Taking Stock - The JSE reached an all-time high on Monday.

In todays taking stock, we look at discuss how The Johannesburg Stock Exchange reached an all-time high on Monday.

article image

MARKET COMMENTARY

SOUTH AFRICA

The stock market firmed, reaching all-time highs on Monday, as optimism about the rollout of COVID-19 vaccines boosted global market sentiment. The benchmark JSE All-Share index climbed 1.22%, reaching an all-time record, while the blue-chip JSE Top-40 index ended up 1.65% to an all-time peak. Among the gainers were Sasol, which rose 1.48% on the back of a higher oil price and Steinhoff, which jumped 22.87% after its former auditor Deloitte agreed to pay $85 million to settle certain claimants as part of the retailer's proposed $1 billion global lawsuit settlement plan.

 

 

EUROPE

European markets closed higher on Monday, with successful vaccine rollouts fuelling hopes of a global economic recovery. The pan-European Stoxx 600 closed up 1.4%, with media stocks surging 4.2% to lead the gains amid a sharp rise in shares of Vivendi. In other news, the UK has now issued a first Covid-19 vaccine dose to more than 15 million people across all four of its top priority categories, in what Prime Minister Boris Johnson described over the weekend as an “extraordinary feat.”

 

 

US

The US stock market was closed on Monday for Presidents Day.

 

 

ASIA

Stocks in Asia rose in early trade today as markets in mainland China remain closed for the Lunar New Year holiday. Minutes from the Reserve Bank of Australia’s February monetary policy meeting, released on Tuesday showed members concluding that “very significant monetary support would be required for some time as it would be some years before the Bank’s goals for inflation and unemployment were achieved.”

 

 

CURRENCIES

The rand firmed on Monday, hurdling the key technical level of R14.50 on its way to a one-year best as signs of a local economic rebound and continued stimulus in the United States lifted demand for the currency. At the close, the rand was 0.64% firmer at R14.45 per dollar. Finance Minister Tito Mboweni is set to deliver the 2021 budget on Feb. 24, showing better-than-forecast revenue collection. South African assets often rally in the weeks ahead of the budget, falling thereafter, according to analysts. The rand was trading around R14.41 to the dollar this morning.

 

 

COMMODITIES

Oil prices rose this morning as a cold front shut wells and refineries in Texas, the biggest crude producing state in the United States, the world’s biggest oil producer. Prices also gained as Yemen’s Iran-aligned Houthi group said it struck airports in Saudi Arabia with drones, raising supply concerns in the world’s biggest oil exporter, and on optimism for a global economic recovery amid accelerated COVID-19 vaccine rollouts. Platinum prices rallied for a third straight session today, hitting a near six-and-a-half-year peak on hopes that a swift global economic rebound would boost demand for the auto-catalyst metal.

LOCAL COMPANIES

Shoprite (SHP) – +0.4%

Checkers, the upper market grocery chain within Africa’s largest food retailer group Shoprite Holdings, has shown double-digit sales growth of 11.1% in the half-year to December 27, 2020, according to an operational update issued on Monday. This is a positive sign for the retail giant, which is pumping significant resources into Checkers to take on the likes of upper market competitors Woolworths, Pick n Pay and to some extent Spar (the SuperSpar brand has some high-end stores). Checkers’s new higher end ‘Fresh-X’ stores, such as those at Mall of Africa, Sandton City, and more recently Rosebank Mall, are creating something of splash in the market – as is the Checkers Sixty60 on-demand grocery delivery service. The group’s major JSE-listed competitors are likely keeping a beady eye on these developments. Despite the growth in sales, its supermarkets were negatively impacted by the government’s Covid-19 liquor trading restrictions. The group pointed out that excluding its LiquorShop sales, Supermarkets RSA achieved sales growth of 7.8% and like-for-like sales of 5.7%. “For the six months to 27 December 2020 the Shoprite Group increased total sale of merchandise by 4.7%, to approximately R83.4 billion,” it said. “Excluding the impact of the closure of the RSA LiquorShop business due to Covid-19 lockdown regulations, the group increased total sale of merchandise by 6.3%.” The group said sales within its LiquorShop business declined by 21.8% during the half-year. The group’s supermarket business in the rest of Africa performed poorly, only managing to increase sales in constant currency terms by 0.9%. In rand terms its non-RSA supermarket sales declined by 8.4%. Shoprite blamed this on the “pre-existing challenges from a macro-economic and consumer affordability perspective” which were “exacerbated by Covid-19 and its associated lockdown restrictions”. Its non-RSA supermarket business contributed 10.2% of group sales during the period and no new stores were opened.

INTERNATIONAL COMPANIES

Jaguar Land Rover

The firm, owned by India's Tata Motors, says the Jaguar brand will lead the way with a complete zero-emission range by 2025. Land Rover's first electric vehicle is due to arrive by 2024 and will form the initial step into a six-strong model line-up. Known for its iconic, high-performance E-Type model in the 1960s and 1970s, Jaguar faces the challenge of many other manufacturers in developing zero-emission models to get ahead of looming bans on sales of new fossil-fuel vehicles, while retaining the feeling and power of a luxury combustion engine model. Shares in Tata Motors, which owns Jaguar and Land Rover, rose as much as 3% after the announcement. The carmaker said it will have prototypes using hydrogen fuel cells on Britain's roads within the next year as part of a long-term investment plan. The plans come as car groups worldwide pursue zero-emission strategies to meet strict CO2 emission targets. A number of countries have also announced bans on new fossil-fuel vehicle sales. Boris Johnson, who welcomed the company's commitment in a tweet on Monday evening, confirmed last year that sales of new petrol and diesel cars and vans would be phased out by 2030, as part of his 10-point plan for a "green industrial revolution".

Download full report here.

Share now
About the Author
avatar

Research Team

Media, Sasfin Wealth

Related Articles
articles image

Market in a minute - Commodity stocks taking the biggest hit.

By Andrew Padoa

articles image

Taking Stock - The JSE pushed ahead to a new record yesterday.

By Research Team

©2019 Sasfin. All right reserved. Financial Services Provider (FSP) 23833 and Registered Credit Provider NCRCP22

;