Market Review, Commodities, Currencies & Corporate Update - 15/03/21

  • Market Overview

South Africa Market Review

  • South African markets closed in the red on Friday, pulled down by losses in gold and platinum mining sector stocks and amid inflation concerns.
  • Harmony Gold Mining and Gold Fields (JO: GFIJ ) dropped 4.4% and 3.5%, respectively.
  • Platinum miners, Anglo American (JO: AMSJ ) Platinum, Royal Bafokeng Platinum and Northam (JO: NHMJ ) Platinum declined 2.7%, 2.5% and 1.7%, respectively.
  • Market heavyweight, Naspers (JO: NPNJn ) lost 5.0%. Standard Bank (JO: SBKJ ) Group shed 1.9%, after the company reported a significant decrease in its FY20 headline earnings.
  • However, it re-instated the payment of dividends.
  • The JSE All Share index declined 0.8% to close at 68,209.86.

UK Market Review

  • The UK market finished firmer on Friday, buoyed by gains in banking sector stocks.
  • Banking firms, Barclays (LON: BARC ), NatWest Group (LON: NWG ) and Lloyds Banking Group (LON: LLOY ) rose 3.6%, 2.0% and 1.8%, respectively.
  • Burberry Group (LON: BRBY ) surged 6.9%, after the firm lifted its FY21 guidance and reported a strong rebound in trading since December.
  • On the flipside, Berkeley Group (LON: BKGH ) Holdings dropped 5.8%.
  • The company stated that it expects the value of reservations for the current financial year to be lower than last year.
  • Peers, Persimmon (LON: PSN ) and Barratt Developments (LON: BDEV ) declined 1.4% and 1.3%, respectively.
  • The FTSE 100 index advanced 0.4% to close at 6,761.47.

US Market Review

  • US markets ended mostly higher on Friday, after the US President, Joe Biden, signed a $1.90tn COVID-19 relief package into law and hopes of economic recovery boosted investor sentiment.
  • Boeing (NYSE: BA ) surged 6.8%, after reports indicated that the company had received an order from a private investment firm 777 Partners to buy 24, 737 MAX airplanes with an option to purchase a further 60.
  • Charles Schwab (NYSE: SCHW ) rose 1.9%, after the company posted an increase in its brokerage accounts in February.
  • The S&P 500 index rose 0.1% to settle at 3,943.34, while the DJIA index advanced 0.9% to close at 32,778.64.
  • The NASDAQ index eased 0.6% to end the trading session at 13,319.86.

ASIA Market Review

  • Asian markets are trading mostly higher this morning, as hopes of global economic recovery from the massive US stimulus package outweighed worries about higher US bond yields.
  • In Japan, Rakuten Inc (T: 4755 ) has surged 18.1%, after the company stated that it will issue new shares to raise $2.20bn in capital to compete with its US rivals.
  • In Hong Kong, oil company, CNOOC Ltd (HK: 0883 ) has gained 1.7%.
  • In South Korea, Samsung Electronics (KS: 005930 ) has dropped 0.7%.
  • The Nikkei 225 index is trading marginally higher at 29,732.65.
  • The Hang Seng index is trading 0.5% firmer at 28,897.41, while the kospi index is trading 0.3% lower at 3,044.38.

Commodities

  • At 06:00 SAST today, Brent spot prices rose 0.8% to trade at $69.43/bl, amid optimism about global economic and fuel demand recovery.
  • On Friday, Brent spot prices fell 0.7% to settle at $68.87/bl. However, Saudi Arabia has cut the supply of April-loading crude to at least four north Asian buyers by up to 15.0%. Reports suggested that in the US, oil refiners’ weekly capacity were increased by 1.60mn bls per day. Baker Hughes reported that the number of active US oil drilling rigs fell by 1 to 402 for the week ended 12 March.
  • On Friday, the Illinois North Central No.2 Yellow corn spot prices ended steady at $5.25/bushel.
  • At 06:00 SAST today, gold prices marginally advanced to trade at $1,727.71/oz. On Friday, gold gained 0.3% to close at $1,727.11/oz. However, gains were capped due to rebound in US Treasury yields.
  • On Friday, copper rose 0.4% to close at $9,103.50/mt. Aluminium closed 0.3% lower at $2,146.75/mt.

