Local & International Market Overview - 22 February 2021

  • Market Overview

South Africa Market Review

  • South African markets closed in the green on Friday, driven by prospects of a huge US stimulus and global rollouts of COVID-19 vaccines.
  • Moreover, gains in platinum and gold mining sector stocks provided further momentum to the domestic equity market.
  • Platinum miners, Northam (JO: NHMJ ) Platinum, Impala Platinum (JO: IMPJ ) Holdings and Anglo American (JO: AMSJ ) Platinum gained 4.8%, 2.5% and 1.3%, respectively.
  • Gold miners, Harmony Gold Mining and AngloGold Ashanti rose 1.8%, each.
  • On the other hand, banking firms, Nedbank Group Ltd (JO: NEDJ ) and Capitec Bank (JO: CPIJ ) Holdings dropped 0.9% and 0.4%, respectively.
  • The JSE All Share index advanced 1.3% to close at 67,464.86.

UK Market Review

  • The UK market finished firmer on Friday after the domestic economy showed signs of improvement.
  • Further, hopes that vaccine rollouts would spur economic growth bolstered investor morale.
  • Miners, Antofagasta (LON: ANTO ), Glencore (LON: GLEN ) and Anglo American PLC (LON: AAL ) gained 7.2%, 4.1% and 3.8%, respectively.
  • NatWest Group (LON: NWG ) rose 5.2% after the company stated that it was pulling out of the Republic of Ireland.
  • Moreover, the company reported a smaller-than-expected FY20 loss and restored its dividend.
  • On the flipside,AstraZeneca (LON: AZN ) and GlaxoSmithKline (LON: GSK ) declined 3.1% and 1.9%, respectively.
  • The FTSE 100 index advanced 0.1% to close at 6,624.02.

US Market Review

  • US markets ended mostly higher on Friday, on expectations that the coronavirus vaccine rollouts will bolster economic recovery.
  • Deere (NYSE: DE ) surged 9.9%, after the company reported better-than-expected 1Q21 revenue and provided an upbeat FY21 outlook.
  • Applied Materials (NASDAQ: AMAT ) soared 5.3%, after it forecasted 2Q21 revenue to be above market expectations, as demand for its semiconductor manufacturing tools picked up during a global shortage of semiconductors.
  • The S&P 500 index fell 0.2% to settle at 3,906.71, while the DJIA index marginally advanced to close at 31,494.32.
  • The NASDAQ index climbed 0.1% to end the trading session at 13,874.46.

ASIA Market Review

  • Asian markets are trading higher this morning, as expectations for faster economic growth and inflation globally boosted investor sentiment.
  • Meanwhile, China kept the one-year loan prime rate (LPR) unchanged.
  • In Japan, market heavyweight, Softbank Group (T: 9984 ) has gained 1.6%.
  • In Hong Kong, Tencent Holdings (HK: 0700 ) has dropped 1.0%. In South Korea, technology company, Lg Electronics Pref (KS: 066575 ) has added 0.6%.
  • Moreover, peer, Samsung Electronics (KS: 005930 ) has gained 0.5%.
  • The Nikkei 225 index is trading 0.5% higher at 30,155.42.
  • The Hang Seng index is trading 0.4% firmer at 30,769.23, while the KOSPI is trading 0.2% firmer at 3,114.74.

Commodities

  • At 06:00 SAST today, Brent spot prices rose 1.2% to trade at $62.84/bl, as the slow return of US crude output, that was cut by frigid conditions, raised concerns about supply just as demand is coming back from the depths of the coronavirus pandemic.
  • On Friday, Brent spot prices fell 2.0% to settle at $62.11/bl, as Texas energy companies began preparations to restart oil and gas fields shuttered by freezing weather and power outages.
  • On Friday, the Illinois North Central No.2 Yellow corn spot prices ended steady at $5.33/bushel.
  • At 06:00 SAST today, gold prices marginally declined to trade at $1,783.90/oz. On Friday, gold gained 0.5% to close at $1,784.25/oz. However, losses were capped on the back of rising US treasury yields.
  • On Friday, copper rose 4.4% to close at $8,946.75/mt. Aluminium closed 0.3% lower at $2,115.25/mt.

Currencies

  • On Friday, the South African rand weakened against the US dollar. In the US, services PMI rose more-than-expected in February, while the domestic manufacturing PMI rose in line with market expectations in the same month.
  • The yield on benchmark government bonds rose on Friday. The yield on 2026 bond rose to 7.11%. Further, the yield on 2023 bond advanced to 4.92%, while that for the longer-dated 2030 issue rose to 8.88%.
  • At 06:00 SAST, the US dollar is trading 0.2% higher against the South African rand at R14.7195, while the euro is trading 0.1% higher at R17.8423. At 06:00 SAST, the British pound has gained 0.2% against the South African rand to trade at R20.6369.
  • On Friday, the euro advanced against most of the major currencies, after a surge in demand for exports pushed activity in Germany’s manufacturing sector to a 36-month high in February. However, lockdown measures to contain the coronavirus pandemic pushed the country’s services sector into a deeper contraction. Meanwhile, business activity across the eurozone contracted again in February, as lockdown measures to restrain the coronavirus hammered the bloc’s dominant service industry.
  • At 06:00 SAST, the euro marginally advanced against the US dollar to trade at $1.2121, while it has marginally weakened against the British pound to trade at GBP0.8646.

Corporate Updates

South Africa

  • Absa Group Limited : The banking firm, in its FY20 trading statement, reported that it expects its HEPS to decline by 55.0% to 60.0% from the 2019 comparatives of R17.50 and R17.17, respectively.
  • Harmony Gold Mining Company Limited (NYSE: HMY ): The gold mining company, in its 1H21 trading update, stated that it expects its HEPS to be between 761.00c and 795.00c and EPS to be between 942.00c and 976.00c.
  • Santam Limited : The insurance company, in its FY20 trading update, stated that it expects its HEPS to be between R9.97 and R12.03 compared with R20.69. It also expects its EPS to be between 392.00c and 591.00c, compared with R19.90 posted in the comparative period.
  • Truworths International Ltd (JO: TRUJ ): The retail company announced the resignation of Mr. David Pfaff, as the Group’s Chief Financial Officer (CFO), with effect from 28 February 2021 and are hereby advised that the board of directors of the company has appointed Mr Hermanus Gideon Smit, the current company’s Divisional Director, Finance, as the acting CFO with effect from 1 March 2021 until a new CFO is permanently appointed.
  • Industrial metals are soaring on bets of an economic recovery using clean energy: Industrial metal prices are powering to the highest in years on bets that an economic recovery from the pandemic and a worldwide push for cleaner, greener energy will unleash vast amounts of pent-up demand.

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