ThinkDaily 27 February 2023

The JSE and the rand ended lower on Friday after South Africa was added to a greylist by the Finance Action Task Force (FATF), a global institution that monitors countries’ efforts to control illicit financial flows.  The greylisting means local companies, state-owned entities, and the government will face increased regulatory scrutiny when doing business internationally. The greylisting could also see the cost of capital for South African entities, increase.

The JSE weakened the most in five months, with strong losses coming from Anglo American (-6.99%), BHP (-4.44%), Dis-Chem (4.39%), and African Rainbow Minerals (-4.34%) amongst many others. The rand fell as much as 1.16% to R18.487 intraday but ended the trading session at R18.24.


Figure 1: Anglo American PLC’s Historical Share Price Chart (Source: ThinkTrader Web)

Global equity markets fell as well after higher-than-expected core personal consumption expenditure numbers from the US came out. The US Fed prefers this data point as a measure of inflation. The data point came out at a 0.6% rise in January, and 4.7% year-on-year, higher than expected.

On the oil front, Russia reported plans to cut oil trades from its western ports by up to 25% in March contrasted with February, surpassing its recently declared yield controls of 500,000 barrels each day. What's more, financial backers expect China's oil imports to hit a record high in 2023 amid rising interest in transportation fuel and as new processing plants come online.

This week, we have a busy economic and earnings calendar with South Africa’s inflation rate expected this week, and earnings from AB InBev, Harmony Gold, Aspen, FirstRand, and many more expected.

Market Moves (24 February 2023)