The JSE looks set to open to subdued Asian markets on Monday morning, with investors concerned about persistent inflation, as well as signs of a slowdown in the world’s second-largest economy.

China’s economy grew 4.9% in the third quarter of the year, less than the 5.2% expected by the market, while industrial production figures for September were also disappointing.

Retail sales fared better than expected in that month, but surging commodity prices, government regulatory interventions, and supply-chain bottlenecks are weighing on China’s growth prospects.

Surging energy costs and supply chain issues are also stoking inflation concerns, with Bank of England governor Andrew Bailey warning at the weekend that the central bank “will have to act” if it sees a risk for medium-term inflation expectations.

Markets now fully price a Bank of England rate hike by December 2021, while in the US pricing has also moved forward with a 50% chance of a June 2022 rate hike and a rate hike fully priced in by September 2022, National Australia Bank analyst Tapas Strickland said in a note.

“How risk markets respond to the bringing forward of rate hike expectations will be key to watch this week, as will anecdotes from the profit reporting season to see how firms are dealing with higher input costs and to what extent they are able to pass this onto consumers,” he said.

In morning trade the Shanghai Composite was down 0.35%, the Hang Seng 0.31% and Japan’s Nikkei 0.27%.

Tencent, which can give direction to the JSE via the Naspers stable, had lost 1.09%.

Gold was flat at $1,767.91/oz while platinum was little changed at $1,057. Brent crude was 1.12% higher at $85.82 a barrel, having now risen more than 66% so far in 2021, putting it at a three-year high.

Calgro M3, which builds lower-income residential housing and develops and manages memorial parks, is expected to return to headline profit in its six months to end-August. It said in a recent trading update this was more than just a Covid-19 bounce back, and results would reflect management’s efforts to cut costs and drive sales.



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