SOUTH AFRICA MARKET REVIEW
- South African markets closed in the green yesterday, buoyed by broad based gains in mining sector stocks.
- Anglo American (JO:AMSJ), African Rainbow Minerals (JO:ARIJ) and BHP Group (JO:BHPJ) gained 4.2%, 3.7% and 2.0%, respectively.
- Retailers, Cie Financiere Richemont SA (JO:CFRJ), Lewis Group (JO:LEWJ) and Cashbuild (JO:CSBJ) rose 3.1%, 1.4% and 1.2%, respectively.
- Financial services companies, Absa (JO:ABGJ) Group, Capitec Bank Holdings (JO:CPIJ) and Nedbank Group (JO:NEDJ) advanced 1.8%, 1.2% and 1.1%, respectively.
- On the flipside, real estate property sector stocks, Arrowhead Properties (JO:AHAJ), Dipula Income Fund (JO:DIBJ) and Attacq (JO:ATTJ) plummeted 8.4%, 5.0% and 3.3%, respectively.
- Telecommunications companies, Telkom (JO:TKGJ) SA SOC, Blue Label Telecoms (JO:BLUJ) and MTN Group (JO:MTNJ) declined 3.0%, 2.1% and 1.3%, respectively.
- The JSE All Share index advanced 1.8% to close at 75,052.06.
- The UK market finished firmer yesterday, after investors shrugged off concerns over the Omicron Covid-19 variant, following signs that it is unlikely to disrupt global economic rebound.
- Travel and leisure companies, International Consolidated Airlines Group (LON:ICAG) SA, InterContinental Hotels Group (LON:IHG) and Whitbread (LON:WTB) soared 11.3%, 5.2% and 4.6%, respectively.
- Oil and gas companies, BP (LON:BP) and Royal Dutch Shell (LON:RDSa) surged 6.2% and 4.9%, respectively.
- Bankers, Barclays (LON:BARC) and HSBC Holdings (LON:HSBA) jumped 5.2% and 5.1%, respectively.
- Miners, Anglo American, Antofagasta (LON:ANTO) and BHP Group (LON:BHPB) gained 2.7%, 2.3% and 1.0%, respectively.
- On the contrary, retail companies, Just Eat Takeaway.com N.V. (LON:JETJ) and Next (LON:NXT) plunged 5.9% and 1.1%, respectively.
- The FTSE 100 index advanced 1.6% to close at 7,505.15.
US MARKET REVIEW
- US markets ended mostly lower yesterday, as investors focus on signs of an interest rate increase by the US Federal Reserve.
- Technology companies, salesforce.com (NYSE:CRM), Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL) shed 2.8%, 1.7% and 1.3%, respectively.
- Meanwhile, Ford Motor (NYSE:F) soared 11.7%, after the company announced its plans to double its production of all-electric F-150 Lightning pickups at its Dearborn facility to 150,000 trucks a year to meet the soaring customer demand.
- General Motors (NYSE:GM) jumped 7.5%, after the company stated that semiconductor supply issues receded in 4Q21, thus reporting upbeat retail sales in the period.
- The S&P 500 index fell 0.1% to settle at 4,793.54, while the DJIA index advanced 0.6% to close at 36,799.65.
- The NASDAQ index eased 1.3% to end the trading session at 15,622.72.
ASIA MARKET REVIEW
- Asian markets are trading mostly lower this morning, tracking overnight losses on Wall Street.
- In Japan, transport company, Kawasaki Kisen Kaisha (T:9107) has gained 4.0%.
- On the other hand, Z Holdings has shed 3.7%. In Hong Kong, delivery company, Meituan (HK:3690) has plunged 9.1%.
- On the flipside, banking sector stock, CITIC has added 2.4%. In South Korea, technology company, Samsung Electronics (KS:005930) has shed 2.2%.
- On the brighter side, electronics company, Sunny Electronics has soared 26.9%.
- The Nikkei 225 index is trading 0.1% higher at 29,326.95.
- The Hang Seng index has declined 0.9% to trade at 23,090.44, while the Kospi index is trading 1.4% lower at 2,947.39.
COMMODITIES
- At 06:00 SAST today, Brent spot prices fell 0.5% to trade at $79.43/bl, reversing the previous session’s gains.
