In todays taking stock, we discuss howWaterfall City developer Attacq has now sold over R1.2bn in MAS.
6 reading min
03 Jun 2021
SOUTH AFRICAN MARKET COMMENTARY
Local stocks continued their upward movement with the main index racing past its all-time peak seen in early May to hit a record on Wednesday, as raging growth prospects in the US boosted industrials and financial stocks. The FTSE/JSE All-Share index ended up 0.18%. The blue-chip Top 40 index, often a gauge of the performance of the best of the listed companies, was up 0.14%.
EUROPEAN MARKET COMMENTARY
Stock markets in Europe closed mostly higher on Wednesday as investors weighed up optimism over the region’s economic recovery and fears over rising inflation. The pan-European Stoxx 600 ended the session up almost 0.3%, with autos shares rising 1.3% to lead gains as most sectors and major bourses closed in positive territory. Euro zone producer prices climbed by more than expected on April on the back of a surge in energy prices, the EU statistics office revealed Wednesday. Factory prices across the bloc rose by 1% month-on-month and 7.6% annually, slightly exceeding economist expectations.
US MARKET COMMENTARY
Stocks rose slightly on Wednesday with the S&P 500 hovering near an all-time high. Energy stocks again outperformed the broader market on Wednesday as crude prices continued their recent rebound. Investors have snapped up shares of some of the nation’s largest oil and gas companies in recent sessions as optimism about the economic rebound in the US fosters demand for crude, airfare and other travel-related assets.
ASIAN MARKET COMMENTARY.
Shares in Asia-Pacific were mostly higher this morning, as investors reacted to data releases in Australia and China. A private survey released Thursday showed slowing Chinese services activity growth in May. The Caixin/Markit services Purchasing Managers’ Index for May came in at 55.1 on Thursday, lower than the reading of 56.3 in April. Still, that was well above the 50 level that separates expansion from contraction. Australia’s retail sales rose 1.1% month-on-month in April on a seasonally adjusted basis.
CURRENCY MARKET COMMENTARY
The rand rallied to its highest in more than two years against the dollar on Wednesday, as investors cheered the latest evidence of a sustained rebound in global economies and as US Treasury yields pulled back. At the close, the rand was 1.7% firmer at R13.53 versus the dollar. With the local economy remaining weak and facing power cuts, the rand's recent rally has been mainly on the back of global factors, including higher commodity prices which benefit resource-rich South Africa and expectations US lending rates will stay lower for longer.
COMMODITIES MARKET COMMENTARY
Gold prices inched lower this morning as a slight uptick in the dollar offset support from lower Treasury yields, while investors awaited key US economic readings this week for more clarity on monetary policy. Oil prices rose for a third day today on expectations for a surge in fuel demand, particularly in the United States and Europe and China, later this year at the same time major producers are maintaining supply discipline. The consensus among market forecasters, including the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, is that oil demand will exceed supply in the second half of 2021, which has spurred the recent run in prices.
Waterfall City developer Attacq has now sold over R1.2bn in MAS
JSE-listed real estate investment trust (Reit) Attacq is aggressively slashing its debt and loan-to-value (LTV) ratio with the announcement of yet another asset sale on Tuesday as it weathers the Covid-19 financial crunch. The group, which is the developer of the multi-billion-rand Waterfall City mega development in Gauteng and majority owner of Mall of Africa, revealed in a Sens statement that it has sold a further R328 million stake in MAS Real Estate to three South African fund managers. This follows the property counter selling two stakes in European-focused MAS in December 2020 and March this year, totalling R888 million. The R500 million December sale was to an Oppenheimer family-linked investment firm, while the March deal was with PKM Development Limited. Before the disposals, Attacq had a 20.7% stake in MAS, valued at R1.8 billion. This made it the biggest single shareholder in the offshore fund, which incidentally has a secondary listing on the JSE. The money from the sales largely goes towards paying off the South African Reit’s euro-denominated debt, which will go some way in also cutting the group’s gearing or LTV levels. Attacq’s LTV breached 46% in December 2020, prompting the group’s executives to approach its banks to lift the fund’s covenant level to 60%. Attacq’s latest sell-down of its MAS investment was at a discount, according to its Sens statement. “The disposal price of R16 per MAS share represents a 3% discount to the closing spot price of R16.50 as at 28 May 2021 [being the date prior to the agreement of terms] and a 3.7% discount to the 30-day volume weighted average share price of R16.61 on the same date,” it noted. This discount indicates something of a forced sale considering that Attacq and fellow JSE-listed Reit Hyprop are struggling to sell their jointly-owned rest-of-Africa assets at the moment.
Tesla failed to stop Musk tweets, says regulator
Tesla has allegedly repeatedly failed to pre-approve Elon Musk's tweets, despite the rules of a court order. In 2018, the US Securities and Exchange Commission (SEC) accused Mr Musk of misleading investors, after he made claims about taking Tesla private. An agreement was made requiring Tesla's lawyers to pre-approve certain tweets. But documents obtained by the Wall Street Journal suggest the regulator believes Mr Musk and Tesla have broken the terms of that deal. According to the newspaper, the SEC wrote to Tesla alleging that Elon Musk's Twitter account had violated the deal twice. One tweet made claims about Tesla's stock price "being too high", while the other made claims regarding the company's solar roof production. One of the terms of the settlement was that Tesla's lawyers must pre-approve tweets that relate to things such as production numbers, new products and the company's finances.
Amazon warehouse injuries '80% higher' than competitors, report claims
Employees at US Amazon warehouses are injured at a higher rate than those doing similar jobs at other companies' warehouses, a new report has found. A union-backed study of safety data found Amazon workers had 5.9 serious injuries per 100 people - almost 80% higher than the rest of the industry. The study's organisers blamed Amazon's "obsession with speed" as a main cause of the problem. It is the latest in a string of controversies around worker safety. Earlier this year, the company apologised for falsely denying that its drivers are forced to urinate in plastic bottles. That came alongside a wider string of allegations that employees both on driving routes and in warehouses are under too much time pressure to use bathrooms, which Amazon denies.
04 June 2021
7 reading min
Taking Stock - Prosus to acquire Stack Overflow for $1.8bn
In today's taking stock we discuss, Prosus has agreed to acquire Stack Overflow, a platform used by software developers, for US$1.8-billion (about R24.4-billion).
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