South African Market Overview 8 March 2022

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

 

Local Market Update

  • The local stock market fell, led by a decline in South Africa Inc. shares, commonly referred to as banking, retail and property stocks, which are dependent on the local economy. However, part of the decline was offset by a rise in the share prices of some commodity and resource companies, particularly gold miners. The benchmark All-Share index closed down 1.92% at 73,296 points and the blue-chip Top 40 index closed down 1.78% at 67,144 points. The biggest losers among blue-chip companies were the country’s five largest banks, whose banking index fell by more than 4%.
  • The rand recouped much of the previous day’s losses in afternoon trading Monday, as strong commodity prices supported the currency amid concerns about the impact of the Ukraine-Russia conflict on inflation and the global economy. At the close of trading, the rand was trading around R15.37 against the dollar, 0.14% firmer. On the data front, this week’s focus is on fourth-quarter 2021 gross domestic product data, which will be released later today, and January mining and manufacturing data on Thursday.
  • Gold prices slipped from the key $2,000 per ounce level this morning as the U.S. dollar held near a multi-month high, while palladium retreated from record highs after investors took a breather as talks between Russiaand Ukraine made little progress. Meanwhile, oil prices hovered near 14-year highs today as the United States considered going it alone to ban Russian oil imports instead of joining forces with allies in Europe, easing fears of a major crude supply disruption.

 

In Local News

 

MASSMART HOLDINGS LIMITED – Results

Massmart’s total sales of R84.9 billion in the 52 weeks to 26 December 2021 represent a decrease of 1.9% compared to the same period in 2020, while like-for-like sales increased by 1.7% in the same period. Gross margin decreased by 191 basis points to 18.5%. Excluding inventory write-downs due to the unrest, gross margin decreased 45 basis points to 19.9%.¬†Expenses decreased by 1.2% as a result of our sustained cost reduction initiatives. Other income increased 280.9% to R1.1 billion and primarily related to insurance proceeds from property damage and business interruption related to the civil unrest. This resulted in a trading profit of R195.4 million, a decrease of 83.3% from the previous year.

 

Discovery Bank targets one million accounts by June

One of South Africa’s newest banks is aiming to increase the number of its accounts to 1 million by June. Digital lender Discovery Bank saw a 31% increase in customer accounts to 850,000 in the first half of the year to December and is now aiming to add another 18% in six months. “That would really be a significant milestone for the company and I think reflects the fact that we are really gaining scale,” Chief Executive Officer Hylton Kallner said in an interview. The bank was founded in November 2018 by Johannesburg-based insurer Discovery Ltd. with the aim of using internet-based technology to compete with more established rivals.