SOUTH AFRICAN MARKET COMMENTARY

Local stocks plunged yesterday amid growing concerns over the impact of the US banking crisis on global markets. The Top 40 and All-Share indices tumbled approximately 3% to 67,306 and 72,895 points, respectively, hitting their lowest levels this year. Banking stocks were hit hard, declining 2.78% in line with global market sentiment. This decline followed Credit Suisse's largest investor stating it was unable to increase its stake, citing regulatory concerns. Meanwhile, retail sales in South Africa fell 0.8% YoY in January, according to Statistics South Africa data, after declining 0.5% in December.

EUROPEAN MARKET COMMENTARY

European markets tumbled yesterday as banking stocks took a hit due to the global Silicon Valley Bank fallout and more negative news for Credit Suisse. The pan-European Stoxx 600 index closed 3% lower, with all sectors in the red. Banking stocks experienced their worst session since February 24, 2022, plunging 7%, while the oil and gas sector fell 6.7% and mining stocks lost 5.6%. In company news, Credit Suisse's shares plummeted after Saudi National Bank, its biggest lender, said it couldn't provide additional financial support.

US MARKET COMMENTARY

US stocks had a mixed performance yesterday due to concerns about a banking crisis spreading to Europe, which weighed on the broader market. On the data front, the producer price index unexpectedly fell by 0.1% in February, compared to the previous month, while economists polled by Dow Jones had anticipated a 0.3% increase in the index month over month. In company news, US big bank shares declined, Citigroup slid 5.4%, while Wells Fargo and Goldman Sachs each lost more than 3%.

ASIA MARKET COMMENTARY

Asia-Pacific markets started the day down but recovered as the session progressed amidst mounting banking concerns in the region due to the Credit Suisse turmoil. Australia's seasonally adjusted government data showed a drop in the unemployment rate to 3.5% in February, below expectations of 3.6%. Meanwhile, Japan's February trade deficit rose 26.2% YoY to 897.7 billion yen ($6.76 million) as imports rose 8.3%, and exports rose 6.5%, slightly lower than forecasts. Finally, China's industrial output for the January-February period rose 2.4%, while retail sales increased 3.55% YoY.

COMMODITY MARKET COMMENTARY 

Gold prices saw a slight decrease this morning due to renewed fears of a global banking crisis stemming from Credit Suisse's issues. Oil prices experienced a sharp decline earlier today, reaching the lowest levels in over a year. This was due to concerns that the banking sector's crisis of confidence could lead to a recession and decreased demand for oil. Additionally, government data showed that US crude stockpiles increased by 1.6 million barrels last week, surpassing the expected rise of 1.2 million barrels in a Reuters poll.

CURRENCY MARKET COMMENTARY 

The rand plummeted yesterday as the US banking crisis spread to Europe and continued to wreak havoc on global markets. At the close, the rand traded at R18.84 against the dollar, 3.93% softer. Meanwhile, the US dollar and Japanese yen strengthened on renewed concerns of a global banking crisis after the collapse of Silicon Valley Bank in the US spread to Swiss bank Credit Suisse. Traders rushed to traditional safe haven currencies, as fears grew that the stress unfolding across banks in the US and Europe could be a sign of an extensive systemic crisis. 

MC MINING LIMITED (MCZ) -12.4%

The company incurred a loss after tax of $1.3 million or 0.50 cents per share, which was mainly due to an income tax expense of $1.0 million. In comparison, the loss after tax for FY2022 H1 was $0.8 million or 0.54 cents per share, which had a credit of $0.5 million. The company generated a revenue of $14.0 million, compared to $13.0 million in FY2022 H1, with the cost of sales amounting to $10.1 million ($10.9 million in FY2022 H1), resulting in a gross profit of $3.9 million ($2.1 million in FY2022 H1). Administrative expenses, including non-cash employee expenses, amounted to $4.1 million ($2.9 million in FY2022 H1), while finance costs were $1.1 million ($0.9 million in FY2022 H1). In November 2022, the company raised net proceeds of $21.4 million through a fully underwritten Rights Issue. Loan repayments amounted to $5.1 million ($0.6 million in FY2022 H1), with $3.5 million settled in equity as part of the Rights Issue. At the end of the period, the company had cash and cash equivalents of $20 million, compared to $3 million on 30 June 2022.

GROWTHPOINT PROPERTIES LIMITED (GRT) -3.0%

For the financial year ending 31 December 2022 (“Current Reporting Period”), both loss per share (“LPS”) and headline loss per share (“HLPS”) will be between 24.55 cents and 27.08 cents, representing an increase in the loss per share of between 93.43% and 113.43% compared to the LPS and HLPS of 12.69 cents reported for the financial year ended 31 December 2021. The LPS and HLPS for the Current Reporting Period increased mainly due to further operating expenditure incurred by the Company.

STADIO HOLDINGS LIMITED (SDO) -2.2%

The educational institution reported positive financial results for the period, with an 11% increase in revenue, 11% and 8% growth in Semester 1 and Semester 2 student numbers, respectively. Additionally, the company saw an 18% increase in core headline earnings, with basic core headline earnings per share (CHEPS) rising by the same percentage. EBITDA rose by 13%, while profit after tax grew by 36%, leading to a 31% increase in earnings per share (EPS) and a final dividend per share rise of 89%. The net asset value per share also increased by 7% from the previous period.

Samsung (5930) +1.4%

Samsung Electronics has announced its plans to invest 300 trillion Korean won ($228 billion) in a new semiconductor complex in South Korea. This move is part of the government's push to take the lead in critical technologies, with the investment being made until 2042. The new complex will be located outside of Seoul and will create a semiconductor mega-cluster by linking up different parts of the supply chain, including design and manufacturing. The South Korean government has also announced that the private sector will invest 550 trillion won by 2026 in areas such as chips, displays, batteries, and electric vehicles.

Adobe (ADBE) +0.1%

Shares of Adobe rose 5% in after-hours trading yesterday after the company announced its fiscal first-quarter results, exceeding Wall Street estimates and raising its full-year forecast. Adobe reported adjusted earnings of $3.80 per share, compared to analysts' expected $3.68 per share, and revenue of $4.66 billion, compared to an expected $4.62 billion. The Digital Media segment generated $3.4 billion in revenue, while the Digital Experience segment contributed $1.18 billion. Adobe expects earnings per share of $3.75 to $3.80 and revenue of $4.75 billion to $4.78 billion in the second quarter. For the 2023 fiscal year, Adobe forecasts adjusted earnings per share of $15.30 to $15.60.

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