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In our continued efforts to give our readers a broad number of views, opinions and information, we continue to provide PSG's daily market updates and add our own daily inputs in at the end.
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Short summary of PSG's market commentary for 16 October 2019
South Africa
The JSE made gains on Tuesday as investors digested a possible trade agreement that could halt the prolonged US-China trade spat. At the closing bell, the JSE All Share gained 0.64%.
United States
Wall Street indices gained over 1% on Tuesday after the release of strong earnings data from JPMorgan, UnitedHealth and Johnson & Johnson boosted markets. Just after the JSE closed, the S&P 500 and the Nasdaq gained 1.10% and 1.21% respectively.
Europe
European stocks rebounded on Tuesday on hopes of a smooth Brexit deal between the European Union and Britain, set to be reached the end of this week. Shortly after the JSE closed, France’s CAC 40 Index gained 1.05% while Germany’s DAX rose by 1.15%.
Hong Kong
Although investors cheered signs of a trade deal between Washington and Beijing, shares in Hong Kong took a knock on Tuesday as concerns over China’s economic state persisted. The Hang Seng closed 0.09% in the red.
Japan
The Nikkei share average surged to a 5-month high on easing trade tensions between two of the world’s largest economies. At 18h45 on Tuesday, the Nikkei recorded a 1.87% gain.
Rand
The rand lost some ground against the dollar on Tuesday as investors remained uncertain about the details of the US-China trade agreement. At 18h50 a dollar traded at R14.89.
Precious metals
Gold prices fell on Tuesday as investors sought new catalysts from a crucial meeting that will determine how Britain will depart from the EU this week. An ounce of spot gold traded at $1 481.68 at 19h00.
Oil
Oil prices rose on Tuesday after Opec said it was prepared to balance markets beyond 2020 in the event of further supply cuts. At 19h15, a barrel of Brent crude traded at $59.74.
The JSE made gains on Tuesday as investors digested a possible trade agreement that could halt the prolonged US-China trade spat. At the closing bell, the JSE All Share gained 0.64%.
United States
Wall Street indices gained over 1% on Tuesday after the release of strong earnings data from JPMorgan, UnitedHealth and Johnson & Johnson boosted markets. Just after the JSE closed, the S&P 500 and the Nasdaq gained 1.10% and 1.21% respectively.
Europe
European stocks rebounded on Tuesday on hopes of a smooth Brexit deal between the European Union and Britain, set to be reached the end of this week. Shortly after the JSE closed, France’s CAC 40 Index gained 1.05% while Germany’s DAX rose by 1.15%.
Hong Kong
Although investors cheered signs of a trade deal between Washington and Beijing, shares in Hong Kong took a knock on Tuesday as concerns over China’s economic state persisted. The Hang Seng closed 0.09% in the red.
Japan
The Nikkei share average surged to a 5-month high on easing trade tensions between two of the world’s largest economies. At 18h45 on Tuesday, the Nikkei recorded a 1.87% gain.
Rand
The rand lost some ground against the dollar on Tuesday as investors remained uncertain about the details of the US-China trade agreement. At 18h50 a dollar traded at R14.89.
Precious metals
Gold prices fell on Tuesday as investors sought new catalysts from a crucial meeting that will determine how Britain will depart from the EU this week. An ounce of spot gold traded at $1 481.68 at 19h00.
Oil
Oil prices rose on Tuesday after Opec said it was prepared to balance markets beyond 2020 in the event of further supply cuts. At 19h15, a barrel of Brent crude traded at $59.74.
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Our daily update
Yesterday embattled IT company EOH released results for their year ending June 2019. The group has been in the news in the last couple of months for all the wrong reasons. All due to large scale fraud and corruption going on within one of the group's divisions. Due to this they lost their partnership agreement with Microsoft. Read more about that here. But EOH is adament they have cleared out the rot and criminal charges and investigations has been forwarded to the South African Police Service as well as the financial intelligence centre
Below a short extract from EOH's latest results
EOH is one of the largest technology services company in Africa and has a wide range of solutions in industry consulting, IT services, software, industrial technologies and business process outsourcing. The Group continues to be an undisputed market leader in its core ICT businesses which operates principally under the iOCO brand name. The nature of this business is systemic to both the public and private sector and is an integral technology partner for a number of South Africa’s leading JSE-listed, Blue-Chip companies as well as key metros and government departments.
