5 things you need to know before the JSE opens today
·8 Feb 2016
Here’s what’s happening in the markets:
- The scope of South Africa’s mining sector woes has been outlined at the mining indaba – showing that the industry has lost over 47,000 jobs in the last three years – with 32,000 more at risk. Mining costs have increased by an average of 20% a year for the past five years – and electricity prices were at the core of the increases. Nersa is expected to deliver a verdict on whether power utility Eskom can again increase fees by as much as 17% on 25 February.
- While neighbouring country Zimbabwe has declared a state of disaster over ongoing drought conditions, the South African ministry has refused to follow suit. Deputy minister of agriculture, forestry and fisheries Bheki Cele said on Sunday that with the recent rainfall, the 6 million tonnes of white maize the country was looking to export has been reduced to 4 million, with further reductions coming if the rain persists.
- South African markets ended the week slightly higher on Friday, led by Anglo American, in what dealers said was a “short squeeze” rather than a change in the prospects of the mining firm. The rand continued to see-saw, however, ending the week weaker at R16.02 to the US dollar. On Monday the currency was trading at R15.98 to the dollar, R23.19 to the pound and R17.80 to the Euro.
- In global news, jobs data from the USA was mixed on Friday, causing Wall Street stocks to sink. Subsequently, Asian shares started the week on shaky ground – but trade was thin anyway, as many markets were closed for the Lunar New Year holidays.
- The Lunar New Year also had an impact on global oil prices as thin trade saw futures inch up. Trades are expected to remain limited until the US Federal Reserve chair Janet Yellen gives testimony to lawmakers this week. Locally, the central energy fund closed on Friday with a 36 cent over-recovery for 93 LRP fuel, and a 31 cent over-recovery for 95 LRP fuel.
In company news: Adapt IT has reported a massive jump in revenue in its interim results six months to December 2015. Turnover was up 19% year on year to R310.4 million, with profits up 50% to R52.5 million.
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