South African Market Overview 9 December 2021

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

 

Local Market Update

  • The major indices on the Johannesburg Stock Exchange pulled away from record highs reached in the previous session amid local data. The benchmark All-Share index closed 0.72% lower at 72,403 points, while the blue-chip Top 40 index ended 0.78% lower at 65,992 points. Retail sales rose 1.8% year-on-year in October, slightly lower than the 2.1% rise in September, Statistics South Africa reported on Wednesday. Data on South African business confidence, which fell in November from the previous month as both exports and imports declined, also weighed. The rand extended last week’s gains on Wednesday as signs that the variant of the Omicron coronavirus identified locally and in Hong Kong is causing mainly mild infections boosted risk appetite.
  • At the close of trading, the rand was trading R15.72 firmer against the dollar, or 0.8%. Financial markets were very sensitive to news of Omicron, which South Africa warned the world about last month, leading to global alarm and the imposition of travel restrictions. However, anecdotal reports from South African doctors and researchers suggest that the virus causes less severe clinical symptoms than other variants of the coronavirus.
  • Gold prices were unchanged this morning as the U.S. dollar and U.S. Treasury yields rallied ahead of key inflation data that could shed light on the Federal Reserve’s next move. Oil prices extended gains today on confidence that the variant of the Omicron coronavirus would not hurt global growth, even as some governments tightened measures to stop the rapid spread of the virus. The Omicron virus outbreak triggered a 16% plunge in Brent prices between November 25 and December 1. More than half of that drop was recovered this week.

 

In Local News

 

Why Aveng’s share price shot up more than 45 000%

The share price of JSE-listed construction and engineering group Aveng shot up by more than 45 000% at times on Wednesday. This steep rise in Aveng’s share price is linked to the restructuring of the group’s authorised and issued share capital through the consolidation of 500 shares each into one share, which took effect when trading opened on the JSE on Wednesday. The share consolidation resulted in the 62.26 billion issued Aveng ordinary shares being reduced to 124.5 million shares, while the 2.47 billion issued Aveng Class A shares decreased to 4.9 million A shares. Aveng shares fell 9.37% on Wednesday to close at R27.19 per share, compared with Tuesday’s closing price of R30 per share.

RMI shares rise 9% thanks to R8.7bn gain on sale of UK insurer Hastings

JSE-listed Rand Merchant Investment Holdings Limited (RMI) announced in a Sens update on Wednesday that it had made a profit of R8.7 billion from the successful sale of its 30% stake in UK short-term insurer Hastings Group to Nordic insurance group Sampo. The market reacted positively to news of the sale and RMI’s share price jumped as much as 9% to R45.99 since the stock market opened. RMI sold its stake in Hastings, which it held jointly with OUTsurance, to Sampo for R14.6 billion. The group had acquired the stake in Hastings in December 2016. RMI CEO Herman Bosman said the company saw the sale of its stake in the insurer as an opportunity to create value for RMI shareholders.