Cresta and Letshego only movers during the week

The second half reporting season is almost reaching an end with most companies having published their results. The results so far have been largely in line with expectations with the only surprise coming from Stanchart which incurred a loss of P57mn, largely due to a sudden rise in impairments.

Heavy weights Choppies, Barclays and Sechaba are still to come to the podium with their results. Choppies has already warned investors not be to “too excited” as its net profit for the year-ended 30 June 2017 will be lower than the comparative previous year mainly due to the reported gain on sale of assets in the previous financial year, and losses incurred in new markets such as Zambia, Kenya, Tanzania and Mozambique.

Cresta Hotels (Pic By PrimeTime)

Meanwhile, Letshego and FNBB were more liquid during the week under review trading 15.9mn and 11.5mn respectively during the week. This pushed the weekly turnover to 30.4mn shares worth P78.9mn although this is down from 39.8mn shares worth P121.9mn which were pushed through the market the previous week.

Cresta and Letshego were the only movers during the week, albeit both in the red. Cresta came off 0.8% to 128 thebe as investors reacted to its interim results were profit after tax came down to P7.2mn from P14mn previously. Letshego which briefly recovered to 201 thebe the previous week from recent lows of 190 thebe came off to 200 thebe during the week under review.

Against this background, the DCI closed the week 0.05% softer at 8,980.82 points while the FCI was static at 1,581.68 points in the absence of any movements on the Foreign Equity Main Board.

For the week, the Domestic Companies Index (DCI) lost marginally by 0.06% to 8,946.71 points weighed by losses in Letshego and Cresta.

Foreign Exchange: Geopolitical tensions dampens emerging markets currencies

The rand weakened against most major currencies towards the end of the week, trading at levels around R13.16/$ on geopolitical concerns after North Korea defied the international community by firing a missile over Japan. This comes a few days after the UN Security Council imposed sanctions on North Korea for conducting a nuclear bomb test earlier this month.

The rand also came under pressure due to the firming of the US dollar and the British pounds against most major currencies during the week. This is after the Bank of England Monetary Authorities left the bench mark rate unchanged at its meeting held on Thursday, with its accompanying minutes giving strong indications that the central bank could raise interest rates in the coming months, thereby boosting the value of the pound sterling.

Of particular interest were key US inflation numbers which came in line with expectations at 1.9% y/y, raising more expectations of a rate increase by the Fed, thereby boosting the dollar, while at the same time dampening emerging markets currencies.

For the week, the local unit firmed against the rand and the yen, while softening against other currencies. (Motswedi Securities)