Market Review, Commodities, Currencies & Corporate Update - 09.03.21

  • Market Overview
  • Editor's Pick

South Africa Market Review

  • South African markets closed in the green yesterday, buoyed by gains in gold and platinum mining sector stocks.
  • Gold mining firms, Harmony Gold Mining Company and Gold Fields (JO: GFIJ ) gained 3.4% and 3.2%, respectively.
  • Platinum miners, Impala Platinum (JO: IMPJ ) Holdings, Anglo American (JO: AMSJ ) Platinum and Northam (JO: NHMJ ) Platinum rose 2.3%, 1.7% and 0.5%, respectively.
  • Massmart Holdings surged 20.8%, after the company announced that it intended to sell its stand-alone Rhino and Cambridge grocery stores as part of the turnaround strategy it embarked on in January 2020 to bring the business back to profitability.
  • On the other hand, market heavyweight, Naspers (JO: NPNJn ) dropped 2.6%.
  • The JSE All Share index advanced 0.2% to close at 68,426.17.

UK Market Review

  • The UK market finished firmer yesterday, as easing of the stringent lockdown lifted investor sentiment.
  • Banking firms, Lloyds Banking Group (LON: LLOY ), HSBC Holdings (LON: HSBA ) and Barclays (LON: BARC ) gained 4.3%, 4.1% and 3.7%, respectively.
  • On the flipside, BT Group (LON: BT ) fell 2.9%, after the company denied accusations that former Chairman, Jan du Plessis, was forced out because he was holding up the pace of strategic decisions.
  • Retailers, Wm. Morrison Supermarkets (LON: MRW ), Tesco (LON: TSCO ) and J Sainsbury (OTC: JSAIY ) declined 2.2%, 1.9% and 1.5%, respectively.
  • The FTSE 100 index advanced 1.3% to close at 6,719.13.

US Market Review

  • US markets ended mostly lower yesterday, pulled down by losses in technology sector stocks.
  • Technology stocks, Apple (NASDAQ: AAPL ), Microsoft (NASDAQ: MSFT ) and Intel (NASDAQ: INTC ) shed 4.2%, 1.8% and 1.5%, respectively.
  • On the contrary, Walt Disney (NYSE: DIS ) surged 6.3%, after the California health officials set new rules that would allow Disneyland and other theme parks stadiums and outdoor entertainment venues to reopen as early as 1 April.
  • General Electric (NYSE: GE ) rose 4.2%, after reports indicated that the company was nearing a deal to combine its aircraft-leasing business with Ireland’s AerCap Holdings NV (NYSE: AER ).
  • The S&P 500 index fell 0.5% to settle at 3,821.35, while the Dow Jones Industrial Average advanced 1.0% to close at 31,802.44.
  • The NASDAQ index eased 2.4% to end the trading session at 12,609.16.

ASIA Market Review

  • Asian markets are trading mostly higher this morning, on prospects of global recovery and the passage of a $1.90tn stimulus bill.
  • In Japan, Mitsubishi UFJ Financial Group (T: 8306 ) has risen 1.7%.
  • Toyota Motor (T: 7203 ) has gained 1.7%. In Hong Kong, Tencent Holdings (HK: 0700 ) has advanced 2.3%.
  • In South Korea, technology stocks. SK Hynix and Samsung Electronics (KS: 005930 ) have declined 1.1% and 0.6%, respectively.
  • The Nikkei 225 index is trading 0.9% higher at 29,000.93.
  • The Hang Seng index is trading 1.5% firmer to trade at 28,979.16, while the Kospi index is trading 1.0% lower at 2,966.63.

Commodities

  • At 06:00 SAST today, Brent spot prices rose 1.2% to trade at $68.66/bl, on expectations of a recovery in the global economy.
  • Yesterday, Brent spot prices fell 2.2% to settle at $67.83/bl. Meanwhile, the US Senate approved a $1.90tn stimulus bill, which is expected to boost fuel demand as the economy gets a lift.
  • Yesterday, the Illinois North Central No.2 Yellow corn spot prices rose 2.3% to $5.315/bushel.
  • At 06:00 SAST today, gold prices advanced 0.4% to trade at $1,689.76/oz. Yesterday, gold declined 1.0% to close at $1,683.54/oz, as greenback gained ground, thereby denting demand for the dollar denominated commodity.
  • Yesterday, copper rose 1.2% to close at $9,019.00/mt. Aluminium closed 0.7% lower at $2,161.75/mt.

