Union agrees to US refineries contract, averting nationwide strike
South Africa Market Review
South African markets closed in the green yesterday, buoyed by broad based gains in real estate and mining sector stocks. Real estate companies, Delta Property Fund (JO:DLTJ), Attacq (JO:ATTJ) and Capital & Counties Properties (JO:CCOJ) skyrocketed 9.4%, 2.8% and 1.5%, respectively. Platinum miners, Impala Platinum (JO:IMPJ) Holdings and Anglo American (JO:AMSJ) Platinum surged 6.7% and 5.8%, respectively. Gold mining companies, Sibanye Stillwater Ltd (JO:SSWJ), Harmony Gold (JO:HARJ) and AngloGold Ashanti (JO:ANGJ) soared 6.0%, 5.8% and 2.7%, respectively. On the flipside, financial firms, Absa (JO:ABGJ) Group, Nedbank Group (JO:NEDJ) and RMB Holdings (JO:RMHJ) shed 2.0%, 1.7% and 1.2%, respectively. Retailers, Cie Financiere Richemont (JO:CFRJ) S.A., Mr Price Group (JO:MRPJ) and Lewis Group (JO:LEWJ) fell 1.6%, 0.8% and 0.6%, respectively. The JSE All Share index advanced 0.9% to close at 75,425.31.
UK Market Review
The UK market finished firmer yesterday, buoyed by broad based gains in mining and energy sector stocks. Miners, Anglo American, Glencore (LON:GLEN) and Fresnillo (LON:FRES) gained 4.6%, 4.2% and 4.1%, respectively. Oil and energy companies, Shell (LON:RDSa) and BP (LON:BP) advanced 4.4% and 3.1%, respectively. On the contrary, Polymetal International (LON:POLYP) plummeted 9.9%, even after the company maintained its FY21 production guidance and stated that operations in Russia and Kazakhstan continue undisrupted. Pearson plunged 5.9%, after US investment manager, Apollo Global Management disclosed that it has no plans to make an offer for the educational publisher, after failing to agree on terms. Retailers, JD Sports Fashion (LON:JD) and Next (LON:NXT) shed 4.7% and 3.8%, respectively. The FTSE 100 index advanced 0.6% to close at 7,578.75.
US Market Review
US markets ended lower yesterday, as investors assessed latest developments in the Russia-Ukraine conflict. Adagio Therapeutics Inc (NASDAQ:ADGI) skyrocketed 30.4%, after the company stated that primary endpoints were met for three indications in its continuing global Phase 2/3 clinical trials evaluating its investigational drug adintrevimab ADG20 for treating Covid-19. Lululemon Athletica (NASDAQ:LULU) soared 9.6%, after it reported better than expected sales for 4Q21. On the flipside, Stronghold Digital plummeted 32.0%, after the company reported less than expected revenue for 4Q21 and issued weaker guidance for FY22. The S&P 500 index fell 0.6% to settle at 4,602.45, while the DJIA index declined 0.2% to close at 35,228.81. The NASDAQ index eased 1.2% to end the trading session at 14,442.27.
Asia Market Review
Asian markets are trading mostly lower this morning, tracking overnight losses on Wall Street. In China, manufacturing activity dropped in March dampened by the impact of the COVID-19 pandemic. In Japan, Nippon Sheet Glass (T:5202) Company has shed 2.5%. On the flipside, transport company, Kawasaki Kisen Kaisha (T:9107) has soared 5.1%. In Hong Kong, Anta Sports Products (HK:2020) has eased 3.4%. On the other hand, Longfor Group Holdings has gained 3.3%. In South Korea, SsangYong Motor (KS:003620) Company has plummeted 19.2%. Meanwhile, Il Jeong Industrial Company has surged 23.2%. The Nikkei 225 index is trading 0.5% lower at 27,876.79. The Hang Seng index has declined 0.8% to trade at 22,058.29, while the Kospi index is trading 0.4% higher at 2,755.70.
Commodities
At 06:00 SAST today, Brent spot prices fell 4.1% to trade at $108.54/bl. Meanwhile, the Biden administration is considering releasing 1.00mn bls of oil per day from the US strategic reserves for several months in a move to ease soaring crude prices.
Yesterday, Brent spot prices rose 1.9% to settle at $113.16/bl, after the US Energy Information Administration (EIA) reported that US crude inventories fell by 3.40mn bls for the week ended 25 March, indicating towards tighter supplies and as investors cast worries about new Western sanctions against Moscow as Russian forces continue shelling the outskirts of Kyiv and other Ukraine cities.
Yesterday, the Illinois North Central No.2 Yellow corn spot prices rose 1.7% to $7.12/bushel.
At 06:00 SAST today, gold prices declined 0.4% to trade at $1,925.73/oz. Yesterday, gold gained 0.7% to close at $1,932.87/oz, with the Russia-Ukraine war boosting demand for the safe haven yellow metal.
Yesterday, copper rose 0.4% to close at $10,360.50/mt. Aluminium closed 3.5% higher at $3,536.50/mt.
