HomeMarket OverviewSA Market Overview | 1 - 5 July

SA Market Overview | 1 - 5 July

SA Market Overview | 1 - 5 July


●     Investors initially responded positively to news of President Cyril Ramaphosa's new coalition government, with the USD/ZAR falling from R18.52 to R17.96 before rebounding to R18.36 by Monday's close. Despite this initial optimism, the rand is expected to enter a consolidation phase between R18.20 and R18.70, as the new government is unlikely to have an immediate impact on economic growth  or the broader reform process.


●     An index tracking expected business conditions in six months time for the South African manufacturing industry surged to 68.1 in June, the highest since February 2022, driven by easing political uncertainty and optimism for improved demand. This increase follows President Cyril Ramaphosa's announcement of a new cabinet, featuring business-friendly opposition politicians and continued support for Finance Minister Enoch Godongwana, signalling efforts to revive economic growth.


●     Clicks announced it will sell its shareholding in Unicorn Pharmaceuticals following a Constitutional Court ruling that prohibits the company from owning pharmacies while producing its own generic drugs. This decision aims to resolve an eight-year legal challenge and allows for the issuance of new pharmacy licences. Following the announcement, the groups share price increased by 2.3%, trading at R352.27 


●     A methane explosion on Saturday caused a fire at Anglo American Grosvenor underground mine in Queensland and halted production. It could potentially take months to extinguish. This incident affects about 30% of the company's annual coking coal production and complicates plans to sell its coal assets, which were anticipated to fetch about $3 billion. The share closed -2.5% lower on Monday.


●     Capitec has launched its new life insurance product, Capitec Life Cover, with premiums that will not increase annually, providing clients with certainty unless additional cover is taken. The company realised that rising premiums are a key reason for policy cancellations and Capitec's offering aims to address the industry trend where premiums rise 5-8% annually without increased coverage. The product targets the vast insurance gap in South Africa, where only 10% of the population has life insurance, and simplifies the application process by eliminating medical tests and offering online sign-ups.


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