statement indicates that Volaris has acquired 63.87% of Adapt IT (the transaction was conditional on Volaris acquiring more than 50%). “As a result of the completion of the transaction, Adapt IT will be delisted from the JSE with effect from 4 January 2022.