Currencies
Yesterday, the South African rand strengthened against the US dollar. In the US, economic growth accelerated in 4Q21, but momentum slowed significantly, impacted by a surge in COVID-19 infections, along with supply chain disruptions and soaring inflation. Moreover, mortgage rate surged to a 11-year high leading to a drop in mortgage applications for the week ended 25 March.
The yield on benchmark government bonds fell yesterday. The yield on 2026 bond fell to 8.21%. Further, the yield on 2023 bond declined to 5.41% while that for the longer-dated 2030 issue fell to 9.56%.
At 06:00 SAST, the US dollar is trading 0.2% higher against the South African rand at R14.5036, while the euro is trading 0.3% higher at R16.1948. At 06:00 SAST, the British pound has gained 0.1% against the South African rand to trade at R19.0311.
Yesterday, the euro advanced against most of the major currencies. In Germany, annual inflation rose more than expected in March, as prices for natural gas and mineral oil products soared amid Russia's invasion of Ukraine. In the eurozone, economic sentiment deteriorated sharply in March, as Russia’s invasion of Ukraine dampened consumer confidence and hiked their inflation expectations to record highs. Meanwhile, consumer confidence dropped to its lowest in March. The European Central Bank President, Christine Lagarde said that the food and energy prices in the eurozone should stop rising, which should help the eurozone avoid a combination of stagnant growth and high inflation feared by economists.
At 06:00 SAST, the euro advanced 0.1% against the US dollar to trade at $1.1166, while it has gained 0.2% against the British pound to trade at GBP0.851.
Economic Updates
In March, on a MoM basis, the preliminary consumer price index (CPI) rose 3.0% in Spain, compared with an advance of 0.8% in the previous month. Market anticipations were for the CPI to climb 0.8%.
The seasonally adjusted industrial sales registered a rise of 2.3% in Italy on a MoM basis, in January. In the prior month, industrial sales had dropped by a revised 2.0%.
The producer price index (PPI) in Italy recorded a rise of 0.2% on a monthly basis, in February. In the prior month, the PPI had recorded a rise of 12.4%.
In March, on a monthly basis, the flash CPI climbed 2.5% in Germany, higher than market expectations of an advance of 1.6%. The CPI had risen 0.9% in the previous month.
In the eurozone, the economic sentiment indicator registered a drop to 108.50 in March, higher than market expectations of a drop to a level of 109.70. In the prior month, the economic sentiment indicator had recorded a revised reading of 113.90.
In the eurozone, the industrial confidence index dropped to 10.40 in March, less than market expectations for a drop to a level of 9.00. The industrial confidence index had recorded a revised reading of 14.10 in the prior month.
The services sentiment indicator in the eurozone climbed unexpectedly to 14.40 in March. In the prior month, the services sentiment indicator had registered a revised reading of 12.90.
The final consumer confidence index dropped to -18.70 in the eurozone, in March, in line with market expectations of a drop to a level of -18.70. The preliminary figures had also recorded a drop to -18.70. In the previous month, the consumer confidence index had recorded a level of -8.80.
In the US, the number of mortgage applications recorded a drop of 6.8% on a weekly basis, in the week ended 25 March 2022. The number of mortgage applications had fallen 8.1% in the prior week.
On a QoQ basis, the final annualized gross domestic product (GDP) registered a rise of 6.9% in 4Q21, in the US. The annualized GDP had registered a rise of 2.3% in the previous quarter. The preliminary figures had also indicated a rise of 6.9%.
The final personal consumption in the US advanced 2.5% in 4Q21, on a quarterly basis. Personal consumption had advanced 2.0% in the prior quarter. The preliminary figures had recorded a rise of 3.3%.
In 4Q21, on a quarterly basis, the final core personal consumption expenditure climbed 5.0% in the US, compared with a rise of 4.6% in the previous quarter. The preliminary figures had indicated an advance of 4.9%. Markets were expecting core personal consumption expenditure to climb 5.0%.
The preliminary industrial production advanced 0.1% on a MoM basis, in February, in Japan. Industrial production had dropped 0.8% in the prior month.
The NBS manufacturing PMI in China dropped to 49.50 in March, compared with a level of 50.20 in the previous month. Market anticipations were for the NBS manufacturing PMI to drop to a level of 49.90.
In China, the NBS non-manufacturing PMI registered a drop to 48.40 in March. In the prior month, the NBS non-manufacturing PMI had registered a level of 51.60.
Corporate Updates
South Africa
Trencor Ltd (JO:TREJ): The investment holding company, in its FY21 results, indicated that its other operating income rose to R22.00mn from R8.00mn posted in the previous year. Its diluted EPS increased to 3.00c as compared with a diluted loss per share of 22.00c posted in the prior year.
Glencore PLC (JO:GLNJ) halts new Russian deals: Glencore, the world’s biggest commodity trader, says it will not seek new deals in Russia but will continue its long-standing business ties in the country. The company announced at the beginning of March that it was reviewing its holdings in two large Russian companies — En+ Group International and Rosneft — and its wider trading operations in the country.