Currencies

  • Yesterday, the South African rand weakened against the US dollar, as prospects of higher inflation and interest rates in major economies saw investors pull money from emerging markets. In the US, wholesale inventories increased in January even as sales surged, indicating strong demand that aligns with expectations for faster economic growth.
  • The yield on benchmark government bonds rose yesterday. The yield on 2026 bond rose to 7.76%. Further, the yield on 2023 bond advanced to 5.49% while that for the longer-dated 2030 issue rose to 9.53%.
  • At 06:00 SAST, the US dollar is trading 0.2% lower against the South African rand at R15.5124, while the euro is trading marginally lower at R18.4036. At 06:00 SAST, the British pound has marginally gained against the South African rand to trade at R21.4804.
  • Yesterday, the euro declined against most of the major currencies, after German industrial production fell on a monthly basis in January. Meanwhile, the investor morale index in the eurozone jumped to its highest reading in over a year in March, driven by an improved view of the current situation. In the UK, Bank of England Governor, Andrew Bailey stated that people should be positive about Britain’s economic prospects as it emerges from the COVID-19 pandemic but also realistic about the challenges from structural change.
  • At 06:00 SAST, the euro advanced 0.2% against the US dollar to trade at $1.1865, while it has marginally weakened against the British pound to trade at GBP0.8568.

Economic Updates

  • In February, on a YoY basis, retail sales across all sectors in the UK climbed 9.5%. Retail sales across all sectors had climbed 7.1% in the prior month.
  • In January, the seasonally adjusted industrial production eased 2.5% on a monthly basis in Germany, compared with market expectations of an advance of 0.2%. In the previous month, industrial production had registered a revised rise of 1.9%.
  • The investor confidence index rose to a level of 5.00 in March, in the eurozone, compared with a reading of -0.20 in the previous month.
  • On a MoM basis, the seasonally adjusted final wholesale inventories registered a rise of 1.3% in January, in the US, in line with market expectations of a rise of 1.3%. The preliminary figures had also indicated a rise of 1.3%. In the previous month, wholesale inventories had advanced by a revised 0.5%.
  • In Japan, the final nominal gross domestic product (GDP) advanced 2.3% on a quarterly basis, in 4Q 2020. In the prior quarter, nominal GDP had advanced 5.5%. The preliminary figures had recorded an advance of 2.5%.
  • The preliminary coincident index rose to a level of 91.70 in January, in Japan, compared with a revised reading of 88.20 in the previous month.

Corporate Updates

South Africa

  • Capitec Bank (JO: CPIJ ) Holdings Limited: The banking company, in its FY20 trading update, stated that the company expects its HEPS to be between R38.55 and R40.73 compared with R54.28 in the last year. It also expects its EPS to be between R37.41 and R39.57 compared with R54.00 in the prior year.
  • Old Mutual (LON: OMU ) Limited: The insurance company, in its FY20 trading update, stated that the company expects its HEPS to be between 94.40c and 141.70c compared with 236.10c in the prior year.
  • AVI Limited: The food and beverage company, in its 1H21 results, reported that its revenue declined 0.1% from the same period of the preceding year to R7.13bn. Its diluted EPS stood at 295.40c, compared with 409.10c recorded in the corresponding period of the previous year.
  • Massmart Holdings Limited : The retail company, in its FY20 results, stated that its revenue decreased to R86.76bn from R93.84bn posted in the corresponding period of the previous year. Its diluted loss per share stood at 802.30c compared with loss of 594.90c in the same period of the prior year.
  • Sun International Limited (JO: SUIJ ): The resort hotel chain, in its FY20 trading update, stated that it expects its loss per share to be between R10.00 and R11.00 compared with EPS of 518.00c and its headline loss per share to be between 170.00c and 290.00c.
  • Merafe Resources Limited (JO: MRFJ ): The resource mining company, in its FY20 results, indicated that its revenue fell to R4.78bn from R5.38bn posted in the previous year. Its diluted loss per share stood at 40.00c compared with loss of 54.20c in the prior year.
  • Sun International warns of hefty loss and write-downs due to Covid-19: Casino and gaming group Sun International has warned shareholders to expect a headline loss of as much as R765.00mn, amid a huge profit swing after Covid-19 shuttered operations and prompted it to tap shareholders.

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