Curro surged 6.12% yesterday to close at R43.50 per share, after the group announced it will be pursuing its sixth rights offer. In the announcement, Curro advised shareholders it intends to raise a maximum of R1.07bn by way of a partially underwritten renounceable rights offer of 32,442,525 new Curro ordinary shares. This will be offered to qualifying shareholders at a subscription price of R33.00 per Rights Offer share, in the ratio of 9.09091 Rights Offer shares for every 100 Curro ordinary shares held on the Rights Offer record date. The record date is anticipated to be on or about Friday, the 22nd of April 2016.
US markets rose sharply yesterday, with the S&P 500 closing at its highest level this year. This followed dovish comments by Federal Reserve Chair Janet Yellen. In her first statement since March FOMC meeting, Yellen called for caution on raising interest rates, citing a number of global risks. As a result, all 10 major S&P sectors ended in positive territory, with the S&P reversing earlier losses to record its largest 1-day gain in twelve sessions. At the close, the S&P 500 was trading 0.88% higher at 2,055.01 index points, while the Dow Jones and NASDAQ added 0.56% and 1.67% respectively.
Trading across the globe has been intermittent with various markets closed for the holidays. Last Thursday, which seems a very long time ago now, the local market ended lower. It was weighed down by a decline in both global markets and a slump in banking and financial shares. By the close, the JSE All Share index had fallen 0.47% to trade at 52,323.80 index points, while the Top 40 lost 0.57%.
It was a busy day on the market yesterday. Volumes were enormous thanks to futures close out, an FOMC inspired rally and a wild local currency, driven in part, by the political turmoil surrounding the Gupta/Jonas bombshell. And, let’s not forget, amid all the chaos, SARB opted to increase the repo rate by 25 basis points. As a result, the local market decided to close at its highest level this year, primarily boosted by a surge in banking stocks. At the close, the All Share had gained 0.96% to settle at 53,190.60 points, while the Top 40 added 0.73%. The banking index featured as the top performer, up 5.38%, following a 6.75% uptick in First Rand and a 6.67% increase in Barclays Africa. The gold index also traded sharply higher, up 4.96%, with Sibanye gaining 10.77%. Lastly, the platinum index added 3.06%, followed by a 2.27% and 2.23% increase in the financial and resource indices.
Sibanye Gold ended marginally lower on Wednesday, down 0.31%, despite an uptick in the gold index. Yesterday also brought news that SA’s Competition Tribunal had approved Sibanye’s proposed takeover of Aquarius Platinum and some of Anglo American Platinum’s Rustenburg mines. However, the approval comes with the condition that retrenchments must be limited to 260 staff over a two-year period. The two transactions, which are valued at R9.5bn, will see Sibanye Gold change its name to Sibanye Resources, with the group becoming a significant precious metals producer rather than just a gold miner.
In a trading statement for the six months ended 31 March 2016, Astral advised shareholders it expects headline earnings per share to decrease by between 20% and 30%. This is largely as a result of increased feed costs as drought conditions force up maize prices. The company also highlighted the switch away from poultry products as the SA consumer continues to feel the pinch. The difficult situation was further exacerbated by high levels of promotional activity owing to higher stock levels from both imported product and local production. As a result, headline earnings per share are expected to come in between 701 cents and 801 cents, down from 1,001 cents in the previous corresponding period. Earnings per share are expected to decline by a similar margin and come in at between 699 cents and 799 cents, down from 999 cents previously. The group expects to releases interim results on the 16th of May 2016.
MTN once again featured in the news on Friday, after the group released a SENS advising shareholders not to make decisions based on media speculation. This follows on from reports MTN had proposed to pay $1.5bn in order to settle the outstanding dispute, with the payment comprising cash instalments, bond purchases and network access. Although the alleged offer is substantially lower than the $3.9bn fine, its remains considerable higher than the $600mn provision the company put aside. The market appeared to have mixed feelings on the stock, as the share fell 1.67% to close at R145.03, despite gaining as much as 3.6% earlier in the session.
Kumba Iron Ore featured among the top performers during yesterday’s session, as the stock added an astounding 34.62% to close at R110.95 per share. This comes after iron ore recorded its largest 1-day increase on record, with the commodity reaching a 9-month high of $62.60 a metric ton during the session. This surge has resulted in iron ore trading almost 70% higher than its $37 per metric ton low on the 11th of December 2015. Kumba Iron Ore has now gained 136% over the last month and is around 170% higher in 2016 alone.
On Friday, Old Mutual ended marginally higher, up 0.28% settling at R39.18. However, over the weekend, Sky News reported the group was looking to split itself into four standalone businesses. A break-up of Old Mutual, will see the separation of its Nedbank investment, its UK wealth unit, its emerging market assets and its institutional asset management businesses. On Saturday evening, the group confirmed it was considering the move, but stressed no decision has yet been made. Old Mutual also indicated it will provide a further update to investors on Friday the 11th of March when it reports its 2015 results.
MTN finished up 4.33% after spiking as much as 12.59% during the day. The exaggerated movement came after the group released results for the year ended 31 December 2015, in which revenue increased 0.1% to R146.353bn and group subscribers rose by 4.1% to 232.5mn. This 4.1% increase was in spite of disconnecting 10.4mn subscribers in Nigeria and Uganda due to regulatory requirements. During the period, data revenue increased by 30.2% to R33.874bn, offsetting a 5.6% decline in voice revenue. Overall, EBITDA decreased by 8.6% to R59.918bn, while the EBITDA margin fell by 3.9 percentage points to 40.9%. As a result, reported basic headline earnings per share fell by 51.4% to 746 cents. It must be noted this was largely as a result of the R9.287bn provision that was made for the Nigerian regulatory fine, which negatively impacted headline earnings per share by 402 cents. Excluding the effect of the provision, as well as number of other factors, headline earnings per share declined by 14.3%. Lastly, the board declared a final dividend of 830 cents per share, bringing the total dividend for the year to 1,310 cents, representing a 5.2% increase on the previous period.