Taking Stock - Oil prices hovered near a six-week high.

In todays taking stock, we look at how the Oil prices hovered near a six-week high, on signs another storm could affect output in Texas this week.

Research Team

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Sasfin Wealth
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MARKET COMMENTARY

SOUTH AFRICAN MARKET COMMENTARY

Shares on the Johannesburg-based stock exchange were lifted as the government eased local restrictions, and Wall Street, on which almost 80% of the local market is indirectly linked, stayed upbeat. The benchmark all-share index went up by more than half a percentage point to end the day at 64,652 points and the blue-chip index of top 40 companies closed up 0.55% to 58,495 points. The market was lifted by mining companies with the resources index up 1.77%. The local economy-linked stocks such as banking and financials added to the gain with the bank index closing up 1.18%.

 

 

EUROPEAN MARKET COMMENTARY

European stocks closed higher on Monday, with investors continuing to weigh up the European Central Bank’s latest policy decision and inflation data. The pan-European Stoxx 600 provisionally ended the session up 0.3% after the benchmark slumped 1.2% last week. Oil and gas stocks led the gains on Monday, adding 2.8%. European traders continued to digest the European Central Bank’s decision last week to slow down bond-buying under its pandemic emergency purchase programme (PEPP) in response to higher inflation and stronger GDP growth across the euro zone.

 

 

US MARKET COMMENTARY

The Dow Jones Industrial Average gained Monday as the index rebounded from a five-day losing streak. The Dow rose 261.91 points, or 0.8%, to 34,869.63. The S&P 500 closed up 0.2% at 4,468.73. The two major indexes both finished the day positive for the first time in the past six sessions. Inflation fears have contributed to the market’s recent losses. Data released Friday showed that producer prices rose 0.7% in August and 8.3% year over year, which was the biggest annual increase since records were first kept in November 2010.

 

 

ASIAN MARKET COMMENTARY.

Shares in Asia-Pacific were mixed in early morning trade today as investors look ahead to the release of U.S. consumer inflation data for August. In Hong Kong, China Evergrande Group’s stock plunged more than 6% after the embattled property developer on Tuesday flagged expectations for a “significant continuing decline in contract sales in September,” with dampened confidence after negative media reports surrounding the firm.

 

 

 

CURRENCY MARKET COMMENTARY

The rand gained on Monday, benefiting from an easing of local coronavirus lockdown restrictions. At the end of the session, the rand was trading around R14.14 to the dollar or 0.47% firmer. President Cyril Ramaphosa announced the loosening of restrictions in a televised address on Sunday, shortening a nationwide curfew and extending the hours of alcohol sales as new infections decline. South Africa has been the worst-hit on the African continent in terms of reported COVID-19 cases and deaths, with its economic recovery hampered by a slow start to its vaccination campaign.

 

 

COMMODITIES MARKET COMMENTARY

Gold prices edged lower this morning as a stronger dollar crimped bullion’s appeal ahead of U.S. inflation data that could offer cues on the possible timeline for the Federal Reserve’s tapering. Oil prices extended gains earlier today, hovering near a six-week high, on signs another storm could affect output in Texas this week even as the U.S. industry struggles to return production after Hurricane Ida wreaked havoc on the Gulf Coast.

LOCAL COMPANIES

REMGRO LIMITED (REM) +1.6%

Shareholders are advised that Remgro’s headline earnings per share (“HEPS”) from continuing operations for the year ended 30 June 2021 is expected to be between 494.2 cents and 524.9 cents compared to the HEPS from continuing operations of 307.5 cents reported for the year ended 30 June 2020 (an increase of between 61% and 71%). The headline earnings from continuing operations for the comparative year ended 30 June 2020 were significantly impacted during the second six months to 30 June 2020 by the Covid-19 pandemic and the resultant lockdown measures as well as by a once-off donation of R500 million to The South African SME Relief Trust. From this low base, the expected increase in headline earnings from continuing operations for the year ended 30 June 2021 is mainly due to the recovery of the earnings of most of Remgro’s underlying investee companies. This expected increase is partly offset, mainly by a lower contribution from Mediclinic International plc (“Mediclinic”) (Mediclinic’s contribution includes the full impact of the Covid-19- related lockdown measures on its results for the year ended 31 March 2021). However, total HEPS is expected to be between 494.2 cents and 524.9 cents compared to the reported HEPS of 560.6 cents for the year ended 30 June 2020 (an expected decrease of between 6% and 12%).

 

ATTACQ LIMITED (ATT) -2.1%

Shareholders are referred to Attacq’s distributable income per share (“DIPS”) of 73.0 cents for the year ended 30 June 2020 (“prior financial year”), previously reported as 73.1 cents and subsequently updated in accordance with the SA REIT Association Best Practice Recommendation Second Edition adopted by Attacq for the year ended 30 June 2021 (“current financial year”), and its dividend per share (“DPS”) of 45.0 cents for the prior financial year. The DPS for the prior financial year comprised an interim dividend in respect of the period ended 31 December 2019 with no final dividend having been declared after due consideration by the board of directors of Attacq’s capital structure and liquidity, and taking into account the uncertainty regarding the continuing impact of COVID-19, and the weak economy. Attacq advises that DIPS for the current financial year is expected to be 46.8 cents, a decrease of 35.9% when compared with the prior financial year. The decrease is primarily attributable to the non-receipt of dividends from its investment in MAS Real Estate Inc as compared with R233.6 million received in the prior financial year (45.4% of distributable income). The South African operations have performed well in the current year, growing its DIPS by 22.5%, led by the Waterfall City portfolio which grew by 30.6%. No contribution to DIPS was received from its Rest of Africa retail investments.

 

 

INTERNATIONAL COMPANIES

Toast

Toast is gearing up for an initial public offering next week that could value the restaurant-tech company at more than $16 billion. That’s about double its valuation from a secondary share sale last November. The company has taken a very uneven path to the New York Stock Exchange. Prior to the Covid-19 pandemic, Toast was thriving by selling technology to restaurants that helped them combine their payment systems with things like inventory management and multilocation controls for eateries with more than one site.

 

Taco Bell

The newest subscription service isn’t to stream TV shows or movies. It’s for Taco Bell’s tacos. Customers with the Taco Lover’s Pass can order one crunchy taco, soft taco, spicy potato soft taco or Doritos Locos taco per day for 30 days straight on the chain’s app. The cost of the pass ranges from $5 to $10 a month, depending on the location. The Yum Brands chain is testing the program across 17 locations in Tucson, Arizona. Other restaurant chains have also launched similar subscription programs, with mixed success. Restaurant Brand International’s Burger King launched a coffee subscription for $5 a month in 2019 to help promote its breakfast menu but discontinued it several months later.

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Research Team
Media, Sasfin Wealth