J200 Market Commentary: Global Equities Down But Off The Lows

Oct 24, 2018

Tuesday saw another down day across global markets as the sellers remained in control for much of the session on the JSE, across Asia as well in Europe as contagion and investor nervousness kept fingers on the selling button.

On the Top 40 index, only 3 out of 40 shares closed in the green, this being British American Tobacco, Anglogold Ashanti and Anglo American Platinum while the downside was lead by Aspen Pharmacare, Kumba Iron Ore (which provided a muted production and sales report), Naspers and Sasol which was lower as oil prices declined sharply following an announcement by Saudi Arabia to make up for any supply disruptions with higher output. Also adding pressure on the downside were financial services shares such as banks which was down by 2.6%.

In Europe, stocks ended in the red with the DAX, FTSE100 and CAC40 closing lower by 2.17%, 1.24% and 1.69% respectively while the broader EuroStoxx 50 shed 1.50%, lead lower by Bayer which declined by 9.52%.

In the commodities space, Gold experienced some late-afternoon selling as US Futures rose, leaving the safe-haven with a lack of bids, while Brent Crude Oil this morning is pairing it's losses following a nearly 5% decline for the previous session.

This morning in Asia, stocks are on the rise as a "recovery" on Wall Street helps to lift sentiment. Tencent is higher by 1.22%. Today, the major focus locally will be the Medium Term Budget Policy Statement (MTPBS), presented by Finance Minister Tito Mboweni in Parliament.

JSE Major Sectors

Resources 10 -1.66%
Industrial 25 -2.42%
Financial 15 -2.22%



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Company News

Kumba Iron Ore Limited production and sales report for the third quarter ended 30 September 2018

Kumba Iron Ore Limited production and sales report for the third quarter ended 30 September 2018

Kumba continued to improve on safety and delivered a solid operating performance, while maintaining production and sales volumes in line with guidance. Throughout this report, production and sales volumes referred to are 100% of Sishen Iron Ore Company Proprietary Limited (“SIOC”), and attributable to shareholders of Kumba as well as the non-controlling interests in SIOC.

Overview: • Safe production ensured Kumba remained fatality free and continued to improve on multiple safety metrics. • Production volumes reduced by 9% to 10.5Mt as planned, to offset elevated stock levels arising from rail constraints in H1 2018. • Export sales decreased by 10% to 9.7Mt as a result of scheduled refurbishment by Transnet.



Total production volumes decreased by 9% to 10.5Mt (Q3 2017: 11.5Mt) as planned, to offset elevated stock levels at Sishen and Kolomela arising from Transnet rail constraints in H1 2018. Production volumes were also impacted by the slight decrease in processing plant yields as Kumba focused on producing high quality products to maximise the value of tonnes railed to port and benefit from the strong demand for high-grade ore.

Production at Sishen and Kolomela reduced by 10% to 7Mt (Q3 2017: 7.8Mt) and 6% to 3.5Mt (Q3 2017: 3.7Mt), respectively. Waste stripping at Sishen increased by 7% to 45Mt (Q3 2017: 42Mt) and remained flat at Kolomela (Q3 2017: 16Mt), as we continued our progress towards benchmark efficiency.

Export sales decreased by 10% to 9.7Mt (Q3 2017: 11.4Mt) due to the scheduled refurbishment of the ship loaders at Saldanha which resulted in single loading of vessels during the quarter. Total finished stock increased to 6.6Mt from 6.2Mt at 30 June 2018.

Guidance Kumba continued to work closely with Transnet to improve logistical performance and good progress has been made during the quarter. As a result, the 2018 full year guidance announced in Kumba's 2018 interim results on 24 July 2018 has been maintained as follows:

Total production of 43-44Mt

– Sishen 29-30Mt
– Kolomela 14Mt
– Waste
– Sishen 170-180Mt
– Kolomela 55-57Mt
– Total sales of 42-44Mt