- Yesterday, Brent spot prices rose 1.8% to settle at $79.83/bl, after OPEC+ agreed to continue with its planned increase in oil output for February as it expects the Omicron coronavirus variant to have a short-term impact on global oil demand. It is also relaxing the production cuts of 10.00mn bpd, imposed in 2020, amid recovery in oil demand and prices from the pandemic induced slump. Moreover, the American Petroleum Institute (API) reported that crude oil inventories declined by 6.40mn bls for the week ended 31 December.
- Yesterday, the Illinois North Central No.2 Yellow corn spot prices rose 3.5% to $5.95/bushel.
- At 06:00 SAST today, gold prices marginally advanced to trade at $1,815.42/oz. Yesterday, gold gained 0.7% to close at $1,814.60/oz, as a weaker greenback gave a boost to the safe haven yellow metal.
- Yesterday, copper rose 0.5% to close at $9,788.50/mt. Aluminium closed 0.8% higher at $2,829.75/mt.
CURRENCIES
- Yesterday, the South African rand weakened against the US dollar. In the US, manufacturing activity expanded at a slower pace in December, following a drop in the demand for goods, buoyed by persistent global supply chain bottlenecks. Moreover, prices paid for inputs by factories fell by the most in a decade in the same month. Also, the number of people voluntarily quitting jobs surged in November, indicating confidence in the domestic labour market and an indication that higher wages could prevail for a while.
- The yield on benchmark government bonds rose yesterday. The yield on 2026 bond rose to 7.95%. Further, the yield on 2023 bond advanced to 5.14%, while that for the longer-dated 2030 issue rose to 9.42%.
- At 06:00 SAST, the US dollar is trading 0.3% higher against the South African rand at R16.0377, while the euro is trading 0.4% higher at R18.1158. At 06:00 SAST, the British pound has gained 0.2% against the South African rand to trade at R21.7019.
- Yesterday, the euro declined against most of the major currencies. In Germany, retail sales rose in November, to a record annual high despite renewed COVID-19 restrictions that has earlier held back recovery in the economy.
- At 06:00 SAST, the euro advanced 0.1% against the US dollar to trade at $1.1296, while it has gained 0.1% against the British pound to trade at GBP0.8347.
ECONOMIC UPDATES
- The final manufacturing PMI dropped to 57.90 in December, compared with a reading of 58.10 in the previous month in the UK. The preliminary figures had indicated a fall to 57.60. Market anticipations were for the manufacturing PMI to drop to 57.60.
- The consumer price index (CPI) fell 0.1% in Switzerland on a MoM basis in December, in line with market expectations of a fall of 0.1%. The CPI had registered an unchanged reading 0.0% in the previous month.
- The preliminary CPI (ex-tobacco) in France rose 0.2% on a monthly basis, in December. In the previous month, the CPI (ex-tobacco) had risen 0.4%.
- In November, on an annual basis, retail sales dropped 2.9% in Germany, less than market expectations for a drop of 4.9%. In the previous month, retail sales had recorded a drop of 2.9%.
- The number of people unemployed in Germany recorded a drop of 23.00K in December, more than market expectations for a fall of 15.00K. In the previous month, the number of people unemployed had dropped 34.00K.
- In December, the ISM manufacturing activity index in the US dropped to 58.70, more than market expectations for a drop to a level of 60.10. The ISM manufacturing activity index had recorded a level of 61.10 in the prior month.
- ISM new orders registered a drop to 60.40 in December, in the US, compared with a level of 61.50 in the previous month.
- In the US, the ISM prices paid index fell to a level of 68.20 in December, more than market expectations for a fall to 79.50. In the prior month, the ISM prices paid index had registered a reading of 82.40.
- In November, JOLTs job openings in the US fell to a level of 10,562.00K. JOLTs job openings had registered a revised reading of 11,091.00K in the prior month.
- The industrial product price index registered a rise of 0.8% in Canada on a MoM basis in November, at par with market expectations of an advance of 0.8%. The industrial product price index had advanced 1.3% in the previous month.
CORPORATE UPDATES
SOUTH AFRICA
- Oil rises as investors expect Opec+ to stay the course: Oil prices rose as investors expected Opec+ producers meeting on output to stick with their planned increase for February based on indications the Omicron variant of Covid-19 would have only a mild effect on demand.