SOUTH AFRICA MARKET REVIEW
- South African markets closed in the red yesterday, pulled down by losses in retail and mining sector stocks.
- Retailers, Woolworths (ASX:WOW) Holdings (JO:WHLJ), Massmart Holdings (JO:MSMJ) and Mr Price Group dropped 2.0%, 1.8% and 1.4%, respectively.
- Gold miners, Gold Fields (JO:GFIJ) and Harmony Gold Mining shed 2.4% and 0.6%, respectively.
- Further, platinum miners, Anglo American (JO:AMSJ) Platinum, Northam Platinum (JO:NHMJ) and Impala Platinum Holdings (JO:IMPJ) declined 2.2%, 1.2% and 0.7%, respectively.
- Market heavyweight, Naspers (JO:NPNJn) fell 2.0%. On the other hand, banking firms, Nedbank Group (JO:NEDJ) and Capitec Bank Holdings (JO:CPIJ) gained 0.7% and 0.3%, respectively.
- The JSE All Share index declined 0.9% to close at 68,094.28.
- The UK market finished weaker yesterday, pulled down by a stronger pound.
- Melrose Industries dropped 4.6%, after the company agreed to sell its Nortek Air Management business for about GBP2.62bn and plans to use the proceeds to pay down debt, reduce a UK pension deficit and return cash to shareholders.
- On the flipside, Johnson Matthey (LON:JMAT) rose 0.4%, after the firm signed a long-term agreement with Russian metals producer Nornickel for the supply of nickel and cobalt to produce materials used to make electric vehicle (EV) batteries.
- The FTSE 100 index declined 0.3% to close at 7,000.08.
US MARKET REVIEW
- US markets ended lower yesterday, as investors awaited guidance from quarterly earnings.
- Herman Miller (NASDAQ:MLHR) plunged 8.7%, after the company and Knoll announced an agreement to combine in a cash-and-stock deal valued at $1.80bn.
- Tesla (NASDAQ:TSLA) fell 3.4%, after Tesla vehicle believed to be operating without anyone in the driver’s seat crashed into a tree weekend north of Houston, killing two occupants.
- On the contrary, Coca-Cola (NYSE:KO) rose 0.6%, after the company reported better than expected 1Q21 earnings and revenues.
- The S&P 500 index fell 0.5% to settle at 4,163.26, while the DJIA index declined 0.4% to close at 34,077.63.
- The NASDAQ index eased 1.0% to end the trading session at 13,914.77.
ASIA MARKET REVIEW
- Asian markets are trading mostly lower this morning after China kept its one-year loan prime benchmark lending rate unchanged.
- In Japan, Panasonic (T:6752) has fallen 2.3%. Sumitomo Mitsui Financial Group (T:8316) and Mitsubishi UFJ Financial Group (T:8306) have dropped 1.0% and 0.7%, respectively.
- In Hong Kong, AAC Technologies Holdings (HK:2018) has declined 1.3%.
- In South Korea, Samsung Electronics (KS:005930) has gained 0.5%.
- LG Electronics (KS:066570) has shed 0.9%. The Nikkei 225 index is trading 1.8% lower at 29,139.85.
- The Hang Seng index is trading marginally weaker at 29,095.27, while the Kospi index is trading 0.5% higher at 3,213.90.
COMMODITIES
- At 06:00 SAST today, Brent spot prices rose 0.4% to trade at $67.24/bl, extending previous session gains.
- Yesterday, Brent spot prices rose 0.6% to settle at $66.94/bl, supported by a weaker US dollar. However, increasing COVID-19 cases in India, the world's third biggest oil importer and consumer, dampened optimism for a sustained global recovery in demand. Meanwhile, Joint Organisations Data Initiative (JODI) stated that Saudi Arabia's crude oil exports fell in February to their lowest in eight months, oil exporter voluntarily capped output to support oil prices.
- Yesterday, the Illinois North Central No.2 Yellow corn spot prices rose 0.3% to $5.83/bushel.
- At 06:00 SAST today, gold prices declined 0.1% to trade at $1,768.81/oz. Yesterday, gold declined 0.3% to close at $1,771.43/oz, amid a rebound in US Treasury yields.
- Yesterday, copper rose 1.7% to close at $9,384.25/mt. Aluminium closed 0.9% higher at $2,321.65/mt.
CURRENCIES
- Yesterday, the South African rand strengthened flat against the US dollar. South Africa recorded large current account and trade surpluses in the last two quarters of FY20 on higher demand for commodities as global trade conditions eased with the falling COVID-19 infections and a subsequent loosening of restrictions on economic activity.
- The yield on benchmark government bonds rose yesterday. The yield on 2026 bond rose to 7.18%. Further, the yield on 2023 bond advanced to 4.91% while that for the longer-dated 2030 issue rose to 9.06%.
- At 06:00 SAST, the US dollar is trading 0.1% lower against the South African rand at R14.2128, while the euro is trading 0.1% higher at R17.1304. At 06:00 SAST, the British pound has marginally gained against the South African rand to trade at R19.8946.
- Yesterday, the euro declined against most of the major currencies, after the German Bundesbank monthly report showed that economic output decreased in 1Q21, as stricter and longer-lasting restrictions increased the losses in many service sectors.
- At 06:00 SAST, the euro advanced 0.1% against the US dollar to trade at $1.2054, while it has gained 0.1% against the British pound to trade at GBP0.8611.
ECONOMIC UPDATES
- On a MoM basis, the Rightmove house price index advanced 2.1% in April, in the UK. In the prior month, the Rightmove house price index had advanced 0.8%.
- The seasonally adjusted construction output in the eurozone recorded a drop of 2.1% in February on a monthly basis. In the previous month, construction output had advanced 0.8%.
- Merchandise (total) trade surplus in Japan rose to JPY663.70bn in March. Japan had registered a merchandise (total) trade surplus of JPY217.40bn in the prior month.
- The tertiary industry index registered a rise of 0.3% in Japan on a monthly basis, in February. The tertiary industry index had recorded a revised drop of 1.0% in the previous month.
- China kept the one-year loan prime rate (LPR) unchanged at 3.85% and five-year LPR at 4.65%.
CORPORATE UPDATES
SOUTH AFRICA
- Truworths International Ltd (JO:TRUJ): The company announced in compliance with paragraph 3.59 of the Listings Requirements of the JSE, the appointment of Mr Emanuel (Mannie) Cristaudo as the Chief Financial Officer of the Truworths International Group and an Executive Director of the company with effect from 1 July 2021.
- Cashbuild Limited (JO:CSBJ): The retail company, in its 3Q21 operational update, stated that revenue was up 21.0% compared with the same period of last year. The 299 existing stores’ revenue increased by 19.0% and the 18 new stores (opened since July 2019) contributed 2.0%. This together with the growth reported in the first half, equates to an increase in revenue for the year to date of 21.0%.
- Thandi Modise apologises to SA for parliament’s inaction: National Assembly speaker Thandi Modise has apologised to the country and taken responsibility for parliament’s lack of immediate action when state capture allegations emerged in 2011.