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We take a look at the Johannesburg Stock Exchange (JSE) trading statistics for the week ending 10 January 2020 and compare the numbers to that of a year ago.
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Our highlight over the last week
So yesterday one of the biggest wholesaler/retailer groups in South Africa, Massmart announced that they have started a consultation process in which they plan on implementing an optimization plan which could lead to several store closures as well as significant lay offs. Below the Stock exchange news service (SENS) released by the group
MASSMART COMMENCES CONSULTATION PROCESS IN TERMS OF SECTION 189 AND 189A OF THE LABOUR RELATIONS ACT
The Massmart Group has recently conducted a store optimisation project that highlighted a number of underperforming stores in its portfolio. Consequent to this project the Massmart Group seeks to advise shareholders that Massmart has commenced, a potential store closure consultation process in terms of section 189 and section 189A of the Labour Relations Act 66 of 1995, as amended; with organised labour and other relevant stakeholders. A total of 34 Dion-Wired and Masscash stores and approximately 1 440 employees are potentially affected by this process.
Shareholders will be advised of the outcome of the consultation process. 13 January 2020
MASSMART COMMENCES CONSULTATION PROCESS IN TERMS OF SECTION 189 AND 189A OF THE LABOUR RELATIONS ACT
The Massmart Group has recently conducted a store optimisation project that highlighted a number of underperforming stores in its portfolio. Consequent to this project the Massmart Group seeks to advise shareholders that Massmart has commenced, a potential store closure consultation process in terms of section 189 and section 189A of the Labour Relations Act 66 of 1995, as amended; with organised labour and other relevant stakeholders. A total of 34 Dion-Wired and Masscash stores and approximately 1 440 employees are potentially affected by this process.
Shareholders will be advised of the outcome of the consultation process. 13 January 2020
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JSE Trading Statistics for the week ending 10 January 2020
Number of trades:
Number of trades (2020): 1 139 462
Number of trades (2019): 1 186 326
% change year on year: -3.95%
Volume traded:
Volume traded (2020): 1 150 825 000
Volume of traded (2019): 1 105 833 000
% change year on year: 4.07%
Value of trades:
Value of trades (2020): R68 170 319 000
Value of trades (2019): R75 162 499000
% change year on year: -9.3%
Foreign purchase/selling:
Net sales/Purchases (2020): -R3 763 134 000
Net sales/Purchases (2019): -R4 930 093 000
So year to date (YTD) foreigners have been net seller/buyers:
Net sales/Purchases (2020): -R3.630 billion
Net sales/Purchases (2020): -R6.461 billion
So a year ago foreigners were net sellers of SA listed shares to the value of -R6.461 billion for the YTD while this year they have been net sellers to the tune of -R3.630 billion in the year to date (YTD). While the numbers for this is year is a lot better than the previous year the fact is that foreigners remain net sellers of SA listed stocks and they have been for most of 2019, 2018 and 2017.
A clear sign that foreign capital is still leaving South African equities in vast amounts. This while the South African government continues to try and convince investors that South Africa is open for business. But the large scale corruption, poor government service delivery, slow economic growth, restrictive labour laws, worries about property rights, crime and general public disorder in the forms of strikes and looting are keeping potential investors away from South Africa.
JSE total market capitalisation:
Market Cap (2019): R17.770 trillion
Market Cap (2018): R12.811 trillion
% change year on year: 38.71%
So as shown in the JSE total market capitalisation above, the value of the overall market capitalisation of the stocks listed on the JSE has increased significantly over the course of the last 12 months.
See our JSE Calendar tracker for more.
Key issues for the market and South Africa during 2020 will be:
Number of trades (2020): 1 139 462
Number of trades (2019): 1 186 326
% change year on year: -3.95%
Volume traded:
Volume traded (2020): 1 150 825 000
Volume of traded (2019): 1 105 833 000
% change year on year: 4.07%
Value of trades:
Value of trades (2020): R68 170 319 000
Value of trades (2019): R75 162 499000
% change year on year: -9.3%
Foreign purchase/selling:
Net sales/Purchases (2020): -R3 763 134 000
Net sales/Purchases (2019): -R4 930 093 000
So year to date (YTD) foreigners have been net seller/buyers:
Net sales/Purchases (2020): -R3.630 billion
Net sales/Purchases (2020): -R6.461 billion
So a year ago foreigners were net sellers of SA listed shares to the value of -R6.461 billion for the YTD while this year they have been net sellers to the tune of -R3.630 billion in the year to date (YTD). While the numbers for this is year is a lot better than the previous year the fact is that foreigners remain net sellers of SA listed stocks and they have been for most of 2019, 2018 and 2017.
A clear sign that foreign capital is still leaving South African equities in vast amounts. This while the South African government continues to try and convince investors that South Africa is open for business. But the large scale corruption, poor government service delivery, slow economic growth, restrictive labour laws, worries about property rights, crime and general public disorder in the forms of strikes and looting are keeping potential investors away from South Africa.
JSE total market capitalisation:
Market Cap (2019): R17.770 trillion
Market Cap (2018): R12.811 trillion
% change year on year: 38.71%
So as shown in the JSE total market capitalisation above, the value of the overall market capitalisation of the stocks listed on the JSE has increased significantly over the course of the last 12 months.
See our JSE Calendar tracker for more.
Key issues for the market and South Africa during 2020 will be:
- Exchange Rate (seems to be see sawing a lot. See our exchange rate page)
- The impact of the 25 bp cut announced by the South African Reserve Bank (SARB) monetary policy committee towards the end of 2019 and the impact will have on the Rand as well as the South African economy on the medium to long term. Additional interest rate cuts are now being discussed considering the muted inflation numbers published by Statistics South Africa yesterday and discussed earlier in this article
- ESKOM's financial woes and continued loadshedding and weaker than expected tax collections is forcing government to borrow more money, which is negatively affecting the South African exchange rate, and potential credit rating cuts coming for South Africa's government which pushes up the cost of borrowing, and this at a time when government is borrowing more and more
- Expropriation of land without compensation (EWC) has gone quiet in recent months but we are sure the EFF will bring it up again soon to get some airtime
- Potential expansionary monetary policy coming considering the very weak economic growth numbers
- Sluggish economic growth. See our SA GDP page and high levels of unemployment
- Additional tax increases that will likely be announced in the budget speech and how it will affect South African consumers spending patterns and potentially increase inflation levels as taxes were increased by rates higher than inflation. In particular lack of bracket creep relief and higher sin taxes, fuel levies and road accident fund levies will hurt consumers.