South African Market Overview 5 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 was down 0.63% yesterday, while the Top 40 Index was down 0.75%. In the local government elections announced yesterday, South Africa’s ruling African National Congress (ANC) party won 46% of the vote after the final count. This was the party’s worst election result since it came to power at the end of white minority rule in 1994. Voters punished the party for corruption and poor basic services in areas that are traditionally ANC strongholds.
  • The Rand weakened on Thursday ahead of the announcement of local election results later in the day. The country’s ruling party is expected to post its worst election result in the country’s history. The rand rose after the results were announced, closing R15.20 firmer against the dollar, or 0.37%.
  • Oil prices rose more than 1% this morning, partially recovering after OPEC + producers rejected U.S. demands to increase supply and instead stuck to their plans for a gradual return of production halted by the pandemic. The OPEC + group of major producers agreed on Thursday to stick to its plan to increase oil production by 400,000 barrels per day (bpd) from December, ignoring calls from US President Joe Biden for an increase in output. President Joe Biden, who called for additional output to cool rising prices. Meanwhile, gold prices were trading slightly higher this morning. This follows a 1.24% rise in the precious metal yesterday.

 

In Local News

MTN in great shape – group revenue up 19%
MTN Group has reported a 19.1% increase in service revenue for the nine months to the end of September 2021, driven by strong growth in data (up 34.5%) and fintech (up 35%). Group earnings before interest, tax, depreciation and amortisation (Ebitda) increased by 24.1% and Ebitda margin increased to 45% from 42.9% in the same period last year. MTN South Africa recorded a 7.7% increase in service revenue with an Ebitda margin of 41.6% (39.3%), while the group’s Nigerian business recorded a 23.5% increase in service revenue with an Ebitda margin of 52.6% (51.1%). While subscribers increased by only 200,000 to 271.9 million, this figure would have been higher had it not been for the new sim registration rules in Nigeria.

ANC gets 46% in local elections, worst result ever
South Africa’s ruling African National Congress (ANC) received 46% of the vote in this week’s local government elections, according to the final count on Thursday. This is the party’s worst election result since it came to power at the end of white minority rule in 1994, with voters punishing the party for corruption and poor basic services in areas that have traditionally been strongholds of ANC. With a result of less than 50% of the vote, there is a possibility, albeit still slim, that South Africa could be ruled by a party other than ANC in the not too distant future. A decade ago, it would have been unthinkable that Nelson Mandela’s hereditary party could be in opposition. According to the figures of the Electoral Commission, the biggest competitor of the ANC, the Democratic Alliance (DA), is in second place with 22% of the vote and the Economic Freedom Fighters (EFF) in third place with 10%.