The Johannesburg Stock Exchange’s Top 40 index fell 0.8% yesterday to 67,690 points and the broader All-Share index lost 0.65% to 74,350 points. The biggest loser in the blue-chip index was Northam Platinum, which fell 6.6% after a trading report disappointed investors, sending the mining company past gains by local peers on higher precious metals prices. Meanwhile, the South African Reserve Bank raised the repo rate by 25 basis points to 4.25%, with the Monetary Policy Committee (MPC) divided over whether to raise rates further.
The rand strengthened on Thursday, hitting a five-month high after the central bank raised the repo rate. At the end of the day, the rand was trading 1.55% firmer at R14.53 to the dollar. The South African Reserve Bank had been expected to raise its repo rate by 25 basis points, according to a Reuters poll of economists. The vote by two of the five MPC members for a 50 basis point hike and upward revisions to inflation forecasts strengthened the currency, which has been one of the best-performing emerging markets since Russia invaded Ukraine a month ago.
Gold was on track for its third weekly gain in four weeks this morning as the Russia-Ukraine conflict escalated, while the rise in oil prices this week increased demand for precious metals as a safe haven and inflation hedge. Oil prices fell about $1 today as the United States and its allies considered releasing more oil from storage to cool markets and as traders faced higher costs to trade benchmark Brent futures.
CLICKS GROUP LIMITED – Trading Statement
As disclosed in the Group’s 2021 financial statements, on 29 October 2021 the Group received a second interim payment of R250 million (including VAT) from the South African Special Risks Insurance Association (“SASRIA”) under its political risk insurance claim relating to the July 2021 civil unrest. The insurance payment is expected to increase earnings per share (“EPS”) for the period by 64.2 cents and headline earnings per share (“HEPS”) by 38.3 cents. Due to the inclusion of the second interim insurance payment, the Group’s EPS and HEPS for the period are expected to exceed the prior period EPS of 358.9 cents and HEPS of 370.6 cents by more than 20%.
NORTHAM PLATINUM HOLDINGS LIMITED – trading statement
Northam expects earnings per share to increase in a range of 55.9% to 65.9% for the six months ended December 31, 2021 (“H1 F2022”) compared to the six months ended December 31, 2020 (“H1 F2021”). Despite operational and inflationary challenges, operating profit increased 12.7%. This was driven by a 16.8% increase in revenue, partially offset by a corresponding 20.0% increase in cost of sales, resulting in an operating profit of R5.9 billion for the period (H1 F2021: R5.2 billion).