SOUTH AFRICA MARKET REVIEW
- South African markets closed in the red yesterday, pulled down by losses in platinum mining sector stocks.
- Northam Platinum (JO:NHMJ), Impala Platinum Holdings (JO:IMPJ) and Anglo American Platinum (JO:AMSJ) dropped 3.4%, 3.1% and 1.8%, respectively.
- Banking firms, Capitec Bank Holdings (JO:CPIJ) and Nedbank Group (JO:NEDJ) declined 0.9% and 0.1%, respectively.
- On the other hand, Allied Electronics gained 5.7%, after the company confirmed a special dividend of 96.00c per share, which comes as a result of the demerger of Bytes Technology.
- Gold miner, Harmony Gold Mining rose 1.1%.
- The JSE All Share index declined 0.3% to close at 66,971.59.
- The UK market finished firmer yesterday, amid a weaker pound and after the ECB policymakers announced that they were standing pat on their monetary policy, reiterating their intention to up the ante on bond purchases, while apparently leaving all their options open.
- Taylor Wimpey (LON:TW) rose 0.8%, after the company maintained its FY21 guidance and reported an increased order book despite the latest Covid lockdown, as strong demand and government support schemes drove sales.
- Anglo American Platinum Ltd (JO:AMSJ) added 0.8%, after it reported a higher 1Q21 copper production, despite capacity constraints caused by Covid-19 restrictions.
- On the flipside, Rentokil Initial fell 0.9%, even after the company reported an increase in its 1Q21 revenue.
- The FTSE 100 index advanced 0.6% to close at 6,938.24.
US MARKET REVIEW
- US markets ended lower yesterday, following reports that indicated that US President, Joe Biden is weighing a proposal which would nearly double the capital-gains tax for wealthy individuals.
- American Airlines (NASDAQ:AAL) Group fell 4.5%, after the company reported a wider-than-expected 1Q21 loss and revenue.
- On the contrary, AT&T (NYSE:T) rose 4.2%, after the company reported better than expected 1Q21 revenues, as the US economy reopening following Covid-19 pandemic-linked restrictions boosted smartphone sales and the media business.
- The S&P 500 index fell 0.9% to settle at 4,134.98, while the DJIA index declined 0.9% to close at 33,815.90.
- The NASDAQ index eased 0.9% to end the trading session at 13,818.41.
ASIA MARKET REVIEW
- Asian markets are trading mostly higher this morning.
- Meanwhile, reports indicated that the US President, Joe Biden is seeking an increase in the tax on capital gains for earnings of more than $1.00mn.
- In Japan, automakers, Honda Motor and Mazda Motor (T:7261) have fallen 1.3% and 0.6%, respectively.
- In Hong Kong, Sunny Optical Technology Group (HK:2382) has gained 3.3%.
- In South Korea, technology company, Samsung Electronics (KS:005930) has dropped 0.5%.
- The Nikkei 225 index is trading 0.8% lower at 28,965.71.
- The Hang Seng index is trading 0.9% higher at 29,003.75, while the Kospi index is trading marginally higher at 3,178.22.
COMMODITIES
- At 06:00 SAST today, Brent spot prices marginally fell to trade at $65.06/bl, reversing the previous session’s gains.
- Yesterday, Brent spot prices rose 0.9% to settle at $65.09/bl. Meanwhile, Libya announced that its oil production fell to about 1.00mn barrels per day in recent days and could drop further due to budgetary issues. Meanwhile, any increase in supply from Iran would be on top of extra barrels already expected from the Organization of the Petroleum Exporting Countries and allies, including Russia, a group known as OPEC+, which plans to bring back about 2.00mn bpd of production over the next three months.
- Yesterday, the Illinois North Central No.2 Yellow corn spot prices rose 4.0% to $6.44/bushel.
- At 06:00 SAST today, gold prices advanced 0.2% to trade at $1,787.03/oz. Yesterday, gold declined 0.5% to close at $1,783.94/oz, as the US dollar gained some ground.
- Yesterday, Copper declined 0.4% to close at $9,421.35/mt. Aluminium closed 0.1% lower at $2,363.75/mt.
CURRENCIES
- Yesterday, the South African rand weakened against the US dollar. In the US, the number of people filing new claims for unemployment benefits fell to a 13-month low for the week ended 16 April, suggesting layoffs were subsiding and thus strengthening expectations for another month of blockbuster job growth in April as a re-opening US economy unleashes pent-up demand. On the contrary, existing home sales fell to a seven-month low in March, pulled down by an acute shortage of properties, which is boosting prices and making owning a house more expensive for some first-time buyers.
