Market Review, Commodities, Currencies & Corporate Update - 01.06.21

Published 2021/06/01, 09:08
Updated 2021/07/16, 11:15
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SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the green yesterday, boosted by gains in mining sector stocks and following the release of robust trade surplus data.
  • Platinum miners, Impala Platinum (JO:IMPJ) Holdings, Northam (JO:NHMJ) Platinum and Anglo American (JO:AMSJ) Platinum gained 5.3%, 5.2% and 4.7%, respectively.
  • Gold mining firms, Harmony Gold Mining and Gold Fields (JO:GFIJ) rose 4.4% and 4.0%, respectively.
  • Further, banking firms, Standard Bank Group (JO:SBKJ), Nedbank Group (JO:NEDJ) and Capitec Bank (JO:CPIJ) Holdings climbed 1.9%, 1.7% and 0.7%, respectively.
  • On the other hand, tobacco company, British American Tobacco (JO:SNHJ) dropped 0.7%.
  • The JSE All Share index advanced 0.6% to close at 67,964.04.

ASIA MARKET REVIEW

  • Asian markets are trading mostly higher this morning, on hopes of a regional economic recovery on delayed-but-steady rollouts of the COVID-19 vaccines.
  • China’s manufacturing PMI rose more than expected in May.
  • In Japan, Renesas Electronics has risen 2.5%, after the company stated that it expects a domestic chip plant that had been damaged in a fire in March to return to full production capacity around mid-June.
  • Toyota Motor (T:7203) has added 1.8%.
  • In Hong Kong, Tencent Holdings (HK:0700) has climbed 1.0%.
  • In South Korea, technology company, Samsung Electronics (KS:005930) has added 0.1%.
  • The Nikkei 225 index is trading 0.3% lower at 28,763.42.
  • The Hang Seng index is trading 0.5% firmer to trade at 29,288.81, while the Kospi index is trading 0.4% higher at 3,215.91.

COMMODITIES

  • At 06:00 SAST today, Brent spot prices rose 1.0% to trade at $69.41/bl, extending the previous session’s gains.
  • Yesterday, Brent spot prices rose 0.4% to settle at $68.73/bl, as optimism grew over the fuel demand outlook during the summer driving season of the US. Meanwhile, reports indicated that a Joint Technical Committee (JTC) for the alliance kept its global oil demand growth forecast for 2021 unchanged at about 6.00mn barrels per day (bpd). Further, sources indicated that OPEC+ is likely to stick to the existing pace of gradually easing oil supply curbs at a meeting later this week.
  • Yesterday, the Illinois North Central No.2 Yellow corn spot prices ended steady at $6.62/bushel.
  • At 06:00 SAST today, gold prices advanced 0.2% to trade at $1,911.13/oz. Yesterday, gold gained 0.2% to close at $1,906.87/oz, boosted by a weaker US dollar and lower US Treasury yields, while growing inflationary pressures also lifted demand for the safe haven metal.
  • Yesterday, copper ended steady at $10,248.25/mt. Aluminium closed flat at $2,458.51/mt.

CURRENCIES

  • Yesterday, the South African rand strengthened against the US dollar, after South Africa recorded its twelfth consecutive trade surplus in April, with precious metal exports providing the biggest boost.
  • The yield on benchmark government bonds mostly fell yesterday. The yield on 2026 bond fell to 7.31%. Further, the yield on 2023 bond advanced to 4.97%, while that for the longer-dated 2030 issue fell to 8.91%.
  • At 06:00 SAST, the US dollar is trading 0.2% lower against the South African rand at R13.7131, while the euro is trading 0.2% lower at R16.7686. At 06:00 SAST, the British pound has marginally declined against the South African rand to trade at R19.5232.
  • Yesterday, the euro advanced against most of the major currencies, after Germany’s annual consumer price index (CPI) accelerated in May, advancing above the European Central Bank’s target of close to but below 2.0%.
  • At 06:00 SAST, the euro marginally advanced against the US dollar to trade at $1.2228, while it has weakened 0.2% against the British pound to trade at GBP0.8590.

