South African Market Overview 8 February 2022

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

 

Local Market Update

  • Local stocks closed higher yesterday, with the Johannesburg Stock Exchange’s Top 40 index up 0.76% to 69,198 points and the broader All-Share index up 0.63% to 75,680 points. Among the day’s biggest gainers were exporters such as mining companies BHP Group, Anglo American and Glencore, whose exports will become more competitive as the rand falls. On the data front, January business confidence data is due on Wednesday, with mining and manufacturing figures for December on Thursday.
  • The rand weakened against a stronger dollar in afternoon trading Monday, as domestic headwinds also weighed when power utility Eskom announced the resumption of planned power cuts just hours after suspending them. The rand was trading around R15.51 to the dollar at the close of trading, 0.34% weaker. Investors were awaiting the release of local economic data, including mining and manufacturing figures for December, as well as President Cyril Ramaphosa’s State of the Nation address due this week.
  • Gold prices held steady this morning as inflationary pressures kept the safe-haven metal near the previous day’s weekly high while market participants awaited U.S. inflation data, which is crucial to the Federal Reserve’s tapering timetable. Meanwhile, oil prices softened today ahead of the resumption of indirect talks between the U.S. and Iran. These could lead to a revival of the nuclear agreement, which could result in the lifting of sanctions on Iranian oil sales, increasing global supply.

 

In Local News

Telkom’s mobile growth slows ‘in difficult quarter’

Telkom said its mobile subscriber base grew only 10% year-on-year to 16.4 million in the fiscal third quarter. The number of prepaid customers increased by 12% and postpaid customers by 1.8%. The number of mobile broadband customers increased by 4%, also a significant slowdown from the 10.3% growth rate in the reporting period ended in September. Mobile data traffic grew 7.9% year-on-year to 246 petabytes, supporting mobile data revenue growth of 2.6% to R3.1 billion. “Despite the challenging environment, our postpaid customer base remained relatively flat at 2.6 million, with arpu (average revenue per customer) increased by 1.8% year-on-year to R215. The prepaid market remains the driver of new connections; the number of prepaid customers increased by 12% to 13.8 million,” the company said.

 

Price inflation for new vehicles declines sharply

The rate of price inflation for new vehicles fell sharply to 2% in the fourth quarter of 2021, compared with 9.6% in the same quarter of 2020, while inflation for used vehicles rose to 7.9% from 2.9% in the same period. This is according to TransUnion’s latest Vehicle Price Index SA. Kriben Reddy, vice president of TransUnion Africa Auto Information Solutions, said the index for new cars was last at this level in the fourth quarter of 2011, while the index for used cars has not been this high since the first quarter of 2004. TransUnion said the new vehicle price index, which effectively measures the rate of inflation for new vehicles, “maintained its free fall of the past 12 months in the final quarter of 2021, while used vehicles continued to become relatively more expensive in light of changes in consumer demand and supply.”