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Market Commentary
Market Commentary for Thursday 24 May 2018

The All Share Index opened firmer by 190 points or 0.33% on Thursday following Wednesday’s rebound in US stocks. Our local bourse came under pressure in afternoon trade and the MPC unanimously decided to keep the repurchase rate unchanged at 6.5%. After equity prices drifted lower, we eventually ended the trading session 0.60% in the red. Financials declined 0.83%, led by Barclays Africa and Firstrand which closed lower by 1.16% and 0.64% respectively. Resources were the worst performing sector and the index closed lower by 0.92% as Anglo American and BHP Billiton closed lower by 2.19% and 1.95% respectively. The gold miners bucked the trend to close stronger by 2.09% and listed property declined 0.09%. On the company front, Tigerbrands announced their results for the half year ending 31 March 2018 and the salient features were a 4% decline in revenue to R15.7bn, an 8% decline in operating income to R2bn and a 16% decline in HEPS to 868c compared to the 1036c disclosed for the previous corresponding period. The company’s gross profit margin expanded by 80bps to 33.3% and a gross dividend of 378c was declared. The stock closed lower by 4.58%. Famous Brands declared their full year results for the year ending 28 February 2018 and revenue was up 23% to R7bn and operating profit before non-operational items was down 5% to R890m whilst HEPS were 8% lower to 393c. Mediclinic announced their results for the full year ending 31 March 2018 and the company disclosed a 4% rise in revenue to ?2.87bn (Up 3% in constant currency terms) and a ?492m reported loss which was impacted by a non-cash Spire impairment charge and other exceptional items. The company’s cash conversion declined to 90% from 98% of adjusted EBITDA in the previous comparative period. A final dividend of 4.70 pence was declared and the stock closed heavily lower by 8.82%. The Foschini Group released their results for the full year ending 31 March 2018 and group retail turnover was up 21.4% (23% in constant currency) to R28.6bn whilst the business’ gross margin improved to 52.5% from the 49.7% disclosed previously. The company reported a 3.4% rise in HEPS (Excluding acquisition costs) to 1136.5c. A final gross dividend of 420c was declared and the stock closed 7.37% in the red. On the economic front, the leading economic index in Japan decreased to 105 index points in March from 105.90 index points in February 2018. The South African Reserve Bank left its benchmark repo rate unchanged at 6.5% after trimming it by 25bps in the previous meeting and matching market expectations. The GDP in Germany expanded 2.3% in the first quarter of 2018 over the same quarter of the previous year. The GfK consumer climate indicator for Germany edged down to 10.7 going into June 2018 from 10.8 in the previous month and slightly missing market consensus of 10.8 and the data point was the lowest reading since December 2017. Retail sales in the UK increased 1.4% year-on-year in April 2018, following an upwardly revised 1.3% in the previous month and well above market expectations of a 0.1% gain. The number of Americans filing for unemployment benefits increased by 11 000 to 234 000 in the week ending 19 May 2018, above market expectations of 220 000 and it is the highest reading in seven weeks. Sales of previously owned houses in the US declined 2.5% month-on-month to a seasonally adjusted annual rate of 5.46m in April 2018 from 5.6m in March, compared with market expectations of a 0.2% drop to 5.57m. Total value traded for the day was recorded at R21.057bn

Market Commentary
The Day Ahead for Friday 25 May 2018

US stocks partially rebounded from early declines that were sparked by the cancellation of the US-North Korea summit. The Dow Jones Industrial Average and S&P500 closed lower by 0.30% and 0.20% respectively, whilst the Nasdaq was weaker by 0.02%. The Asian bourses are mostly softer this morning and Tencent has declined 1.13% whilst the Hang Seng is weaker by 0.42% thus far. BHP Billiton has surrendered 2.51% in Australia whilst the Australian ASX is trading 0.05% in the red so far. European markets are set for a weaker open and traders can expect a bearish start to trading on our local bourse this morning.

News Articles
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Fin24.com | KPMG 'rogue unit' probe only focused on brothel, not SARS 4 as in service agreement
5/25/2018 7:59:10 AM

The service agreement between SARS and KPMG suggests the auditing firm, when producing its controversial "rogue unit" report, did not fully meet its contractual obligations.

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Fin24.com | INSIDE LABOUR: Court threat to the PIC
5/25/2018 7:51:34 AM

The PIC, the state-owned manager of nearly R2trn of public sector workers’ pension funds has until month end to “come clean” or face formal legal action, says Terry Bell.