Currencies

  • On Friday, the South African rand weakened against the US dollar, as the rise in US yields weighed on investor morale. In the US, producer price index (PPI) increased strongly on an annual basis in February, but considerable slack in the labour market could make it harder for businesses to pass on the higher costs to consumers. Michigan consumer sentiment improved in early March to its strongest in a year as COVID-19 cases declined and the pace of vaccinations accelerated.
  • The yield on benchmark government bonds mostly rose on Friday. The yield on 2026 bond rose to 7.49%. Further, the yield on 2023 bond declined to 5.38% while that for the longer-dated 2030 issue rose to 9.33%.
  • At 06:00 SAST, the US dollar is trading marginally higher against the South African rand at R14.9567, while the euro is trading 0.1% higher at R17.8779. At 06:00 SAST, the British pound has gained 0.1% against the South African rand to trade at R20.8263.
  • On Friday, the euro advanced against most of the major currencies, after the seasonally adjusted industrial output was much stronger than expected in January and was revised sharply upwards in December too. In the UK, the economy shrank by less than feared in January when the country went back into a coronavirus lockdown. Further, the Bank of England showed that the British public’s expectations for inflation over the next 12 months held at their lowest level in more than four years, in sharp contrast to a recent rise in market expectations.
  • At 06:00 SAST, the euro marginally slipped against the US dollar to trade at $1.1953, while it has weakened 0.1% against the British Pound to trade at GBP0.8584.

Economic Updates

  • In January, on a monthly basis, gross domestic product (GDP) in the UK fell 2.9%, less than market expectations for a fall of 4.9%. In the prior month, GDP had climbed 1.2%.
  • In the UK, manufacturing production eased 2.3% on a MoM basis in January, compared with an advance of 0.3% in the previous month. Markets were anticipating manufacturing production to fall 0.8%.
  • On a monthly basis, in the UK, industrial production dropped 1.5% in January, higher than market expectations of a drop of 0.6%. Industrial production had registered a rise of 0.2% in the prior month.
  • In the UK, the Rightmove house price index recorded a rise of 0.8% on a monthly basis, in March. In the prior month, the Rightmove house price index had registered a rise of 0.5%.
  • The final consumer price index ( CPI ) in Spain fell 0.6% on a monthly basis in February, in line with market expectations of a fall of 0.6%. The preliminary figures had also indicated a fall of 0.6%. In the previous month, the CPI had recorded a flat reading 0.0%.
  • The final CPI in Germany recorded a rise of 0.7% in February on a MoM basis, compared with a rise of 0.8% in the prior month. Markets were anticipating the CPI to rise 0.7%. The preliminary figures had also indicated a rise of 0.7%.
  • On a MoM basis, PPI in the US recorded a rise of 0.5% in February, compared with a rise of 1.3% in the prior month. Market anticipations were for PPI to advance 0.5%.
  • The preliminary Reuters/ Michigan consumer sentiment index in the US climbed to 83.00 in March, more than market expectations for a rise to 78.50. In the previous month, the Reuters/Michigan consumer sentiment index had registered a level of 76.80.
  • In February, the unemployment rate registered a drop to 8.2% in Canada, compared with a level of 9.4% in the previous month. Markets were expecting the unemployment rate to fall to a level of 9.2%.
  • In January, on a monthly basis, wholesale sales in Canada registered a rise of 4.0%, less than market expectations for an advance of 5.0%. In the prior month, wholesale sales had registered a revised drop of 1.1%.
  • In February, on a YoY basis, retail sales in China climbed 33.8%, more than market expectations for an advance of 32.0%. Retail sales had advanced 4.6% in the prior month. In February, on a YoY basis, industrial production in China recorded a rise of 35.1%, higher than market expectations of an advance of 30.0%. In the prior month, industrial production had advanced 7.3%.

Corporate Updates

South Africa

  • Hammerson (JO: HMNJ ) full-year 2020 profit took a knock: Hammerson, the UK-focused mall owner that was dealt a heavy blow by Brexit then Covid-19, said that its net rental income fell by just more than a third in the year to end-December 2020, but it still managed to declare a final dividend.

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