Salient features
- Enhanced King IV compliant Board and new executive leadership.
- Strategic focus defined for short-term. Further refinement and assessment of portfolio ongoing.
- Embarked upon a fit-for-purpose capital structure.
- Progress made towards reducing leverage.
- Key financial indicators:
- Continuing revenue – R11 791 million.
- Normalised EBITDA – R792 million.
- Cash of R1 049 million.
- Gross debt reduced by approximately R500 million to R3 167 million
Withdrawal of cautionary announcement
Shareholders are referred to the initial cautionary announcement released on SENS on 19 February 2019 and the further cautionary announcements released thereafter, the last of which was released on 10 October 2019. These announcements advised shareholders of the ongoing investigation into the suspicious payments of R1.2 billion identified by the ENSafrica forensic investigation initiated by management in February 2019. Shareholders are now referred to the provisional reviewed condensed consolidated results for the year ended 31 July 2019, released on SENS earlier today, in which the Company detailed the progress made on the investigation and the anticipated financial implications arising from the investigation, which is now substantially completed.
Below a short extract from EOH's latest results
EOH is one of the largest technology services company in Africa and has a wide range of solutions in industry consulting, IT services, software, industrial technologies and business process outsourcing. The Group continues to be an undisputed market leader in its core ICT businesses which operates principally under the iOCO brand name. The nature of this business is systemic to both the public and private sector and is an integral technology partner for a number of South Africa’s leading JSE-listed, Blue-Chip companies as well as key metros and government departments.
Salient features
- Enhanced King IV compliant Board and new executive leadership.
- Strategic focus defined for short-term. Further refinement and assessment of portfolio ongoing.
- Embarked upon a fit-for-purpose capital structure.
- Progress made towards reducing leverage.
- Key financial indicators:
- Continuing revenue – R11 791 million.
- Normalised EBITDA – R792 million.
- Cash of R1 049 million.
- Gross debt reduced by approximately R500 million to R3 167 million
Withdrawal of cautionary announcement
Shareholders are referred to the initial cautionary announcement released on SENS on 19 February 2019 and the further cautionary announcements released thereafter, the last of which was released on 10 October 2019. These announcements advised shareholders of the ongoing investigation into the suspicious payments of R1.2 billion identified by the ENSafrica forensic investigation initiated by management in February 2019. Shareholders are now referred to the provisional reviewed condensed consolidated results for the year ended 31 July 2019, released on SENS earlier today, in which the Company detailed the progress made on the investigation and the anticipated financial implications arising from the investigation, which is now substantially completed.
Our JSE All Share index daily performance calendar
Visit our JSE Calendar tracker page for a expanded version of the calendar below
The graphic below provides the daily returns of the JSE All Share Index (J203) on a calendar chart. Provides a great overview of the All share index over the course of the month. It will be updated daily with our daily investment update as received from PSG.
While the month of August was negative by -1.73% lets see what the month of September holds for the South African stock market.
So for the month September 2019 the JSE All Share Index ended the month down -2.01%. Midway through the trading month of October 2019 and the JSE All Share Index is up by 1.43%. Question is whether it can hold on to the gains made for the rest of the month. There seems to be a softening of the trade wars rhetoric as both the USA and China looks to avoid further damage being caused to their economies
For more on daily market movements see our 2019 Calendar tracker.
But we as South African investors are losing out in Dollar terms. Largely due to continued Rand weakness not only over the short term but over the last couple of years. We continue to advise investors to take money out of South Africa and invest it offshore. Looking for ideas for investments to make? Go read this article
So for the month September 2019 the JSE All Share Index ended the month down -2.01%. Midway through the trading month of October 2019 and the JSE All Share Index is up by 1.43%. Question is whether it can hold on to the gains made for the rest of the month. There seems to be a softening of the trade wars rhetoric as both the USA and China looks to avoid further damage being caused to their economies
For more on daily market movements see our 2019 Calendar tracker.
But we as South African investors are losing out in Dollar terms. Largely due to continued Rand weakness not only over the short term but over the last couple of years. We continue to advise investors to take money out of South Africa and invest it offshore. Looking for ideas for investments to make? Go read this article