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Fin24.com | Blade Nzimande on Prasa's annual report, inquiry and Metrorail
5/25/2018 7:33:33 AM

Minister of Transport Blade Nzimande says it is “unacceptable” that the Passenger Rail Agency of South Africa has not yet submitted its 2016/2017 annual report.

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Fin24.com | Property experts weigh in on latest interest rate decision
5/24/2018 10:15:01 PM

Although growth prospects for the South African housing market are improving, a "steady hand" is needed from the Reserve Bank regarding the repo rate, says Dr Andrew Golding.

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Fin24.com | SOE board changes a blow to state capture – BLSA's Bonang Mohale
5/24/2018 9:34:54 PM

Business and civil society have welcomed changes to the boards of state-owned entities announced by Public Enterprises Minister Pravin Gordhan.

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Fin24.com | Bad guys sometimes sit in Sandton offices – expert
5/24/2018 8:48:38 PM

"Bad guys" don't always lurk on the corner with a gun – sometimes they're professionals in Sandton offices, says Michael Meadon, a governance and risk management expert at Thomson Reuters South Africa.

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Fin24.com | SARB should be independent even if it is nationalised - Ramaphosa
5/24/2018 8:01:09 PM

President Cyril Ramaphosa says he is committed to the independence of the South African Reserve Bank, even as the government considers nationalising it.

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Fin24.com | Denel board gets three new members
5/24/2018 7:22:37 PM

Public Enterprises Minister Pravin Gordhan has confirmed Denel's new board, which includes three new appointments.

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Fin24.com | Capitec slams Viceroy over 'emotive' public campaign
5/24/2018 7:01:58 PM

Capitec has issued a statement in response to Viceroy's latest jab, condemning the short-seller for starting with a "strongly-worded" and "emotive" public campaign that let misunderstandings fester.

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Fin24.com | Cabinet approves bill to regulate medical schemes
5/24/2018 6:31:56 PM

Cabinet has approved the medical schemes amendment bill, which will be published in the government gazette for public comment.

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Fin24.com | Top 5 on Fin24: Gordhan appoints Phakamani Hadebe as Eskom CEO, SARB keeps interest rates unchanged
5/24/2018 6:02:27 PM

A roundup of Thursday's top economic and finance reads on Fin24.

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Fin24.com | Meet Transnet's six new board members
5/24/2018 6:00:43 PM

Several new appointments to the Transnet board were among the changes to state-owned enterprises announced by Public Enterprises Minister Pravin Gordhan.

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Fin24.com | Hogan Lovells report lifts veil on Makwakwa's Mercedes Benz money trail
5/24/2018 5:40:47 PM

The report shows that a money trail consisting of nine transfers between seven companies ended with a payment of R200 000 to Makwakwa, who used it to pay towards a Mercedes Benz for his partner.

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Fin24.com | SA interest rates unchanged
5/24/2018 4:37:35 PM

The monetary policy committee of the South African Reserve Bank has decided to keep the repo rate unchanged.

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Fin24.com | ACSA calls for name proposals for Cape Town International, 3 other airports
5/24/2018 3:58:12 PM

Airports company ACSA has announced that it is in the process of accepting suggested names for four of the airports under its management.

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Fin24.com | BuzzFeed opens new Hollywood chapter With R Kelly documentary
5/24/2018 3:30:26 PM

BuzzFeed is getting more serious about Hollywood.

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Fin24.com | AG given more teeth to refer audits for law enforcement
5/24/2018 2:47:18 PM

The Standing Committee on the Auditor General has approved amendments to the Public Audit Act, giving the Auditor General of South Africa more power to manage "real and immediate" consequences.

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Fin24.com | INFOGRAPHIC: Twelve products costing you over 6% more than a year ago
5/24/2018 2:33:07 PM

Statistics South Africa has released the April Consumer Price Inflation index, showing that costs increased 4.5% year-on-year. Here's what you’re paying more – and less – for.

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Fin24.com | Name change for Philips Lighting
5/24/2018 2:26:00 PM

The intention to change the name of Philips Lighting to Signify was recently announced.

