South African Market Overview 9 February 2022

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

 

Local Market Update

  • The Johannesburg Stock Exchange’s Top 40 index closed 0.48% higher at 69,527 points yesterday, while the broader All-Share index gained 0.54% to 76,091 points. Financial companies, which typically benefit from a stronger rand, were among the day’s biggest gainers, with insurer Old Mutual leading the blue-chip index with a 3.6% rise. State-owned utility Eskom on Tuesday suspended planned power cuts introduced after more breakdowns in its ailing coal fleet.

     

  • The rand trended firmer in afternoon trading on Tuesday as power utility Eskom suspended its latest power cuts. The market also focused on U.S. inflation data due later in the week, which could trigger bets on faster rate hikes. At the close of trading, the rand was trading 1.01% firmer at R15.35 to the dollar. Locally, attention will soon turn to President Cyril Ramaphosa’s annual State of the Nation address in Parliament on Thursday, a speech he usually uses to announce reforms in key policy areas.

     

  • Gold prices today held near their two-week high reached in the previous session. Inflation risks and tensions between Russia and Ukraine supported the safe-haven metal despite the prospect of an aggressive rate hike by the Federal Reserve. Oil prices rebounded this morning after two losses after industry data showed an unexpected drop in U.S. crude oil and fuel inventories, offsetting concerns about a possible increase in supplies from Iran.

 

In Local News

 

SASOL LIMITED – trading statement

Sasol is expected to report mixed results for the six months ended December 31, 2021 (fiscal 2022). Improved Brent crude oil prices, refining margins and chemical prices led to a notable improvement in gross margin compared to the previous six months, combined with strong cost and investment performance. These benefits were partially offset by operational challenges in our South African value chains, which resulted in lower production, as reported in our Business Performance Metrics SENS announcement on January 25, 2022. Sasol’s adjusted earnings before interest, tax, depreciation and amortisation (adjusted EBITDA**) is expected to increase 66% to 76% to R30.9 billion to R32.7 billion in the six months to December 31, 2021, from R18.6 billion in the previous six months.

 

RCL FOODS LIMITED – Trading Statement

In accordance with the JSE Limited Listings Requirements, shareholders are advised that RCL FOODS expects earnings per share (“HEPS”) of between 69.0 cents (+15.6%) and 76.0 cents (+27.3%) for the six month period ending December 2021 (“Current Period”), compared to the reported HEPS of 59.7 cents for the six month period ending December 2020 (“Comparative Period”). Earnings per share (“EPS”) for the current period are expected to range from 70.0 cents (+13.6%) to 77.0 cents (+25.0%), compared to the reported EPS of 61.6 cents for the comparative period.