Trading Day – FirstRand posts sizable increase in earnings

FirstRand posts a sizable increase in earnings.

Cryptocurrency Ethereum is to implement its long-planned “merge” to proof-of-stake today, changing its method for verifying transactions and reducing energy usage. 

Here is the biggest news of the day.

  • FirstRand posts a sizable increase in earnings. Earnings per share (EPS) increased 22% to R5.84, driven by the lower cost of credit. Topline growth was healthy, driven by a rebound in non-interest revenue. Normalized net asset value (NAV) per share increased 9% to R29.39. The leading segments that drove earnings higher were FNB and WesBank, which constitute 65% of normalized earnings, while RMB, which contributes 25% to earnings, also showed healthy growth.
  • Cryptocurrency Ethereum is due to implement its long-planned “merge” today. The change will see the network change its method of verifying transactions from validators needing to solve complex equations to validators needing to put up their own ether tokens as collateral. The process, called staking, will pull these tokens out of circulation for a yet undefined period of time, likely 6-12 months. The result will be a significant reduction in energy use, which has been plaguing Bitcoin for a long time. Ethereum has outperformed Bitcoin over the past three months in anticipation of the merge. It is up 32%, while Bitcoin is down 9%.
  • Metair reports a significant earnings decline. Revenue for the half-year period remained relatively flat, only declining 2% to R5.8 billion, although profitability was significantly hampered with operating profit declining 73%. Earnings per share (EPS) declined 76%, from R1.70 to R0.41. The company was significantly impacted by hyperinflation for Mutlu Aku in Turkey. The company did not declare a dividend. Ford’s investment into the group has been approved, creating 4400 jobs.
  • UK inflation slowed slightly in August against expectations. Headline inflation still rose by an eye-watering 9.9%, a slight reduction from the previous month’s reading of 10.1% and below expectations of 10.2%. However, core CPI – which excludes more volatile food and energy prices and is more closely watched by central banks – picked up to an annual 6.3% from 6.2%, its highest since 1992. Financial markets see an 80% chance that the BoE will raise rates by 0.75 percentage points to 2.5% on 22 September.
  • Anglo American launches €745 million sustainability-linked bond. The bonds are due in 10 years at a 4.75% interest rate. Investors will be entitled to a higher final interest payment if the company does not meet its sustainability targets to:
    • Reduce absolute greenhouse gas emissions (Scopes 1 and 2) by 30% by 2030, compared to 2016
    • Reduce the abstraction of fresh water in water-scarce areas by 50% by 2030 compared to 2015
    • Support 5 jobs off-site for every job on site by 2030+