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COMMODITY NEWSBRIEFS: 1 MARCH 2016

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Natasha.Havenga@transnet.net

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INDUSTRIAL BIDVEST LIFTS H1 EARNINGS, DESPITE CHALLENGING MARKETS; JOFFE TO STEP DOWN AS GROUP CEO (Engineering News, 1/3/2016) Notwithstanding “a backdrop of challenging market conditions, particularly in the Southern African region”, JSE-listed Bidvest’s headline earnings per share (HEPS) rose 13% to R10.02c, while basic earnings per share (EPS) rose 7.8% to 930.9c for the six months to December 31. Headline earnings rose 14.7% to R3.3-billion, with profit for the year up 9.5% to R3-billion. Speaking at a presentation of the group’s results in Johannesburg on Monday, Bidvest founder and CEO Brian Joffe, who would step down as CEO when the Bidvest Foodservice business was unbundled, said trading results were solid, with the group’s turnover up 9.6% to R114.5-billion. Bidvest Europe and Bidvest UK were major contributors to these increases, reflecting organic growth and assistance from currency effects. While trading conditions in South Africa were likely to remain subdued in a low-growth environment, Joffe noted that certain divisions had been realigned to cater for succession and to streamline the group’s service offering to customers. To complement the group’s existing product and service offering, it aims to pursue local and international opportunities. Joffe stressed that longevity was created when corporations were willing to change. In changing the business model, while retaining its principles, Bidvest had been able to regroup, re-energise, refocus and reposition itself to ensure its competitiveness, he stated. IRON KUMBA IRON ORE TO APPEAL R5.5BN TAX RULING (Mineweb, 1/3/2016) Kumba Iron Ore, majority owned by Anglo American, will appeal against a South African tax bill of R5.5 billion ($341 million), or almost a quarter of its market value. The sum includes R3.7 billion in interest and penalties and relates to the tax years from 2006 to 2010, the company said in a statement on Monday. It applies to Sishen Iron Ore Co, which is 73.9% owned by Kumba. Earlier this month, Kumba had said it may be liable for an extra R1.8 billion in tax, not including additional charges. Sishen “has cooperated fully with Sars during the course of the audit, but, supported by its specialist tax and legal advisers, disagrees with Sars’ audit findings,” the company said. Faced with an iron ore price that’s down 67% since the beginning of 2013, parent Anglo American said this month it will exit its 69.7% stake in Kumba by next year. Kumba had been a major source of profit for Anglo’s dividends since its listing in 2006 until last year.

