LOCAL MARKET COMMENTARY

Shares on the Johannesburg Stock Exchange experienced a 1% decline, impacting both the broader All Share index and the blue-chip Top 40 index with the former closing at 73,908. Additionally, JSE-listed company Mondi announced the sale of its primary Russian facility, Mondi Syktyvkar, along with two related entities, for approximately €775 million (around R15.7 billion). Meanwhile, RFG, the owner of Bull Brand, reported a 10% increase in revenue for its current financial year, primarily driven by significant price hikes, although sales volume decreased.

EUROPEAN MARKET COMMENTARY

European stock markets experienced a significant decline at the beginning of the trading week as investors awaited central bank decisions. The pan-European Stoxx 600 index dropped by 1.18%, with all sectors showing losses. The health care, travel, and banking sectors led the decline, each falling by approximately 1.8%. Slovakian central bank chief Peter Kažimír also cautioned against the belief that the European Central Bank had concluded its interest rate increases after Thursday's hike.

US MARKET COMMENTARY

On Monday, US stocks finished nearly unchanged as investors prepared for the Federal Reserve's upcoming meeting. The market indicates a 99% probability that the central bank will maintain its current stance when announcing its rate decision on Wednesday, according to the CME Group's FedWatch tool. Meanwhile, Ford's stock declined by over 2% due to the ongoing United Auto Workers' strike, with Stellantis and General Motors, also involved in the labour dispute, each experiencing losses of more than 1%.

ASIA MARKET COMMENTARY

Asian stocks tumbled today, driven by concerns about the Chinese real estate sector, impacting markets across the region from Hong Kong to Australia. Japanese investors, returning from a holiday weekend, sold off chip stocks. However, there was a glimmer of positivity as Country Garden received creditor approval to extend repayment on its final onshore bond out of a series of eight, causing its stock to rise by approximately 1%. Conversely, property services provider Country Garden Services Holdings was among the poorest performers on the Hang Seng, with a drop of around 2%.

COMMODITY MARKET COMMENTARY

Gold prices reached a two-week high today as the dollar weakened from its recent six-month highs, ahead of this week's central bank meetings starting with the U.S. Federal Reserve. In another market development, oil prices increased for the fourth consecutive session due to concerns over a supply deficit caused by prolonged production cuts by Saudi Arabia and Russia, along with weak shale output in the U.S. Saudi Arabia's Energy Minister, Prince Abdulaziz bin Salman, expressed support for OPEC+ cuts, emphasizing the need for measured regulation in international energy markets to control volatility.

CURRENCY MARKET COMMENTARY

The South African rand remained stable against a weakening dollar on Monday, with upcoming local and international interest rate announcements generating uncertainty. The euro held onto its earlier gains following hawkish statements from European Central Bank (ECB) officials, while the yen remained near a 10-month low ahead of a significant rate decision by the Bank of Japan (BOJ) later in the week. Currency markets in Asia exhibited subdued movements as investors remained cautious in anticipation of a series of central bank meetings this week, with the Federal Reserve taking the spotlight globally and the BOJ becoming the focal point in Asia.

OCEANA GROUP (OCE) -0.13%

Lucky Star's canned fish sales in Africa for the 11-month period rose by 8% to 8.7 million cartons, driven by the ongoing demand for affordable, shelf-stable protein. However, sales volumes in the last five months dropped by 5% compared to the previous year due to normalized supply levels. Despite an increase in selling prices and a reduction in freight costs, rising energy, tin can, and tomato paste expenses, along with a weaker rand, affected overall costs. Local canning production increased by 15%, and higher inventory levels were maintained to meet expected strong demand. In the South African fishmeal and fish oil sector, strong pricing and a weaker rand led to a 32% increase in average rand selling prices, but sales volumes were 8% lower due to adverse weather conditions. Loadshedding costs of R28 million were incurred. In the US, fishing conditions were affected by above-average water temperatures and low river levels. Fishmeal and fish oil sales volumes increased, driven by lower Peruvian supply and stable global demand, leading to price increases. The weaker rand and insurance proceeds contributed to a better performance. Horse mackerel sales were stable, while hake sales decreased due to operational upgrades. The sale of the cold storage business generated a profit of R480 million, which was used to reduce debt. Capital expenditure increased to R390 million, mainly for vessel and facility upgrades. Further investments are planned for the fishing fleet and production facilities in South Africa. Audited results are expected on November 27, 2023.

RFG HOLDINGS (RFG) +0.93%

RFG (Regional Food Group) reported a 10.0% increase in revenue for the 11 months ending in August 2023, driven by a 13.5% price inflation as they worked on recovering higher input costs incurred over the past two years. Despite challenges in the trading environment, including reduced consumer spending and increased competitor promotions leading to a 7.7% decline in overall group volumes, foreign exchange gains contributed 3.5% to revenue growth, and the acquisition of Today added 1.1%. In the regional segment, they achieved a balance between price and volume, with a 6.0% decline in volume, but the rate of decline improved from the first half of the year. The pie and ready meals categories performed well, while canned fruit and vegetable categories faced pressure. Internationally, revenue grew by 6.7%, but a decline in volumes offset strong prices and the weaker Rand. Operational issues at the Cape Town port affected export shipments, and load shedding challenges were managed through generator installations and solar energy solutions. The group's annual financial results for the year ending September 2023 will be released in November 2023. Please note that this information has not been audited by an independent external auditor.

X

Elon Musk has suggested the possibility of implementing a payment system for users of X (formerly Twitter) during a conversation with Israeli Prime Minister Benjamin Netanyahu. Musk argued that such a system could help combat the issue of bots on the platform. He mentioned, "We're moving to having a small monthly payment for use of the system." However, it remains uncertain whether this was a casual remark or indicative of concrete plans yet to be officially announced by X. Musk has previously advocated for charging for verification as a solution to address fake accounts and bots on the platform. Under his leadership, Twitter introduced an enhanced service known as X Premium, encouraging users to subscribe by offering additional features like longer posts and increased visibility. Further details from X are awaited.

Country Garden (2007) -1.89%

Chinese developer Country Garden has received approval from its creditors to extend the maturity of another onshore bond, marking the last in a series of eight bonds for which the company sought extensions. The 492-million-yuan ($67 million) bond, issued by a Country Garden subsidiary, had faced multiple delays in voting before creditors voted in favour of the extension. The bond's maturity has been extended by three years, and the issuer, Guangdong Giant Leap Construction Co, will provide a pledged guarantee of no less than 200 million yuan as part of the agreement. Country Garden's financial difficulties have had an impact on the Chinese property sector, and the company had previously proposed extending the maturities of eight onshore bonds worth 10.8 billion yuan, with seven of them receiving creditor approval last week.

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