Taking Stock - Tesla’s sales in China doubled.

In todays taking stock, we discuss how Tesla’s sales in China more than doubled last year.

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MARKET COMMENTARY

SOUTH AFRICA

Local stocks were higher yesterday, with the Johannesburg Stock Exchange's Top-40 Index ending the day up 1.31% and the broader All-Share Index closing 1.2% higher. Miners were the day's biggest winners, with Anglo American Platinum leading the charge after reporting it expected to see a 70% jump in annual earnings. Health Minister Zweli Mkhize said on Sunday the government would await advice from scientists on how best to proceed after a trial showed the AstraZeneca vaccine did not significantly reduce the risk of mild or moderate COVID-19 infection caused by the country's dominant coronavirus variant.

 

 

EUROPE

European stocks closed higher Monday with markets tracking positive sentiment in Asia and the US. The pan-European Stoxx 600 index ended the session 0.3% higher, with most sectors and major bourses in positive territory. No major European earnings were out on Monday. On the data front, German industrial production figures showed output was unchanged in December, weaker than the 0.3% gain forecast by economists.

 

 

US

US stocks climbed on Monday, building on a recent rally to record levels as investors remained optimistic about further COVID-19 stimulus and an economic recovery. The energy sector rallied more than 4% Monday as Brent crude futures, the international oil benchmark, topped $60 per barrel for the first time in more than a year. Treasury Secretary Janet Yellen urged Congress on Sunday to pass President Joe Biden’s stimulus plan, saying if it does the US could return to full employment by 2022.

 

 

ASIA

Stocks in Asia were mostly higher in early trade today following overnight gains on Wall Street that saw the major indices rallying to record closing highs. Mainland Chinese stocks nudged higher in early trade, with the Shanghai composite rising slightly and the Shenzhen component gaining 0.57%. Hong Kong’s Hang Seng index advanced 0.16%.

 

 

 

CURRENCIES

The rand weakened on Monday after the country's COVID-19 vaccination plan suffered a setback over the weekend as the government put on hold the use of AstraZeneca's shot. Worse-than-expected US jobs data last week also put the skids on global risk demand as investors assessed the speed of a global economic recovery and the timing of a stimulus package from the world's biggest economy. At the close, the rand was 0.25% weaker, at R14.88 per dollar. The local currency was trading around R14.81 to the dollar this morning.

 

 

COMMODITIES

Oil prices edged up this morning to their highest in 13 months as supply cuts by major producers and optimism over fuel demand recovery support energy markets. Additional supply reductions by top exporter Saudi Arabia in February and March, on top of cuts by producers in the Organization of the Petroleum Exporting Countries and their allies, are tightening supplies and balancing global markets. Gold prices rose to a near one-week high this morning as the dollar faltered and expectations firmed that a massive US fiscal stimulus to revive the world's largest economy will soon be passed.

LOCAL COMPANIES

Telkom (TKG) +12.3%

Telkom, South Africa’s leading landline operator, said on Monday group revenue for the nine months ending December 31 climbed 0.9%, driven by a 40.7% rise in mobile service revenue. The news sent shares up 7.6% to R39.74 rand at the open. Group revenue rose to R32.4 billion ($2.18 billion) from R32.1 billion in the same period a year earlier, said the partly state-owned company, which is also the country’s third biggest mobile service provider said in a statement. Group revenue growth compares with a fall of 0.4% reported in the first half to September 30 thanks to a slight recovery in the economy in the third quarter as the country lifted the majority of lockdown restrictions, Group Chief Executive Sipho Maseko said. The consumer business, which houses Telkom’s mobile business, continues to be the driver of growth due to increased demand for connectivity from millions of South Africans working and studying from home due to Covid-19 lockdowns. This saw mobile data revenue, which contributes over 70% of mobile service revenue, growing by 46.2%, driven by strong growth in mobile traffic of 64.4% and a 27% growth in mobile broadband customers to more than 10 million. Overall mobile service revenue grew to R12.6 billion from R8.9 billion in the prior period. Telkom is branching out of its declining fixed-line telephone business with heavy investment in its mobile phone unit, taking on leading operators Vodacom and MTN.

INTERNATIONAL COMPANIES

TESLA (TSLA) +1.3%

Tesla’s sales in China more than doubled last year amid the coronavirus pandemic, according to a filing out Monday. The electric car maker’s sales in China of $6.66 billion last year accounted for about a fifth, or 21% of the $31.54 billion total. In 2019, Tesla’s China sales reached $2.98 billion, just 12% of the $24.58 billion total. The US remained Tesla’s largest market, with sales rising 20% last year to $15.21 billion and accounting for roughly half of total sales. Tesla began ramping up production last year at its factory in Shanghai and selling China-made cars to the local market. The company’s Model 3 was the best-selling electric car in the country in 2020, according to China’s Passenger Car Association. The automaker also began deliveries of a new model, a China-made Model Y, to local customers this year. However, Tesla faces competition in the local market from Chinese electric car start-ups like Nio and Xpeng, while regulatory scrutiny has increased.

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Media, Sasfin Wealth

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