South African Market Overview 6 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 stocks traded lower on Friday as the JSE All Share index recorded a 0.3% decline, while the blue-chip Top 40 index closed 0.39% lower. Resources were the biggest drag, with the local J210 index shedding 1.56%. On the data front, South Africa’s private sector business activity recovered in November after staff in its biggest metal-workers union returned to work after striking in October, a survey showed on Friday. IHS Markit’s Purchasing Manager’s Index (PMI) jumped to a six-month high of 51.7 in November from 48.6 a month before, skipping back into expansionary
    territory after a month.
  • The rand steadied in early trade on Friday, struggling for momentum as some uncertainty over the Omicron coronavirus variant lingered. However, the rand was 0.93% softer against the dollar at the close of the session as it traded around the R16.09 mark. The continued spread of the
    Omicron variant globally has in recent days buoyed havens like the dollar and pressured riskier currencies.
  • Oil prices rose by more than $1 a barrel this morning after top exporter Saudi Arabia raised prices for its crude sold to Asia and the United States, and as indirect U.S.-Iran talks on reviving a nuclear deal appeared to hit an impasse. The price hikes were implemented despite a decision last week by the Organization of the Petroleum Exporting Countries and their allies including Russia, a group known as OPEC+, to continue increasing supplies by 400,000 barrels per day in January.

In Local News

MTN Group raises R2.4bn in undersubscribed Uganda IPO
MTN Group said the initial public offering of its Ugandan unit raised 535.94 billion shillings (R2.4 billion), less than two-thirds of its target. At least 2.9 billion shares were allotted out of the 4.5 billion shares that were offered, Kampala-based MTN Uganda said in a statement, without providing reasons for the undersubscription. The stake which Africa’s largest wireless carrier has in the unit was cut to 83.05% from 96% following the allotment. It will list on the Uganda Securities Exchange on Monday. The South African-based group had offered to cut its stake by 20% in line with regulatory requirements. Uganda and Kenya’s national social security funds, Duet Africa
Opportunities Master Fund IC, EFG Hermes Oman, First Rand Bank and local pension funds for the Ugandan central bank and tax authority were among the top buyers of stakes in MTN Uganda.

Absa expects annual profit to more than double
Absa expects annual profit to more than double in the year to December 31, it said on Friday, citing cost controls and lower bad debts. In 2020 the bank reported headline earnings per share, the main profit measure in South Africa, of 730.9 cents. It said it will give the expected range for 2021 soon. One of South Africa’s top four banks, Absa is bouncing back from hefty provisions taken last year due to the pandemic.