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Market Commentary | The week that was

Welcome to our final weekly commentary of 2022

Commercial liquefied natural gas (LNG) in South Africa: JSE-listed Renergen has started delivery of the country’s first domestically produced, commercial LNG – to Ardagh Glass Packaging, formerly Consol Glass, and Italtile subsidiary Ceramic Industries – as part of the initial stage of its Virginia Gas Project. LNG will substitute LPG (liquefied petroleum gas) at Ardagh Glass’s Bellville operation in the Western Cape and will supplement the pipeline of natural gas supply at Ceramic Industries’ Vanderbijlpark operations. Both businesses have agreed on a five-year contract and will use LNG as a fuel heat source for their processing plants.

SA’s biggest retailer, Shoprite, to buy Massmart stores: The Competition Tribunal has permitted Shoprite's planned acquisition of certain Massmart-owned supermarkets, wholesalers and liquor stores, as well as Massmart's Massfresh business, subject to several conditions. Shoprite originally made an offer to acquire 56 grocery stores from Cambridge Food and Rhino Cash and Carry and 43 adjacent liquor stores. The retailer also wanted to buy 10 wholesale cash-and-carry stores, 2 wholesale liquor stores, Massfresh and Fruitspot. It made Massmart an offer of R1.36 billion. The Tribunal announced on Sunday that - after a three-day merger hearing and data requirements - it has approved the proposed deal, subject to certain conditions.

Police presence to be increased: Throughout the festive season, 10,000 newly trained police officers will be deployed country wide. 40% of the new officers will assist with crowd control and ensure further police visibility. The rest of the police officers will be divided among 30 police stations across the country to assist the Sexual Investigations Unit and the Family Violence Child Protection Unit.

Markets: The South African rand was trading around the R17.20/$ mark at the end of last week; the strongest level in almost a week, on the back of stronger-than-expected domestic data. Although the rand remains quite resistant to the uncertainty surrounding load shedding, it is still weaker than it was two weeks ago due to President Cyril Rampahosa’s possible impeachment. On Monday (12 December), the rand was trading at R17.39/$, R18.27/€, and R21.267/£. Brent crude was trading at $76.55 a barrel.

Looking at the week ahead: Domestic data to be released, includes October mining output on Tuesday; November consumer inflation and October retail sales on Wednesday; and November producer inflation on Thursday. Business confidence data is also anticipated. The policy meetings of the US Federal Reserve (FED) and the European Central Bank are also scheduled for this week.

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