- The yield on benchmark government bonds mostly rose yesterday. The yield on 2026 bond rose to 7.25%. Further, the yield on 2023 bond declined to 4.71%, while that for the longer-dated 2030 issue rose to 9.12%.
- At 06:00 SAST, the US dollar is trading marginally lower against the South African rand at R14.3069, while the euro is trading marginally higher at R17.1999. At 06:00 SAST, the British pound has gained 0.2% against the South African rand to trade at R19.8329.
- Yesterday, the euro advanced against most of the major currencies. The European Central Bank (ECB) decided to keep its policy unchanged, while market players look for clues on when the central bank’s massive monetary stimulus might start to be wound down.
- At 06:00 SAST, the euro advanced 0.1% against the US dollar to trade at $1.2022, while it has weakened 0.1% against the British pound to trade at GBP0.8673.
ECONOMIC UPDATES
- In April, CBI trends selling prices registered a rise to 27.00 in the UK. CBI trends selling prices had registered a reading of 20.00 in the prior month.
- In February, on a MoM basis, the seasonally adjusted industrial sales rose 0.2% in Italy. In the prior month, industrial sales had risen by a revised 2.6%.
- In April, the industrial business climate index registered a drop to 95.00 in France, compared to a reading of 97.00 in the previous month.
- The ECB kept its interest rate steady at 0.0%. Market expectations were for the central bank to maintain its interest rate at 0.0%.
- The preliminary consumer confidence index in the eurozone recorded an unexpected rise to a level of -8.10 in April, compared to market expectations of an unchanged reading of -10.80. In the previous month, the consumer confidence index had registered a level of -10.80.
- Existing home sales in the US recorded a drop of 3.7% in March on a MoM basis, compared to market expectations of an advance of 0.8%. Existing home sales had fallen by a revised 6.3% in the previous month.
- On a MoM basis, in the US, leading indicator climbed 1.3% in March, more than market expectations for a rise of 1.0%. Leading indicator had dropped by a revised 0.1% in the previous month.
- In April, the Kansas City Fed manufacturing activity index in the US rose to a level of 31.00. The Kansas City Fed manufacturing activity index had registered a level of 26.00 in the prior month.
- The Chicago Fed national activity index in US recorded a rise to 1.71 in March. In the prior month, the Chicago Fed national activity index had registered a revised reading of -1.20.
- Number of initial jobless claims registered an unexpected drop to a level of 547.00 K in week ended 17 April 2021, in US, compared to a revised level of 586.00 K in prior week.
- The flash manufacturing PMI in Japan climbed to 53.30 in April, compared to a level of 52.70 in the previous month.
- In April, the preliminary Nikkei Japan services PMI in Japan remained unchanged at 48.30. In the prior month, Nikkei Japan services PMI had recorded a similar reading of 48.30.
CORPORATE UPDATES
SOUTH AFRICA
- Anglo American Platinum Limited: The platinum mining company, in its 1Q21 production report, stated that total PGMs production (expressed as 5E+Au metal-in-concentrate) increased by 7.0% against prior year (1Q20) to 1,021,200 ounces, despite being impacted by the Covid-19 second wave. PGMs sales volumes (excluding sales from trading) increased by 66% to 1,131,100 ounces as sales from production were supplemented by the drawdown of minor metals from refined inventory in support of increased demand.
- Kumba Iron Ore Limited: The iron ore mining company, in its 1Q21 production and sales report, stated that total production was up 10.0% to 10.6Mt, driven by improved performance at both mines. Total sales decreased by 4.0% to 10.3Mt due to lower domestic offtake and rail constraints.
- Clicks (JO:CLSJ) Group Limited: The retail company, in its 1H21 results, revealed that its revenue advanced 7.7% from the same period of the preceding year to R19.29bn. Its diluted EPS stood at 358.90c, compared with 338.00c recorded in the corresponding period of the previous year.
- Netcare (JO:NTCJ) Limited: The healthcare company, in its 1H21 trading update, stated that Group revenue increased within a range of 23.5% to 24.5% and EBITDA grew by between 635.0% and 672.0% at an improved margin ranging from 14.5% to 15.1%. Group revenue for 1H21 declined within a range of 5.5% to 6.5% against 1H20, due to lower activity levels related to COVID-19.
- Delta Property Fund Limited (JO:DLTJ): The property investment company, in its FY20 results, stated that its revenue decreased to R1.46bn from R1.51bn posted in the previous year. Its diluted loss per share stood at 131.02c.
- Huge Group (JO:HUGJ) forced to take down videos by takeover watchdog: The Takeover Regulation Panel (TRP), which oversees mergers and acquisitions in SA, has told Huge Group to take down a set of videos on its website related to its takeover bid for fellow technology player, Adapt IT.