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12 January 12:55Global markets have endured a torrid start to the year after minutes from the bank's December meeting revealed a hawkish tilt by officials spooked by months of stubbornly high price rises that many fear could hit consumers and ruin the growth rebound.
He said the economy was on a strong footing, and with inflation rising and employment recovering,"the economy no longer needs or wants the very highly accommodative policy".The comments were taken by traders to be less hardline than feared, suggesting recent fears about a swift removal of easy-money measures may have been overdone.Read more: Fin24 »
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January 12, 2022 12 January 15:57 United States consumer inflation up at 7% in Dec 2021, highest level since 1982. Interest rates still down at 0.25%, offering no incentive to save. US Federal Reserve expected to start to increase interest rates in Mar 2022 and continue to move rates higher over next 2 to 3 years — kevin lings (@lingskevin) 12 January 12:55 JSE rallies with Wall St as Powell eases inflation fears Equities rallied Wednesday, tracking a strong performance on Wall Street as Federal Reserve chief Jerome Powell said he was determined to rein in runaway inflation but pledged to maintain the healthy recovery in the world's top economy. The JSE's All Share index was up almost 2% by lunchtime on Wednesday. Naspers jumped more than 6%, while Sasol (+5%), and Anglo (+4%) also saw strong gains. Global markets have endured a torrid start to the year after minutes from the bank's December meeting revealed a hawkish tilt by officials spooked by months of stubbornly high price rises that many fear could hit consumers and ruin the growth rebound. They showed policymakers wanted to speed up their cycle of monetary tightening, including multiple interest rate hikes - some commentators saying four this year - and the shrinking of the bond holdings on its balance sheet, which help keep lending rates down. Traders have been worried by the prospect of an end to the ultra-loose policies, which have helped power a two-year market rally and support the pandemic-hit economy. But Powell managed to soothe some of those fears Tuesday during his Senate reconfirmation hearing. He said the economy was on a strong footing, and with inflation rising and employment recovering,"the economy no longer needs or wants the very highly accommodative policy". Inflation was"very near the top of the list" of risks to the economic outlook, he said, adding that the current rate is"very far above target". Prices are currently rising at their fastest pace in four decades owing to a number of pressures including surging wage growth, supply chain snarls and high energy costs. The Fed expects a"return to normal supply conditions" in the coming months, Powell said, but"if we see inflation persisting at high levels longer than expected... we will use our tools to get inflation back". The comments were taken by traders to be less hardline than feared, suggesting recent fears about a swift removal of easy-money measures may have been overdone. Wall Street cheered, with Nasdaq climbing more than one percent, having taken a severe hit recently as tech firms are more susceptible to higher borrowing rates. The gains extended into Asia, with Hong Kong up 2.8 percent, thanks to a boost in tech firms, and Tokyo up a little shy of two percent. London, Paris and Frankfurt were all well up at the open.Data showing Chinese factory gate and consumer inflation grew slower than expected - and left room for the central bank to cut interest rates - provided extra support. While most observers expect equities to endure some tough times in the near future, they remain broadly upbeat about the outlook for this year. - AFP, with additional reporting by Fin24 12 January 08:27 Rand jumps to strongest level in weeks as Powell soothes policy fears The dollar slid to its weakest since mid-November against major peers on Wednesday, after Federal Reserve Chair Jerome Powell said it may take several months to make a decision on running down the central bank's $9 trillion balance sheet. The rand was trading a percent stronger at R15.50/$ in early trading on Tuesday, its best level since November last year. In testimony at his renomination hearing on Tuesday, Powell said the US economy was ready for higher interest rates and a runoff of its asset holdings - dubbed quantitative tightening (QT) - to combat inflation. But he said policymakers were still debating approaches to reducing the Fed's balance sheet, and that it could sometimes take two, three or four meetings for them to make such decisions. Powell's comments were less hawkish than those of some of his colleagues, allaying market fears for a sudden withdrawal of monetary support. Atlanta Fed President Raphael Bostic, for example, said on Monday that high inflation and a strong recovery warrant a rapid rundown of Fed asset holdings. "While Powell didn't really push back on market pricing around expected Fed rate hikes, we've certainly seen relief play out across markets" after he"tried to remove a belief that they are stuck on a set path," Chris Weston, head of research at brokerage Pepperstone, wrote