South African Market Overview 7 February 2022

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

 

Local Market Update

  • Johannesburg-listed stocks closed slightly higher on Friday, struggling to find direction on a typically quiet Friday with little turnover. The All-Share Index closed up 0.25% and the Top 40 Index was up 0.32%. This week, investors will turn their attention to the release of local data, including mining and manufacturing figures for December and the State of the Nation Address by President Cyril Ramaphosa on February 10.
  • The rand weakened on Friday, erasing the week’s gains, as the U.S. dollar was supported by better-than-expected labour market data. At the close of trading, the rand was trading R15.46 weaker against the dollar, or 1.09%. The euro traded near its three-week high from Friday this morning, following a monetary policy turnaround by the European Central Bank last week.
  • Gold prices rose this morning as mounting concerns about widening price pressures increased the metal’s appeal as an inflation hedge, helping to cushion pressure from higher U.S. Treasury yields following a surprisingly upbeat jobs report. Meanwhile, oil prices rose this morning, reversing earlier losses, as investors maintained expectations that global supply would remain tight amid rising demand and ignored signs of progress in nuclear talks between the U.S. and Iran.

 

In Local News

 

Hudaco buys Cadac gas products brand, reports strong results

JSE-listed importer Hudaco Industries, after reporting strong annual results for the year ending November 2021, announced that it has signed agreements to buy well-known barbecue, gas and electronic appliances brand Cadac for around R100 million. Cadac is a South African brand known for its wide range of gas products for cooking, heating, lighting and grilling, as well as gas cylinders, ovens and heaters. Hudaco reported an increase in its final dividend to 520 cents per share, bringing its total dividend for the year to 760 cents, a 27% increase over 2019 and a record payout for the company. The company also reported a 21% increase in earnings per share.

Ministries of health, education, housing and public works fail 2021 audits

The South African Institute of Chartered Accountants (Saica) and the Auditor-General South Africa (AGSA) hosted a panel discussion on Friday, Feb. 4, on the results of the Public Finance Management Act (PFMA) 2020/2021 on the results of the audits. Only 117 of 425 (27%) audited entities received a clean audit (2020: 109 of 418; 26%). State agencies (SOEs) and the major service departments of health, education, housing, and public works are lagging. Four received unqualified audits with findings. Irregular expenditures reported in financial statements increased to R166.85 billion (2020: R109.82 billion). High levels of useless and wasteful spending continue, with 224 audited entities losing a total of R1.72 billion in the current year.