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FUEL OIL PRICES DIVERGE ON SUPPLY GLUT (News24, 1/3/2016) Oil prices diverged on Monday as traders balanced US demand hopes against the stubborn supply glut that has plagued the market in recent years. Around 14:00, the US benchmark West Texas Intermediate (WTI) for delivery in April declined 22 cents at $32.56 a barrel. In London, Brent North Sea crude for April advanced 23c to $35.33 a barrel compared with Friday's close. Crude futures had risen in earlier Asian trading on Monday, boosted by hopes that strengthening growth in top global consumer the United States will soak up some of the chronic supply glut. Chief market strategist Michael McCarthy at CMC Markets in Sydney said last week's better-than-expected US growth and manufacturing data signalled stronger demand for oil. Oil rallied sharply last week on hopes that top producers will cut output, but McCarthy said traders have "heavily discounted" speculation of a deal between members of the OPEC cartel. "Amongst traders OPEC has zero credibility, I don't think that as an organisation it factors into thinking of the end users of the market," McCarthy said. "Traders just have no faith that OPEC has the capacity to do anything." Saudi Arabia, as well as Qatar and Russia, recently announced a preliminary deal to freeze output at January levels, should other major producers followed suit. But Saudi Arabia, OPEC's largest oil producer, has since ruled out a production cut and Iran has dismissed joining a freeze. MINERAL MINING MORE THAN 36 000 SA MINING JOBS UNDER THREAT –UNION (Mineweb, 1/3/2016) South Africa’s National Union of Mineworkers (NUM) said on Monday more than 36 000 jobs could be lost in the embattled industry over the next three months, around 7% of the roughly 500 000-strong labour force. The South African mining industry is under pressure from sinking metal prices and soaring costs, which have triggered a fresh wave of layoffs across a sector that has shed hundreds of thousands of jobs over the past two decades. The jobs immediately under threat have been announced by several companies including Anglo American units Kumba Iron Ore and Anglo American Platinum. The NUM General Secretary David Sipunzi told a media briefing that the union hoped talks with the companies – part of the legal process before workers can be laid off – would result in fewer jobs being lost. GENERAL SA’S TRADE BALANCE SWINGS TO RAND DEFICIT IN JANUARY (Moneyweb, 1/3/2016) South Africa’s trade balance swings to a deficit R17.87 billion ($1 billion) in January from a revised R7.56 billion surplus in December, the national revenue agency said on Monday. Exports were down by 18.8% to R71.5 billion on a month-on-month basis, while imports rose by 11% to R89 billion on a month-on-month basis, the South African Revenue Service said in a statement. The consensus for the trade deficit was R14.10 billion. In a flash comment, Nedbank’s Economic Unit said: “A large deficit is usual in January as imports recover from the slowdown during the December break and exports struggle from low production over the festive season. “The performance of exports during 2016 will remain largely dependent on the recovery of commodity prices as well the improved competitiveness of manufactured exports following significant currency weakness, although softer global demand will constrain growth. However, any disruptions to domestic production, from power shortages to labour instability, would inhibit the recovery. “On the import side, low international oil prices will continue to keep the oil import down, while machinery purchases will continue to moderate as some of the major infrastructure projects near completion. A sharp rise in agricultural imports is likely due to the drought. “The trade figures are volatile and have no direct impact on monetary policy,” stated Nedbank. CURRENCIES AND PRICES

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JSE AS AT 17:00PM 29 FEBRUARY 2016

All Share Index

29/02 49,415 - 0.03%

Industrials Index

29/02 40,543 + 0.19%

Financials Index

29/02 38,981 - 0.78%

Top 40 Index

29/02 43,803 - 0.13%

Industrial 25 Index

29/02 68,003 + 0.02%

Financial 15 Index

29/02 14,287 - 0.96%

Resources 10 Index

29/02 27,449 + 0.61%

Alt-X Index

29/02 1,508 - 0.02%

WORLD INDICATORS

FOREX

Rand/Dollar 06:08 15.8802 - 2.14%

Rand/Pound 06:55 22.0885

- 1.37%

Rand/Euro 06:55 17.2801 - 2.24%

COMMODITIES

Gold (usd/oz) 06:58 1,244.70 + 1.79%

Platinum (usd/oz) 06:46 936.00

+ 0.67%

Brent (usd/barrel) 06:53 36.49 + 3.96%

WORLD MARKETS

Wall St (DJIA) 29/02 16,517 - 0.74%

Germany (DAX) 29/02 9,495

+ 1.76%

Japan (Nikkei) 06:57 16,082 + 0.34%

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3 month

(Business Report, 1/3/2016)

(TFR Commercial Management: Business Performance Dept)