in a note to clients." Risk is buoyant," weighing on both the dollar and the safe-haven yen, he said. - Reuters with Fin24 12 January 08:12 MTN SA appoints new Chief Technology and Information Officer MTN SA has appointed Michele Gamberini as its new Chief Technology and Information Officer (CTIO) effective 1 February. Gamberini is joining MTN from Telecom Italia, where he worked for 25 years, recently as its CTIO. "As we work toward our Ambition2025 strategy which is anchored on building the largest and most valuable platform business, I believe that Gamberini’s wealth of experience will have a notable contribution towards enhancing our technology functions as well as providing a network that is second to none to all South Africans," said MTN SA’s CEO Charles Molapisi. The telecoms giant also announced the appointment of Megan Nicholas as managing director for MTN Supersonic, the company's fibre and broadband internet service provider. Nicholas is currently the general manager for Residential at MTN SA. "Residential broadband delivery is a critical strategic focus, as we work to bring our superior network and service into more of our customer’s homes. This battle for the home market needs a leader of Megan’s caliber, expertise and experience," says Molapisi 12 January 07:44 Capitec founder and CFO to retire After 22 years with Capitec, its co-founder Andre du Plessis, who is the chief financial officer and financial director of the bank, will retire at the end of June. Grant Hardy, head of group financial services, will succeed him. Hardy is a chartered accountant who completed his articles with Deloitte. He joined Capitec in 2015. 11 January 19:41 Stocks mostly higher as Powell signals tough on inflation US stocks mostly rose Tuesday as US Federal Reserve chief Jerome Powell vowed to be tough on inflation on the eve of the latest US inflation data. The JSE's All Share Index was flat, although Kumba rocketed almost 10% and other mining shares were also stronger. The rand was almost unchanged at R15.57/$. Europe's major equity markets rebounded from recent falls as investors fished for bargain shares. Asian stocks ended lower. World oil prices recovered from Monday's drop, jumping more than 3 percent, but the dollar traded mixed. Bitcoin meanwhile, the world's most popular cryptocurrency, rose above $42,000 just a day after having sunk below $40,000 on fears of reduced liquidity as a result of US monetary policy tightening. In remarks at his Senate confirmation hearing for a second term as Fed chairman, Powell indicated that if inflation refused to go down then the central bank would be ready to increase rates as needed. With inflation rising and employment recovering,"the economy no longer needs or wants the very highly accommodative policy" that has seen the Fed move rates to ultra-low levels and stimulate the economy with massive purchases of government and corporate bonds. Returning to a normal monetary policy should not harm employment, he added. Investors have been watching anxiously as monetary policymakers react to inflation, which has taken off as the economies recover from the shutdowns and disruptions at the beginning of the pandemic. Higher interest rates are usually a negative for stocks, but investors have at times seemed reassured that policymakers are intent on restraining inflation which, if it got out of hand, could have a devastating effect on the global economy. In late morning trading, the Dow was down less than 0.1 percent, while the S&P 500 was up 0.2 percent and the tech-heavy Nasdaq Composite showed a gain of 0.9 percent. Several global central banks have already started hiking borrowing costs, including the Bank of England. While the fast-spreading Omicron coronavirus variant plays on nerves, traders are now coming to terms with the imminent end to the pandemic era of ultra-cheap cash, which helped the economic recovery and fanned a global rally for nearly two years. A pick-up in consumer activity, surging wages, supply chain problems and rising energy costs are combining to push inflation in several countries to highs not seen for a generation. That is ramping up pressure on central bankers to act before it gets out of control. Markets are now awaiting the release of US inflation figures on Wednesday, which could play a major role in the Fed's timing. "I'm not sure the inflation data tomorrow is going to put investors' minds at ease, with CPI (consumer price index) seen hitting a multi-decade high above 7 percent," said market analyst Craig Erlam at Oanda. "A higher reading could spook investors once again just as equity markets appear to be stabilizing," he added. - AFP 11 January 19:08 Vodacom joins MTN, launches legal bid to block Telkom's attempt to halt auction Vodacom has launched legal action against Telkom's bid to block the Independent Communications Authority of South Africa from going ahead with the long-awaited auction of spectrum. MTN has also launched a legal bid against Telkom. The legal action by both mobile giants is likely to bolster the regulator's position to go ahead with the auction. Vodacom spokesperson, Byron Kennedy, said the company had on Monday afternoon filed a notice to oppose Part A of Telkom's court application for an interdict