Taking Stock - Aspen could start production of the J&J vaccines.

In todays taking stock, we look at how Aspen could start production of the J&J vaccines by late March or early April if all approvals are in place.

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MARKET COMMENTARY

SOUTH AFRICAN MARKET COMMENTARY

Local stocks also firmed, with Aspen Pharmacare, which is producing the Johnson & Johnson Covid-19 vaccines in South Africa, leading the rally. Aspen climbed 3.34% after a senior company executive told Reuters on Thursday that the country's biggest pharmaceutical firm could start production of the J&J vaccines by late March or early April if all approvals are in place. The health ministry's announcement that negotiations on sourcing a vaccine are at an advanced stage with J&J, also boosted gains at Aspen. The All-Share index rose 0.76% and now stands at 63,519 index points, while the Top-40 index climbed 0.77%.

 

 

EUROPEAN MARKET COMMENTARY

European markets closed higher Friday as global investors anticipated that a Democratic-controlled US government will lead to greater fiscal support. The pan-European Stoxx 600 climbed 0.5%, with tech stocks jumping 2.4% to lead gains while autos bucked the trend to slide 0.6%. Germany’s DAX index notched a new record high on Friday morning. The Stoxx 600 also posted its best week in around two months, according to Reuters data, with a gain of 3%.

 

 

US MARKET COMMENTARY

US stocks regained their footing Friday, after initially pulling back in the wake of a jobs report showing that the US economy lost 140,000 jobs in December, well below forecasts for a gain of 55,000. The US unemployment rate remained unchanged at 6.7%, but data from the Labor Department report also suggests that a number of Americans left the workforce. The decline in employment was the first since last April, when the US lost a 20.8 million jobs in that one month alone.

 

 

ASIAN MARKET COMMENTARY

Asia-Pacific stocks were mixed, with South Korean stocks rising again on the back of big gains last week. South Korea’s Kospi, which had a stellar start to 2021 as it jumped nearly 10% in the first trading week of the year, shed earlier gains as it declined about 1%. Shares of automaker Hyundai Motor rose again on Monday following a local media report that the firm and Apple are set to sign a partnership deal on autonomous electric cars. China’s producer price index fell 0.4% in December as compared to a year earlier, according to the country’s Bureau of Statistics. Meanwhile, China’s consumer price index rose 0.2% year-on-year in December.

 

 

CURRENCY MARKET COMMENTARY

The rand firmed on Friday, as investors found some comfort in news that the country has secured Covid-19 vaccines for healthcare workers and that the rollout should start sooner than anticipated after criticism of delays. At the close, the rand was trading at R15.30 against the dollar, 0.99% firmer. Health Minister Zweli Mkhize said on Thursday the government would receive 1.5 million doses of AstraZeneca's shot from the Serum Institute of India, spread over January and February.

 

 

COMMODITIES MARKET COMMENTARY

Oil prices fell this morning on renewed concerns about global fuel demand amid strict coronavirus lockdowns in Europe and new movement restrictions in China, the world’s second-largest oil user, after a jump in cases there. Meanwhile, gold prices fell today, after slumping more than 4% in the previous session, as the dollar strengthened and US Treasury yields remained elevated, denting the non-yielding metal's appeal. A stronger dollar makes bullion more expensive for holders of other currencies, while higher bond yields increase the opportunity cost of holding the non-interest yielding gold.

LOCAL COMPANIES

Cartrack (CTK) +0.5%

Cartrack, whose shares more than doubled in 2020, plans to delist from the JSE and file for an initial public offering on the tech-heavy Nasdaq stock exchange in the US, the company announced on Thursday. The South African-founded telematics and vehicle recovery specialist, which owns its own software assets and which now operates in 23 countries, believes the proposed scheme, if approved, will unlock value for shareholders, particularly those who elect to stay invested in a new holding company vehicle. Singapore-registered Karooooo (formerly Karoo), the controlling shareholder in Cartrack, will buy out minority shareholders in the business — though shareholders have the option of effectively swapping their Cartrack shares for shares in Karooooo). Karooooo is currently wholly owned by Cartrack founder and CEO Zak Calisto. In effect, Cartrack and Karooooo have reached an agreement in terms of which the latter has made an offer, valued at just over R4 billion in total, to acquire the shares it doesn’t already hold in Cartrack. Cartrack shareholders will be given the opportunity to remain invested, through Karooooo, in the “long-term value, benefits and strong growth opportunities of the Cartrack Group, in the event that the proposed transaction becomes operative”.

 

Anheuser-Busch InBev (ANH) -2.6%

The South African Breweries (SAB) has suspended commitments to retain workers and investments, agreed as part of its merger with Anheuser-Busch InBev, due to the country’s decision to ban alcohol sales to curb the coronavirus, it revealed in court papers. South Africa banned alcohol sales late last month as part of tighter restrictions to rein in the spread of Covid-19. SAB has told the South African government that “its obligations have been suspended with effect from the date of the impugned regulations,” the company said in court papers filed on Wednesday and seen by Reuters on Friday. The conditions of the $106 billion merger require SAB to maintain an aggregate headcount of 5,967 workers in South Africa and that AB InBev make a R1 billion investment in the country in five equal instalments of 200 million rand over a period of five years from the merger agreement.

 

 

INTERNATIONAL COMPANIES

Deutsche Bank -0.7%

Deutsche Bank entered into a deferred prosecution agreement with federal prosecutors who allege the bank violated anti-bribery laws while doing business abroad. The bank has agreed to pay more than $100 million in penalties, prosecutors announced Friday. The German bank entered into the agreement with Brooklyn federal prosecutors remotely. The criminal complaint charges the bank with two counts including conspiracy to violate the Foreign Corrupt Practices Act and wire fraud conspiracy affecting a financial institution. The agreement does not include mention of any connection to an investigation by Manhattan federal prosecutors into whether President Donald Trump misled or defrauded Deutsche Bank by inflating the value of some of his assets. But it does say that Deutsche Bank would "cooperate fully" with other investigations. The Bank has loaned the Trump Organization more than $300 million, and CNN reported that the private bankers who worked with Trump and son-in-law Jared Kushner resigned weeks before Trump's last day in office. The bank did agree to "cooperate fully" with federal prosecutors in any matters currently under investigation.

 

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