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Petrol/ Diesel Price

YR2016 06-Jan-

16 03-Feb-

16 02-Mar-

16 06-Apr-

16 04-May-

16 01-Jun-

16 06-Jul-

16 03-Aug-

16 07-Sep-

16 05-Oct-

16 02-Nov-

16 07-Dec-

16

COASTAL

95 LRP (c/l) 1194.00 1200.00

95 ULP (c/l) 1194.00 1200.00

Diesel 0.05% (c/l) 972.47 910.47

Diesel 0.005% (c/l) 977.87 914.87

Illuminating Paraffin (c/l) 594.028 535.028

Liquefied Petroleum Gas

(c/kg) 1892.00 1893.00

GAUTENG

93 LRP (c/l) 1209.00 1215.00

93 ULP (c/l) 1209.00 1215.00

95 ULP (c/l) 1237.00 1243.00

Diesel 0.05% (c/l) 1005.17 943.17

Diesel 0.005% (c/l) 1010.57 947.57

Illuminating Paraffin (c/l) 647.028 588.028

Liquefied Petroleum Gas

(c/kg) 2074.00 2075.00

YR2015

07-Jan-

15

04-Feb-

15

04-Mar-

15

01-Apr-

15

06-May-

15

03-Jun-

15

01-Jul-

15

05-Aug-

15

02-Sep-

15

07-Oct-

15

04-Nov-

15

02-Dec-

15

COASTAL

95 LRP (c/l) 1083.00 990.00 1086.00 1246.00 1246.00 1293.00 1334.00 1283.00 1214.00 1218.00 1196.00 1197,00

95 ULP (c/l) 1083.00 990.00 1086.00 1246.00 1246.00 1293.00 1334.00 1283.00 1214.00 1218.00 1196.00 1197,00

Diesel 0.05% (c/l) 997.49 895.49 969.49 1090.09 1085.09 1134.09 1138.09 1062.27 1008.27 1061.27 1052.27 1048,47

Diesel 0.005% (c/l) 1001.89 899.89 973.89 1096.49 1091.49 1137.49 1141.49 1067.67 1016.67 1067.67 1057.67 1055,87

Illuminating Paraffin (c/l) 697.728 595.728 668.728 690.828 685.828 727.828 733.828 663.828 608.828 658.828 656.828 657,028

Liquefied Petroleum Gas

(c/kg) 1829.00 1679.00 1833.00 1918.00 1935.00 2035.00 2091.00 2002.00 1887.00 1898.00 1851.00 1847,00

GAUTENG

93 LRP (c/l) 1102.00 1009.00 1105.00 1261.00 1261.00 1308.00 1352.00 1301.00 1232.00 1230.00 1208.00 1209,00

93 ULP (c/l) 1102.00 1009.00 1105.00 1261.00 1261.00 1308.00 1352.00 1301.00 1232.00 1230.00 1208.00 1209,00

95 ULP (c/l) 1124.00 1031.00 1127.00 1289.00 1289.00 1336.00 1377.00 1326.00 1257.00 1261.00 1239.00 1240,00

Diesel 0.05% (c/l) 1028.09 926.09 1000.09 1122.79 1117.79 1166.79 1170.79 1094.97 1040.97 1093.97 1084.97 1081,17

Diesel 0.005% (c/l) 1032.49 930.49 1004.49 1129.19 1124.19 1170.19 1174.19 1100.37 1049.37 1100.37 1090.37 1088,57

Illuminating Paraffin (c/l) 747.928 645.928 718.928 743.828 738.828 780.828 786.828 716.828 661.828 711.828 709.828 710,028

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Liquefied Petroleum Gas

(c/kg) 2011.00 1861.00 2015.00 2100.00 2117.00 2217.00 2273.00 2184.00 2069.00 2080.00 2033.00 2029,00

(SAPIA online)

Daily prices for 29 February 2016

LME Official Prices, US$ per tonne

Contract Aluminium Alloy Aluminium Copper Lead Nickel Tin Zinc NASAAC

Cash Buyer 1565.00 1621.00 4704.50 1777.00 8415.00 16290.00 1784.50 1660.00

Cash Seller & Settlement 1575.00 1621.50 4705.00 1777.50 8420.00 16295.00 1785.00 1660.50

3-months Buyer 1590.00 1585.00 4690.50 1769.00 8450.00 15970.00 1780.00 1670.00

3-months Seller 1595.00 1585.50 4691.00 1770.00 8455.00 15975.00 1781.00 1675.00

15-months Buyer 15680.00

15-months Seller 15730.00

Dec 1 Buyer 1660.00 1640.00 4670.00 1788.00 8570.00 1783.00 1725.00

Dec 1 Seller 1670.00 1645.00 4680.00 1793.00 8670.00 1788.00 1735.00

Dec 2 Buyer 1690.00 4675.00 1805.00 8670.00 1775.00

Dec 2 Seller 1695.00 4685.00 1810.00 8770.00 1780.00

Dec 3 Buyer 1750.00 4685.00 1835.00 8755.00 1773.00

Dec 3 Seller 1755.00 4695.00 1840.00 8855.00 1778.00

(London Metal Exchange, 1/3/2016)

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