to stop Icasa from processing any applications. "We remain committed to an expedited and fair spectrum auction process.... we have provided guidance to Icasa in our written submissions to its 2021 Information Memorandum (IM) consultations, and continue to engage stakeholders as we work toward a successful auction," he said. 11 January 15:20 Altron CEO Mteto Nyati to step down in June Mteto Nyati, CEO of technology solutions provider Altron, will be stepping down from his position at the end of June following the end of his five-year term, the company announced on Tuesday. Nyati joined Altron in 2017 and the company hailed him for his"successful contribution to the increase of shareholder value by approximately six times during his tenure."Nyati was previously chief enterprise officer at MTN and MD of Microsoft's South African operations. Read more 11 January 14:36 While JSE is trading in record ground, only 7 companies in the Top40 are at or near all-time highs. CFR BHP AGL MTN CPI GLN & CLS. The balance are well off the peaks, many of those reached years ago. The good news, though, is that technically most stocks are in a positive trend. — David Shapiro (@davidshapiro61) 11 January 13:43 'Value is not at all reflected in the stock.' CEO buys R155m in Prosus shares Prosus CEO Bob van Dijk has purchased about R155 million of the company's shares on the open market, the company has revealed. According to Van Dijk"buying more Prosus shares reflects my personal conviction that our businesses have had exceptional momentum and that their value is not at all reflected in the stock. "Prosus, a Naspers spinoff, has invested in online classifieds, food delivery, payments and fintech, and education technology sectors in markets such as India, Russia, and Brazil. Prosus has a primary listing on Euronext Amsterdam and a secondary listing on the JSE. Prosus's share price has lost more than a fifth of its value over the past year after the Chinese government cracked down on the country’s education tech sector and threatened further clampdowns. This triggered a sell-off in digital behemoth Tencent. Prosus owns a 29% stake in Tencent. Last year, Prosus unveiled a complex share swap with Naspers and a further $5 billion share buyback to narrow the valuation gap between itself and its stake in Tencent. Van Dijk earned total remuneration of almost €14.2 million (R251 million) in the past year. - SIBONGILE KHUMALO Fin24 is part of Media24, a subsidiary of Naspers. 11 January 10:31 Alphamin declares dividend thanks to record tin output, soaring prices Alphamin Resources, the owner of the world’s highest-grade tin mine, declared a dividend on the back of record production volumes in 2021. The company, which produces 4% of the world’s mined tin from its high-grade operation in the Democratic Republic of Congo, is listed on the Toronto Stock Exchanges’ Venture Exchange, with a secondary listing on the JSE’s AltX. On Tuesday, the company declared a full-year dividend of 0.03 Canadian Dollars (37 South African cents) per share.Tin prices have had a phenomenal run, rising from about $15 000 a ton in April 2020 to an all-time high of more than $39 600 a ton currently. At 3 114 tons, Alphamin's tin production was 10% higher in the fourth quarter of last year than in the previous quarter – and a record for the company. Sales were 13% higher to reach 3 056 tons. Product grade also benefited from improved underground mining practices. As a result of increased tin production and sales volumes, together with a higher average tin price achieved, Alphamin said its earnings before interest taxes depreciation and amortisation (Ebitda) guidance of $74 million for fourth quarter of 2021 is estimated to be 38% higher than the actual (Ebitda) for the previous quarter of $53.7 million. The group net cash position as at 31 December 2021 increased by $67m compared with the prior quarter. The Mpama North operation in the eastern DRC has by far the world’s highest grade tine resources – about four times higher than most other operating tin mines. Alphamin is now developing Mpama South, where a mineral resource estimation exercise commenced in December 2021. Drilling activities continue with six rigs on-site and the next large batch of test results is expected this month. - LISA STEYN 11 January 10:21 MC Mining asks IDC for another extension on loan repayment MC Mining has again asked the Industrial Development Corporation for an extension for repayment of its R160 million loan, plus interest, as well an extension of the terminal drawdown date of a further, conditional, R245 million loan. The company, which is developing a flagship Makhado coking coal mine, is yet to secure all the funding it needs in order to break ground on the project. The IDC previously agreed to extend both the repayment and terminal drawdown date to 31 January 2022. MC Mining has asked that the deadline be extended to 31 March. The IDC is yet to respond to its request. - 11 January 08:39 Miway appoints OUTsurance exec as new CEO Direct insurer MiWay has appointed Burton Naicker as CEO, to replace René Otto, who retired at the end of 2021. Naicker was previously chief operating officer of OUTsurance. He was with OUTsurance for 18 years. He officially assumed his CEO duties with effect from 1 January 2022 and will also serve as a member of the Santam group executive team. Otto was a founding member of Santam-owned Miway, which was launched 14 years ago. Miway has some 347 000 clients, which paid almost R1.6 billion in premiums during the six months to end-June last year, according to Santam's latest financial results. The company offers car, household and business insurance. “René has played a critical role in successfully building a solid foundation for MiWay from inception. He’s been instrumental in instilling a culture of innovation, transparency, and most importantly, putting clients first and steered MiWay into a successful business over the years," Naicker said in a statement. 