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Local Market Update
- The benchmark All-Share index closed up 2.71% at 72,939, while the blue-chip Top 40 index closed up 2.96% at 66,513, both at record highs. The local market was buoyed by news of China’s new stimulus measures and easing fears over the Omicron vote. The major indices on the Johannesburg Stock Exchange beat all previous records to post their best day since March.
- The rand weakened on Tuesday as data showed the economy contracted more than expected in the third quarter after July’s unrest hit output. At the close of trading, the rand was trading R15.85 firmer against the dollar, or 0.45%. The economy contracted 1.5% in the third quarter, suffering from the worst unrest of the post-apartheid era that affected sectors such as agriculture, industry and trade. More recent indicators suggest that the economy was already struggling to recover before the emergence of a fourth wave of coronavirus, triggered by the Omicron variant.
- Gold prices edged higher today as U.S. Treasury yields retreated from recent highs, reducing the metal’s opportunity cost, while investors looked ahead to key inflation data that could determine the path of interest rates. Meanwhile, oil prices edged lower this morning, reversing gains from earlier in the week, as investors tried to assess the full impact of the Omicron coronavirus variant on global fuel demand and the effectiveness of existing vaccines.
In Local News
Sygnia performs despite ‘turbulent’ economic environment
Shares in listed fund manager Sygnia closed up over 4% (at R18 per share) on Tuesday after the group, founded by Magda Wierzycka, reported strong performance for the financial year to the endof September 2021. Sygnia itself has become one of South Africa’s largest asset managers since its inception in 2006 and listing on the JSE in 2015, setting the bar high. Assets under management and administration increased by almost 18% to R296.4 billion (2020: R251.8 billion). Revenue increased by 11,5% from R661 million to R737,2 million. Profit after tax reached R240,9 million (an increase of almost 17% compared to R206,1 million in 2020). Earnings per share increased by 16.6% to 170.7 cents (2020: 146.4 cents). The dividend was increased to R1.35 per share from R1.10 paid in the previous year.
Tencent invests in TymeBank
Chinese internet giant Tencent Holdings has invested in South African digital bank TymeBank. CDC Group has also invested to take the bank’s Series B capital raising to US$180 million (R2.9 billion). Tencent and CDC’s investments amount to an additional US$70 million, TymeBank said in a statement on Tuesday. CDC Group is the UK’s development finance institution. The closing of the investments is subject to customary conditions precedent and regulatory approvals. Tyme, which has roots in South Africa, is using the Series B funding to expand TymeBank locally and to fund GOTyme in the Philippines, where it has secured a digital bank licence in partnership with Philippine conglomerate Gokongwei Group.