ThinkDaily: South Africa Greylisted - How Did the Banking Shares React?

  • Market Overview

After what seemed like a bloodbath on the JSE on Friday, after South Africa was greylisted by the Financial Action Task Force (FATF), the local bourse ended firmer on Monday, in line with global stocks.

South African banking shares took a beating on Friday after the greylisting, with Firstrand (JO: FSRJ ) down 3.57%, Standard Bank (JO: SBKJ ) down 3.10%, Absa (JO: ABGJ ) down 2.01%, and Nedbank (JO: NEDJ ) down 3.08%, as sentiment towards banks soured slightly given the higher costs of doing business internationally the banks most probably will have to face going forward.

The JSE all share increased 0.75% to 77,513 points and the JSE Top 40 index added 0.89%. Industrials firmed 1.1%, industrial metals garnered 0.8%, resources added 0.46%, financials were up 0.34% and banks advanced 0.27%.

Dis-Chem Historical Share Price Chart (Source: ThinkTrader)

Figures: Dis-Chem (JO: DCPJ ) Historical Share Price Chart (Source: ThinkTrader)

The Dow Jones industrial average was 0.31% firmer while the UK’s FTSE 100 gained 0.76%, France’s CAC added 1.61% and Germany’s DAX was up 1.31%.

In company-specific news, Sandton City and Eastgate Mall co-owner Liberty Two Degrees, released positive annual results for the period ended 31 December 2022. Its revenue increased by 9.7% to R974.05 million while net income increased by 7.4% to R554.08 million. Its retail occupancy improved by 1.1 percentage points to 97.9%, with luxury retailers being their top-performing category, followed by apparel and food services (fast food and restaurants). The real estate investment trusts (REIT), loan-to-value increased from 23.87& to 24.42%. Its distribution payout (100%), increased by 7% to 36.47 cents.

This morning, Oceana (JO: OCEJ ) released a voluntary trading statement. The company expects its earnings per share and headline earnings per share for the half-year period ending 31 March 2023 to increase by more than 20%, primarily due to strong local demand for canned fish and strong international prices for fishmeal and fish oil .

The rand has weakened against the dollar this morning and is currently trading at R18.4808/$. It has also weakened against the euro (R19.5858/€) and the pound (R22.2453/£).

Today, Statistics South Africa (STATSSA) will release the unemployment numbers for Q4 2022. The unemployment rate is expected to increase to 33.3% to 32.9%.

Market Moves (27 February 2023)


Key companies expected to release results this week

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