11 January 08:34 Around 40% of Nasdaq listed stocks are at 52 week lows. Yet the overall index is only 7% off all time highs. The blue chips are standing strong while the high beta stocks have been crushed. School fees for the Robinhood heroes of 2021. — Byron Lotter (@Byron_vestact) 11 January 07:03 Asian markets drop as era of free cash draws to a close Asian markets retreated Tuesday as investors grew increasingly concerned about the Federal Reserve's plans to wind back its financial support measures and lift interest rates within months. While the fast-spreading Omicron coronavirus variant plays on nerves, traders are now coming to terms with the imminent end to the pandemic era of ultra-cheap cash, which helped the economic recovery and fanned a global rally for nearly two years. A pick-up in consumer activity, surging wages, supply chain snarls and rising energy costs are combining to push inflation in several countries to highs not seen for a generation, ramping up pressure on central bankers to act before it gets out of control. Several countries have already started hiking borrowing costs but all eyes are on the US Federal Reserve as it tees up its first move, with commentators predicting that to come in March, followed by two or three more by the end of the year. In remarks released ahead of his Senate confirmation hearing on Tuesday, boss Jerome Powell said the bank was ready to act. "We will use our tools to support the economy and a strong labour market and to prevent higher inflation from becoming entrenched," his opening statement said. "We can begin to see that the post-pandemic economy is likely to be different in some respects. The pursuit of our goals will need to take these differences into account." Data on Friday showed fewer jobs than expected were created in December but there were plenty of openings and wages soared, suggesting further upward pressure on prices is likely. Traders are now cautiously awaiting the release of US inflation figures on Wednesday, which could play a major role in the Fed's thinking. The prospect of higher rates has rattled US markets at the start of the year. The Nasdaq is already down more than four percent as tech firms are more susceptible owing to their reliance on debt to drive growth. While the tech-heavy index inched up slightly Monday, the S&P 500 and Dow closed in the red, though late dip-buying helped them recover from early steep losses. Asia also suffered in early exchanges, with Tokyo returning from a long weekend break to end the morning lower, while Hong Kong, Shanghai, Sydney, Seoul, Wellington and Taipei also slipped. Singapore and Manila were flat, though Jakarta rose."We think eventually this market will shift back toward growth, but we still got some wood to chop there; the valuations haven't corrected," Lori Calvasina of RBC Capital Markets told Bloomberg Television. "This is a repricing. It's painful, it has a little bit more ways to go." AFP 10 January 16:35 Bitcoin is off to its worst annual start since the dawn of crypto Bitcoin fell for the fifth time in six days, putting it on pace for its worst start to a year since the earliest days of the digital alternative to money. The original cryptocurrency fell as much as 3.7% to $40,766 in New York trading, bringing its loss this year to about 12%. The decline is the largest for a start of the year since at least 2012. Ether edged lower, while the Bloomberg Galaxy Crypto Index dropped for a fourth day. “Cryptocurrencies are likely to remain under pressure as the Fed reduces its liquidity injections,” said Jay Hatfield, chief executive of Infrastructure Capital Advisors. “Bitcoin could end 2022 below $20,000. ”Bitcoin was created in the wake of the 2008 global financial crisis by an anonymous individual or group that went by Satoshi Nakamoto. It first began trading in 2009 and pricing information from during the early days is limited. Bloomberg Intelligence’s Mike McGlone said $40,000 is an important technical support level for the digital token. Cryptocurrencies are a good barometer for the current reduction in risk appetite. But he projects that Bitcoin will eventually come out ahead as the world increasingly goes digital and the coin becomes the benchmark collateral. The Covid-19 pandemic helped Bitcoin break further into the mainstream as institutions and retail investors got involved with the crypto market and its ancillary projects. Now that the Federal Reserve has turned more hawkish, riskier assets like stocks and digital assets have suffered. - BLOOMBERG