Markets WRAP: Rand ends at R13.62/$, JSE climbs over 54 000

Analysts predict tough times ahead for mobile operators 

It's a tough SA environment for retailers, and even more so for the telecoms industry.

In recent weeks shares in Woolworths, Mr Price and Vodacom all experienced slumps on the back of disappointing trading updates – reflecting that SA consumers are not spending money, according to FNB Wealth and Investment money manager Wayne McCurrie.

Vodacom's share price declined by 7% on Thursday after a trading update showed the group's SA service revenue had declined 0.9% to R13.9bn in the quarter ended December 31.

Bitcoin is worth less than the cost to mine it - JPMorgan

The production-weighted cash cost to create one Bitcoin averaged around $4 060 globally in the fourth quarter, according to analysts with JPMorgan Chase & Co.

With Bitcoin itself currently trading below $3 600, that doesn’t look like such a good deal. However, there’s a big spread around the average, meaning that there are clear winners and losers.

Low-cost Chinese miners are able to pay much less - the estimate is around $2 400 per Bitcoin - by leveraging direct power purchasing agreements with electricity generators such as aluminum smelters looking to sell excess power generation, JPMorgan analysts led by Natasha Kaneva said in a wide-ranging January 24 report about cryptocurrencies spearheaded by Joyce Chang.

Santam to list on A2X

Shares in Santam will start trading on the A2X exchange from February 1, the general insurer said on Friday.

A2X is a licensed stock exchange, which provides an additional listing opportunity for companies. It is regulated by the Financial Sector Conduct Authority and the SA Reserve Bank, in terms of the Financial Markets Act.

A2X began trading in October 2017 and now has nine approved brokers and 15 companies listed on its platform.

Santam has a market cap of more than R34bn and will retain its listings on the JSE and the Namibian Stock Exchange, it said in a statement.  Its issued share capital will be unaffected by the listing on the A2X.

"There is no cost, risk or additional regulatory compliance for Santam as a result of its A2X listing," it said.  

Santam CEO Lizé Lambrechts said the company is continually looking for new ways to add benefit to its clients and shareholders. "We see this additional listing as an opportunity to attract potential new investors," she commented.

Court date set for appeal against Sibanye, Lonmin merger

The Competition Appeal Court of South Africa will hear an appeal against a merger between mining companies Lonmin and Sibanye-Stillwater on April 2.

Asian stocks push higher led by tech; dollar slips

Stocks in Asia climbed as a rally in technology shares outweighed conflicting signals over US-China trade progress. The dollar slipped against all major peers bar the yen.S

hares rose across the region alongside European and US futures. Technology companies led the way following a strong US session for chipmakers.

Sentiment remained fragile as Secretary of Commerce Wilbur Ross said the world’s two biggest economies remain "miles and miles" apart on trade, though White House economic adviser Lawrence Kudlow later said President Donald Trump is optimistic about the trade talks and spoke positively about the January jobs report.

The pound climbed on reports Northern Ireland’s Democratic Unionist Party has privately agreed to back the Brexit deal.

Rand claws back losses, steadily making its way back to R13.60/$

The rand opened at R13.72/$ on Friday morning, and strengthened as much as R13.67 to the greenback in early morning trade.

"The rand is likely to remain range bound with steady directional moves on the back of risk appetite and overall market sentiment," said Bianca Botes, corporate treasury manager at Peregrine Treasury Solutions.

"We expect the rand to steadily make its way back to the R13.60 level as the dollar remains subdued."

This past week US President Donald Trump took centre stage with the US government shutdown and Sino-US trade negotiations still ongoing.

"The political turbulence in the US saw the dollar slide against all major currencies as we headed in to the final days of this week.

"This saw the rand claw back some of its losses from earlier in the week. The local unit remains on a steady footing against the greenback, having traded within a range of R13.65 to R13.98 for the most of the year so far," Botes noted.

Markets did not pay much attention to discussions on nationalising the Reserve Bank this week. In other local developments inflation declined to 4.5%, helped by lower fuel prices and a stronger rand, Botes explained.

"This points to an unchanged interest rate at the next MPC meeting," she added.

Further abroad, the US housing market disappointed, with monthly home sales dropping 6.4% in December, while initial jobless claims dropped to 199k from the previous 217k.

"While there seems to be a light at the end of the tunnel for Brexit, with Ireland ready to back Theresa May next week, the ECB has warned of waning economic growth in the greater EU.

"With politics remaining in the spotlight, the competition between local political parties is set to heat up as we head towards the general election in May, and sifting through the noise will be crucial for market participants," Botes said.