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Fin24.com | Tough UK conditions dampen Famous Brands performance
5/24/2018 1:58:40 PM

Famous Brand revenue jumps 23% to R7bn, helped by strong performance from its South African operations while the UK business suffered from difficult trading conditions

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CML
Heads up: Coronation Fund Managers - 1H18 results
5/24/2018

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REA
Heads up: Rebosis 1H18 results - Cleaning house
5/23/2018

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REB
Heads up: Rebosis 1H18 results - Cleaning house
5/23/2018

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CML
Heads up: Coronation Fund Managers - 1H18 results
5/23/2018

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SAP
Heads up: Sappi - Better than expected 2Q18 results
5/22/2018

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CFR
Heads up: Richemont FY18 results review
5/22/2018

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RDF
HEADS UP: Redefine 1H18 results - staying afloat
5/21/2018

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AEL
Heads up: Altron FY18 results
5/21/2018

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ARL
Heads up: Astral Foods 1H18 results - When the stars align
5/21/2018

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SNV
Heads up: Santova FY18 results - Further margin improvement
5/18/2018

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Charts Indices Currencies Metals & Brent Oil Gainers & Losers
CHARTS
International Indices
Name Value Move
DJ Ind.  24,811.76   -75.05  -0.3%
DJ Trans  10,852.75   125.40  1.2%
NASDAQ  7,424.43   -1.53  0.0%
NYSE S and P500 INDEX  2,727.76   -5.53  -0.2%
FTSE 100  7,716.74   -71.70  -0.9%
XETRA DAX INDEX  6,271.85   -81.89  -1.3%
DAX INDEX  12,855.09   -121.75  -0.9%
HONG KONG HANG SENG INDEX  30,626.57   -133.84  -0.4%
NIKKEI 225 INDEX  22,450.79   13.78  0.1%
Major JSE Indices*
Name Value Move
OVERALL  56699   0.00  0.0%
TOP 40  50346   0.00  0.0%
ALL GOLD  993   0.00  0.0%
INDUSTRIAL  73685   0.00  0.0%
FINANCIAL  16570   0.00  0.0%
RESOURCES  39430   0.00  0.0%
Delay = 15 minutes
Currencies
Name Value Move
ZAR/ / AUD  9.41   -0.02 -0.2%
ZAR/ / CHF  12.54   -0.02 -0.1%
USD/ / EUR  1.17   0.00 -0.1%
ZAR/ / EUR  14.57   -0.01 -0.1%
USD/ / GB  1.34   0.00 -0.2%
ZAR/ / GBP  16.63   -0.02 -0.1%
YEN/ / ZAR  8.80   0.02 0.3%
JPY/ / USD  109.59   0.36 0.3%
ZAR/ / USD  12.44   0.00 0.0%
Precious Metals & Brent Oil
Name Value Move
Brent Oil  78.42   -0.40 -0.5%
Palladium  976.99   0.44 0.0%
Platinum  911.32   1.29 0.1%
Silver  16.61   -0.05 -0.3%
Gold  1,302.91   -1.63 -0.1%
Top 5 Gainers -- Delayed
SABLE PLATINUM LTD  31.9
Sekunjalo Inv Ltd  13.0
ANOORAQ RESOURCES CORP  11.6
Sacoil Holdings Ltd  11.1
AFLEASE GOLD LTD  4.8
Top 5 Losers -- Delayed
Forbes & Manhatt Coal  -16.7
Coal of Africa Ltd  -14.3
Delta Africa Prop Hldg  -7.0
Premier Food Fishing L  -3.3
Allied Electronics Cor  -2.7

PRICES (15 minute delay)

Delta Int Prop Hldg L : DLI 1500  0 | Pharmaceuticals & Biot : PHAR 14385  237 | eRAFI Overall SA Index : RAFISA 4800  -29 | Real Estate Developmen : REDS 855  1 | Basic Materials : BASM 26208  655 |

SENS (15 minute delay)

| CSP500 : Listing of 125 000 additional CSP500 Securities| NVE : Summarised audited consolidated results for the year ended 28 February 2018 and D| PREFTX : Delisting of 500 000 Preftrax Securities - PREFTX| ESR : Postponement or Results Release| S32 : Daily Share Buy-Back Notice| LBR : Update on Stabilisation| STXEMG : Listing Of Additional SATRIXEMG Securities - STXEMG| RPL : Transaction in own shares| OML : Old Mutual Plc Court Meetings And General Meeting| CFR : Richemont reaches 95% of YNAP ordinary shares| ATON : ATON GmbH| JSE : [06:31:00]: Start of Day. Group <1> - Please wait, downloading details