Taking Stock - Equities Property Fund raised R500 million capital

Equites Property Fund – the niche real estate investment trust (Reit) that focuses exclusively on the burgeoning logistics/warehousing sub-sector of the market – announced a R500 million capital raise on the JSE on Wednesday morning.

article image

MARKET COMMENTARY

SOUTH AFRICAN MARKET COMMENTARY

Local stocks bounced back from the previous session low, boosted by resources as gold and palladium prices gained. The mining index climbed 2.19%, led by Anglo American Platinum up 5.02% and followed by Northam Platinum up 4.46%. The main Johannesburg all-share index climbed 1.45% To 66,806 while the Top-40 index rose 1.59%. Retailer Steinhoff, battling to move on from a huge accounting fraud, leapt 21.38% following a two day sell-off.

 

EUROPEAN MARKET COMMENTARY

European stocks closed higher on Wednesday as fresh data showed an improving economic outlook in the euro zone. The pan-European Stoxx 600 ended the session up 0.8%, with basic resources adding 2.3% to lead gains while travel and leisure stocks bucked the upward trend to slump 1.5% on lingering fears over the fast-spreading Covid delta variant. The European Commission hiked its growth forecasts for the euro area on Wednesday, now projecting a 4.8% GDP growth rate this year and 4.5% for 2022.

 

US MARKET COMMENTARY

The S&P 500 rose to a fresh record on Wednesday as investors poured back into trusty mega-cap technology stocks. The S&P 500 advanced 0.34% to an all-time high of 4,358.13 after the index ended a seven-day winning streak in the previous session. Bank shares including Goldman Sachs and Bank of America continued their retreat on Wednesday as long-term bond yields fell further, hurting the industry’s profitability prospects. Investors may be worried the economy might be approaching its peak and that a correction could be on the way.

 

ASIAN MARKET COMMENTARY.

Shares in Asia-Pacific were mixed this morning, as Chinese tech stocks in Hong Kong came under pressure after regulatory fears resurfaced. Beijing recently announced a stepping up in oversight on Chinese listings in the US, many of whom are tech companies. That came after a recent crackdown on ride-hailing giant Didi and other tech firms, which once again raised concerns over the regulatory outlook.

 

CURRENCY MARKET COMMENTARY

The rand steadied against the dollar in afternoon trade on Wednesday, with market attention pinned on the release of minutes from the US Federal Reserve later in the day. At the close, the rand was trading around R14.31 to the dollar or 0.54% firmer. The dollar traded near its highest in three months versus major peers this morning after minutes of the Federal Reserve's June policy meeting confirmed the world's biggest central bank is moving toward tapering its asset purchases as soon as this year.

 

COMMODITIES MARKET COMMENTARY

Gold held steady this morning as lower US Treasury yields countered a stronger dollar after minutes from the Federal Reserve’s last meeting showed that the central bank is moving towards tapering its asset purchases as soon as this year. Oil prices fell for a third day today amid anxiety that supply may rise after the collapse of this week’s talks among major producers, potentially causing the current output agreement to be abandoned.

LOCAL LOCAL COMPANIES

Equites Property Fund (EQU) -3.5%

Equites Property Fund – the niche real estate investment trust (Reit) that focuses exclusively on the burgeoning logistics/warehousing sub-sector of the market – announced a R500 million capital raise on the JSE on Wednesday morning. However, just after midday the group said in an update that it had increased the capital raise to R1 billion due to market demand. The Cape-based group has a portfolio of properties in South Africa and the United Kingdom. In its earlier announcement, the group said that the equity raise would be implemented through an accelerated book build process subject to pricing acceptable to Equites. “The book build is now open and Equites reserves the right to close it at any time and to increase the size of the equity raise subject to demand,” it pointed out. “Pricing and allocations will be announced as soon as is reasonably practicable following the closing of the book build,” the group added. While Equites did not mention what the funds from the capital raise would be used for, this most likely will go towards funding the group’s acquisition and joint-venture development deal with fellow JSE-listed Reit Attacq, which was announced on Wednesday. Equites will acquire stakes in two industrial properties within Attacq’s Waterfall node in Gauteng and will jointly develop Australian retail group Cotton On’s new warehouse hub in the precinct with Attacq. The group’s last capital raise, back in August 2019, was oversubscribed and brought in R750 million. Equites, which is continuing with its expansion drive even in the face of Covid-19, saw its share price fall over 2.5% in trade on Wednesday, following the announcement of the latest equity raise.

INTERNATIONAL COMPANIES

Sainsbury's, Ocado (SBRY, OCDO) +2.0%, +1.2%

Shoppers are starting to return to pre-pandemic habits when it comes to buying food, according to two leading grocers. Sainsbury's says demand for online sales has fallen from peak levels as people return to shopping in stores. Boss Simon Roberts also said mask wearing in stores would be a matter of "personal choice" after Covid rules are lifted in England on 19 July. Meanwhile online grocer Ocado said average order sizes have been falling as people start to eat out more often. However, both Sainsbury's and Ocado said online sales were way above pre-pandemic levels. Sainsbury's says 18% of its sales are online, compared with 8% in 2019-20. Sainsbury's - the UK's second largest supermarket chain - also said online sales jumped 29% in the first quarter of its financial year compared with last year, and were 142% higher than before coronavirus struck. However, it added: "As restrictions continue to ease, customers are beginning to return to more normal shopping patterns, with online demand reducing gradually from peak levels and transaction numbers increasing in stores."

Download full report here

Share now
About the Author
avatar

Research Team

Media, Sasfin Wealth

Related Articles
articles image

Taking Stock - Twitter posts fastest revenue growth since 2014

By Research Team

articles image

Taking Stock - Massmart says 41 stores looted

By Research Team

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

;