Unum Market Commentary: JSE Contagion Casualties; Equities Slip
It was "Throwback Thursday" on the JSE as the index gave back all of the week's gains due to the extended emerging market contagion. This time we (again) cried for Argentina as the central bank raised interest rates to 60% which saw it's currency plunge to an all-time low of 41.35 to the US Dollar. This impact was seen in the local unit as the Rand closed weaker by 2.5% versus the US Dollar, 2.4% versus the British Pound and 2.2% versus the Euro. Reports also surfaced that Us President Donald Trump is looking at impose a further 200bn of tariffs on China. This saw US Indices close lower on the day, with the Dow Jones Industrial Average, S&P500 and Nasdaq in the red by 0.53%, 0.44% and 0.26% respectively. On the local market, stocks were under pressure with the biggest news story of the day being MTN coming to heads with the Nigerian Central Bank with the authority suggesting that the telecommunications giant repay 8.1bn that had been "illegally" moved abroad. This saw even further contagion amongst JSE listed shares, with Shoprite and Coronation Fund Managers declining, potentially on the back of the news. On the day, the JSE All Share Index closed lower by 2.27%, while the Top 40 Index closed in the red by 2.56%. This morning, Asian markets are mostly lower with Tencent down 4.5% as the Chinese Government plans to limit the number of new online games in its push against gaming addiction.
JSE Major Sectors
Resources 10 +0.20%
Industrial 25 -4.07%
Financial 15 -1.43%
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Join the Unum Trading Desk on Friday 7 Sep 2018 starting at 14:15 as we look to trade the EURUSD Forex pair on the NFP data. t.me/NFP7SEP2018
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In currencies, the South African Rand trades as follows:
USDZAR +0.01% to 14.72
GBPZAR +0.02% to 19.16
EURZAR -0.00% to 16.18
Gold trades at $1210
Platinum at $794
Brent Crude Oil at $78.03
International Markets
This morning, Asian equities are as follows:
Nikkei 225 (-0.09%)
Hang Seng (-0.92%)
Shanghai Composite (-0.08%)
Latam Markets closed as follows:
Merval 25 (+5.34%)
Bovespa (-2.53%)
INMEX (-1.08%)
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Company News
MTN GROUP LIMITED - Central Bank of Nigeria (CBN) correspondence re Certificates of Capital Importation(CCIs) in Nigeria and cautionary
Central Bank of Nigeria (CBN) correspondence regarding Certificates of Capital Importation (CCI’s) in Nigeria and cautionary announcement MTN Nigeria Communications Limited (MTN Nigeria) received a letter on 29 August 2018 from CBN alleging that CCI’s issued in respect of the conversion of shareholders loans in MTN Nigeria to preference shares in 2007 had been improperly issued. As a consequence they claim that historic dividends repatriated by MTN Nigeria between 2007 and 2015 amounting to $8,1 billion need to be refunded to the CBN.
MTN Nigeria strongly refutes these allegations and claims. No dividends have been declared or paid by MTN Nigeria other than pursuant to CCI’s issued by our bankers and with the approval of the CBN as required by law.
The issues surrounding the CCI’shave already been the subject of a thorough enquiry by the Senate of Nigeria. In September 2016 the Senate mandated the Committee on Banking, Insurance and other Financial Institutions to carry out a holistic investigation on compliance with the Foreign exchange (monitoring and miscellaneous) Act by MTN Nigeria & Others. In its report issued in November 2017, the findings evidenced that MTN Nigeria did not collude to contravene the foreign exchange laws and there were no negative recommendations made against MTN Nigeria.
MTN Nigeria, as a law-abiding citizen of Nigeria, is committed to good governance and to abiding by the extant laws of the Federal Republic of Nigeria. The re-emergence of these issues is regrettable as it damages investor confidence and, by extension, inhibits the growth and development of the Nigerian economy.
We will engage with the relevant authorities and vigorously defend our position on this matter and provide further information when available. Shareholders are accordingly advised to exercise caution when dealing in the Company’s securities until a further announcement is made.
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Aus miners:
BHP Billiton (-1.15%)
Rio Tinto (-0.67%)
S32 (-1.82%)
FANGs
Facebook (+0.99%)
Amazon (+0.21%)
Netflix (+0.80%)
Google (-1.81%)
FTSE Miners:
Anglo American plc (-1.33%)
BHP Billiton plc (-1.77%)
Glencore plc (-0.60%)
Alibaba Holdings (-2.18%)
Tencent Holdings (-4.53%)
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The Unum Capital Trading Desk
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