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Kgori Capital Market Watch

LOCAL UPDATE

Feb Inflation – Inflation Remains Elevated

  • Feb22 Inflation was 10.6% v 10.5% (Kgori) v 10.6% (Jan22).
  • Inflation remained elevated, driven by elevated Transport (27.0% y/y) and Housing (7.8% y/y) inflation.
  • We expect inflation to steadily decline in 2022 due to base effects. The main upside risk to our forecast is Transport inflation as global oil prices have continued to rise. Oil prices have risen by 28% year-to-date this year.
  • We expect the BoB to implement at least one 25bps rate hike in 2022 as it walks the tightrope between rising inflation and supporting economic growth.

New Entry Requirements at Ports of Entry (POE)

  • The Ministry and Health and Wellness announced new POE requirements effective 17 Mar 22.
  • Persons wishing to enter Botswana will be required to show proof that they are fully vaccinated.
  • A person who has received their primary series of Covid-19 vaccines is considered fully vaccinated.
  • It is therefore not a requirement to provide proof of receiving a booster vaccine to be considered fully vaccinated.

Company Updates: Access Bank, Tlou Energy, Absa, RDC Property, Engen, FAR Property, Olympia Capital.

Company Results: Minergy, CA Sales.

REGIONAL UPDATE

The ZAR strengthened for the week after the US Fed Chair Jerome Powell said the US economy is strong and well positioned to handle tighter monetary policy.

ZAR 15.04 (WTD: -2.27%) v 15.39 (4 Mar 22)

INTERNATIONAL  UPDATE

US equites closed higher following comments from the Fed Chair Jerome Powell, who stated that the US economy is strong and well positioned to handle tighter monetary policy, as well as on hopes for peace talks between Russia and Ukraine.

  • NASDAQ: 13,894 (WTD: +8.18%), S&P 500 4,463 (WTD: +6.16%)

Oil prices declined for the week on a surprise buildup in US crude inventories, cease fire talks between Russia and Ukraine as well as the surge in China Covid-19 cases.

  • WTI: $104.70 (WTD: -4.23%)
  • Brent Crude: $107.93 (WTD: -4.21%)

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