Sasfin : Ubisoft cancels three games and slashes targets

MARKET COMMENTARY

SOUTH AFRICAN MARKET COMMENTARY

Shares on the Johannesburg Stock Exchange ended higher yesterday, mirroring similar moves in global equities. Overall, the Top-40 index ended 0.77% higher while the broader All-Share index rose 0.67% to close at 78,522 points. Looking at data, Markets will look towards U.S. inflation data due later today for cues on the likely path of rates this year. In sector news, the Software and Computer Services sector as well as the Technology sector both gained 2.56%. In company news, Telkom gained a significant 9.26% while SAPPI was the biggest loser, dropping 5.55% by the end of the day's trading.

EUROPEAN MARKET COMMENTARY

European markets closed higher as investors geared up for more inflation data this week. The pan-European Stoxx 600 index closed up 0.4%, with most sectors and major bourses posting gains. Retail stocks saw the largest uptick, up 2%, while insurance bucked the trend to end the session down 1.1%. In company news, German chemicals company Wacker Chemie was up 8.8% in late afternoon trade and European real estate developer Aroundtown gained 8%. U.K. insurer Direct Line remained the worst performer, plunging 24% after announcing it would ditch its final dividend for 2022.

US MARKET COMMENTARY

US stocks rose yesterday as investors grew increasingly confident the consumer price index (CPI), being released later today, will show cooling inflation and signal to the Federal Reserve that previous interest rates hikes have worked. After CPI, investors will follow big bank quarterly results tomorrow, which kick off a new earnings season. Looking at companies, yesterday was a big day for the so-called meme stocks, with retail investors jumping into speculative trades again. Bed Bath & Beyond rallied 38%, GameStop climbed about 5% and AMC Entertainment soared 15%.

ASIA MARKET COMMENTARY

Asia-Pacific shares advanced gains as investors look ahead to the U.S. consumer price index report. In data news, inflation in China accelerated 1.8% in December compared with a year ago as food prices rose. The CPI figure was in line with expectations and higher than the previous month's reading of 1.6%. Meanwhile, Australia reported a trade surplus of 13.2 billion Australian dollars (about $9.1 million) for November, beating a Reuters forecast for AU$10.4 billion. Australia's imports fell by 1.5% in November from October, while exports dipped 0.4%. India's inflation data for December is also slated for release later today.

COMMODITY MARKET COMMENTARY

Gold prices were flat during early Asian hours today, as traders awaited key U.S. inflation data that could influence the Federal Reserve's policy path. Indian gold refiners have nearly stopped imports of gold doré, a semi-pure alloy, as grey market operators offer hefty discounts to market rates and cut into their slender margins. Meanwhile oil prices rose this morning, building on gains in the previous session as China's demand outlook improves and concerns rise over the impact of sanctions on Russian supply.

CURRENCY MARKET COMMENTARY

The rand firmed on yesterday, as the dollar weakened on global markets with investors awaiting U.S. consumer price data due today. The risk-sensitive rand traded at R16.93 against the dollar, 0.5% firmer than its previous close. Meanwhile, the dollar stood cautiously steady this morning ahead of the closely watched U.S. inflation data out later today while the sterling was little changed. The euro last traded higher while the yen got a boost on expectations that the Bank of Japan will review the side effects of its monetary easing.

