Yellen’s comments boost markets

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World News

Much focus was on Fed Chair Janet Yellen’s speech yesterday, which gave the financials support after sounding optimistic and stating that the central bank could gradually rise interest rates from as early as March. This helped the market extend gains for the fourth consecutive day. UK markets ended marginally lower amid lower inflation numbers and corporate updates. Asian markets have opened higher tracking overnight gains on Wall Street following Yellen’s comments and overnight trading. South African and European markets should get a boost once trading begins.

 

Image result for hedgeye

South African News

SA markets closed lower yesterday, led largely by resources and industrials. Financials were up though, mostly due to the strong rand. The rand had a very good day, up against most currencies. It’s being supported by a global ‘risk on’ view, but local unemployment figures also came in slightly better than expected. Significantly the rand has broken through the R13.20 level against the dollar, having tested it numerous times since August last year

 

Company News

Brait SE [BAT]

The investment holding company of Virgin Active and New Look have reported Net Asset Value, used to measure the performance of an investment holding company, for 31 December 2016 at R82.45 per share.  The NAV per share decreased 21.5% in the period from September to December 2016. The company’s investment in New Look took a beating since Brexit’s weakening of the pound and the UK’s struggling promotion lead retail sector. Virgin Active have surpassed New Look as Brait’s biggest investment holding. New Look have manged to grow its revenue quarter-on-quarter with strong performance in China and online sales.

 

Brait is trading at a discount to its NAV and at current levels it’s an attractive buying opportunity for the long-term investor looking to diversify offshore.

 

The Day Ahead

SA and European markets are likely to get support from positive US and Asian market sentiment after optimistic comments from Fed Chair Janet Yellen. Local markets will be watching the new re-weighted CPI basket figures very closely.

 

Key Results Out Today

SA CPI (10:00)

US CPI and retail sales (15:30)

 

Quote of the day

 

The shepherd always tries to persuade the sheep that their interests and his own are the same

-Stendhal-