ECONOMIC UPDATES

  • M3 (JO:CGRJ) money supply in South Africa advanced 2.0% in April on an annual basis. In the prior month, M3 money supply had climbed 3.6%.
  • On a YoY basis, in South Africa, the private sector credit recorded a drop of 1.8% in April, more than market expectations for a fall of 0.9%. In the prior month, the private sector credit had fallen 1.5%.
  • In April, trade surplus in South Africa narrowed to R51.24bn. South Africa had reported a trade surplus of R52.57bn in the previous month.
  • The flash CPI climbed 0.4% on a MoM basis, in May, in Spain. The CPI had advanced 1.2% in the prior month.
  • The preliminary CPI remained steady 0.0% in Italy on a MoM basis, in May. In the prior month, the CPI had advanced 0.4%.
  • The flash CPI in Germany advanced 0.5% on a MoM basis in May, more than market expectations for an advance of 0.3%. The CPI had registered a rise of 0.7% in the previous month.
  • In Canada, the industrial product price index advanced 1.6% in April on a MoM basis. The industrial product price index had climbed 1.6% in the previous month.
  • The consumer confidence index recorded a drop to 34.10 in Japan, in May. In the prior month, the consumer confidence index had registered a reading of 34.70.
  • Housing starts in Japan registered a rise of 7.1% in April on an annual basis, higher than market expectations of an advance of 3.5%. Housing starts had recorded a rise of 1.5% in the previous month.
  • In May, the final manufacturing PMI in Japan recorded a drop to 53.00. Manufacturing PMI had registered a reading of 53.60 in the prior month. The preliminary figures had recorded a drop to 52.50.
  • Caixin/Markit manufacturing PMI index recorded an unexpected rise to 52.00 in China, in May, compared with a level of 51.90 in the previous month.

CORPORATE UPDATES

SOUTH AFRICA

  • Standard Bank Group Ltd (JO:SBKJ): The banking company, in its 4M21 trading update, stated that net interest income (NII) declined mid-single digits but was flat in constant currency. Significantly lower margins (driven by lower average interest rates period on period) were partially offset by higher average interest-earning assets. It expects its 1H21 HEPS to be 40.0% more than the prior year and EPS to be 2.8 times higher compared with the same period last year.
  • Famous Brands Ltd (JO:FBRJ): The quick-service and casual dining restaurant franchisor, in its FY21 results, stated that its revenue decreased to R4.68bn from R6.50bn posted in the previous year. Its diluted loss per share stood at 127.00c compared with an EPS of 467.00c in the prior year.
  • Allied Electronics Corporation Limited (JO:AELJ) The IT service management company announced that Mr. Cedric Miller, Altron’s Chief Financial Officer (CFO) and Executive Director of the Altron Board has tendered his resignation on 31 May 2021. Mr. Nicholas Bofilatos will assume the role of the Group’s Acting CFO effective from 1 July 2021.
  • Adcorp Holdings (JO:ADRJ) Limited: The employment services providing company, in its FY21 results, revealed that its revenue declined 9.3% from the preceding year to R11.72bn. Its diluted EPS stood at 34.60c, compared with a loss per share of 561.60c recorded in the previous year.
  • ArcelorMittal SA (AS:MT) back on track to supply industry: After a raft of challenges in restarting operations, all ArcelorMittal SA’s (Amsa’s) operations are back up and running, allowing SA’s primary steelmaker to meet national demand for steel for the first time in months.

FINANCIAL TIMES

  • Nestlé document says majority of its food portfolio is unhealthy: The world’s largest food company, Nestlé, has acknowledged that more than 60.0%of its mainstream food and drinks products do not meet a “recognised definition of health” and that “some of our categories and products will never be ‘healthy’ no matter how much we renovate”.
  • Scientists warn against June lifting of all Covid restrictions in England: Two scientists advising the government have warned against lifting all remaining coronavirus restrictions in England on June 21, as fears grow over the continued spread of the B.1.617.2 variant first identified in India.
  • Hong Kong exempts finance executives from virus quarantine rules: Hong Kong has exempted Senior Financial Executives and Directors of some listed companies from its harsh border quarantine rules, prompting calls by business groups to widen the measures to other sectors.
  • EY Europe revamp has partners worried over Wirecard damage: Accountancy group EY is to centralise power in a new European executive team, pooling resources across the region but raising concern that any financial hit from the Wirecard scandal might also be shared.

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