LOCAL COMPANIES

THARISA PLC (THA) -2.4%

The company have reported a Lost Time Injury Frequency Rate ('LTIFR') of 0.3 per 200 000-man hours worked. Mining volumes have been impacted by unprecedented rainfall not seen in the history of the Tharisa Mine. Processing efficiencies impacted by increased processing of oxidised ore and variable ROM stockpiles. PGM output was marginally lower versus the prior quarter at 42.7 koz (Q4 FY2022: 45.3 koz) and chrome output fell as a direct result of feed and ore mix variability at 383.1 kt (Q4 FY2022:416.2 kt) with grades remaining consistent at 17%. The Vulcan Plant optimisation is continuing with increased output on track for H2 FY2023. Production guidance has been maintained at between 175 koz and 185 koz PGMs (6E basis) and 1.75 Mt to 1.85 Mt of chrome concentrates. Elevated PGM prices have been driven by PGM demand for the automotive industry and lower production from major suppliers. Chrome prices remain buoyant currently at US$260/t due to eroding Chinese stockpiles. The company are happy with the successful ground breaking at Karo Platinum Mine in Zimbabwe, the project construction is positive and ongoing. The company raised US $31.8m from bond issue for Karo Mining Holdings on the Victoria Falls Stock Exchange. The company's growth strategy is firmly on track for FY2023 with cash on hand US $213.9 million and a net cash position of US$101.1 million.

NAMPAK LIMITED (NPK) +9.8%

A dividend at the rate of 6% per annum in respect of the six months ending 31 January 2023 (2022:6.0 cents) payable on Monday, 6 February 2023 to preference shareholders recorded as such in the register of the Company at the close of business on the record date, Friday, 3 February 2023. The salient dates for the preference dividends are as follows. Last day of trade preference shares "cum" dividend is Tuesday, 31 January 2023. Preference shares trade "ex" dividend will be Wednesday, 1 February 2023 while the payment date is set for Monday, 6 February 2023. No preference share certificates may be dematerialised or rematerialized between Wednesday, 1 February 2023 and Friday, 3 February 2023, both dates inclusive. The preference dividends have been declared from income reserves. The dividend withholding tax rate is 20%, unless the shareholder is exempt from paying dividend tax or is entitled to a reduced rate in terms of the applicable double tax agreement. The net local 6.5% cumulative preference share dividend is 5.20 cents per share for shareholders liable to pay dividend tax and 6.50 cents per share for shareholders exempt from paying dividends tax. The issued number of 6.5% cumulative preference shares at the declaration date is 100 000.

INTERNATIONAL COMPANIES

Ubisoft (UBI) +0.3%

Ubisoft cancelled three unannounced games and slashed its full-year financial targets yesterday, blaming "worsening macroeconomic conditions" that have plagued the video game industry. The French game publisher said it expects 2022 net bookings to come in at 725 million euros ($779.4 million), lower than an earlier target of 830 million euros. The company cited poor performance of its Mario + Rabbids, Sparks of Hope and Just Dance 2023 titles, as well as a challenging economic environment. For the full year, Ubisoft said it expects its 2022 net bookings to fall 10%. The company had earlier forecast net bookings growth of 10%. Faced with higher prices and borrowing costs, consumers are cutting back on discretionary purchases. Gaming especially has come under pressure. Its share price sank more than 38% in 2022, erasing 3 billion euros from the company's market value.

Starbucks (SBUX) +0.3%

Starbucks corporate employees will be returning to the office at least three days a week by the end of the month. Starting Jan. 30, employees within commuting distance will be required to report to the coffee giant's Seattle headquarters on Tuesdays, Wednesdays and a third day decided on by their teams. The coffee giant's corporate workforce has been working remotely since the start of the pandemic. In September, Starbucks asked those workers to work from the office one to two days a week. But CEO Howard Schultz wrote in a memo to employees on Wednesday that badging data showed employees weren't adhering to that directive.

Apple (AAPL) +2.1%

Apple could release a MacBook Pro laptop with a touchscreen as soon as 2025. Teams inside Apple are working on the project, and the first design would include a trackpad and keyboard as well as a touchscreen, according to a report. The move, if it were to happen, would mark a significant reversal for Apple, which has said for years that touchscreen laptops are ergonomically inferior, even as competing Windows laptops now have touchscreens as a standard feature. Apple's Mac business doesn't need a shot in the arm, though. Apple's Mac business generated $40.1 billion in revenue during the company's fiscal 2022, up 14% from 2021. A touchscreen Mac would require significant software changes to accept finger taps, which require larger buttons, instead of mouse clicks. Apple's iPhone and iPads use an operating system designed for touchscreens, while macOS can currently only be controlled with a mouse and keyboard.

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