Market Review, Commodities, Currencies & Corporate Update - 26.05.21

Published 2021/05/26, 09:02
Updated 2021/07/16, 11:15

SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the green yesterday, buoyed by broad-based gains in insurance and banking sector stocks.
  • Insurance companies, Old Mutual (LON:OMU), Sanlam (JO:SLMJ) and Discovery (JO:DSBPp) advanced 5.7%, 0.6% and 0.5%, respectively.
  • Banking companies, FirstRand (JO:FSRJ), Standard Bank (JO:SBKJ) Group and Nedbank Group (JO:NEDJ) rose 2.9%, 2.6% and 1.9%, respectively.
  • On the other hand, platinum mining firms, Royal Bafokeng Platinum (JO:RBPCBe) and Northam (JO:NHMJ) Platinum declined 1.4% and 0.9%, respectively.
  • Gold miners,Harmony Gold Mining (NYSE:HMY) and AngloGold Ashanti (JO:ANGJ) dropped 0.7% and 0.2%, respectively.
  • The JSE All Share index marginally advanced to close at 66,076.68.

UK MARKET REVIEW

  • The UK market finished weaker yesterday, pulled down by losses in oil and mining sector stocks and as a resurgence of COVID-19 cases across parts of Asia dampened investor sentiment.
  • Oil companies, Royal Dutch Shell (LON:RDSa) and BP (LON:BP) declined 2.6% and 2.0%, respectively.
  • Miners, Anglo American (JO:AMSJ), Glencore (LON:GLEN) and Antofagasta (LON:ANTO) dropped 2.4%, 2.1% and 2.0%, respectively.
  • On the flipside, Aveva Group rose 1.6%, after the company stated that trading had normalised in most of its markets from the impact of COVID-19, and that the outlook remained in line with expectations.
  • The FTSE 100 index declined 0.3% to close at 7,029.79.

US MARKET REVIEW

  • US markets ended lower yesterday, as the release of weaker-than-expected consumer confidence data dampened investor morale.
  • AutoZone (NYSE:AZO) fell 1.9%, even after the company reported better than expected 3Q21 earnings and revenue.
  • On the contrary, Boeing (NYSE:BA) gained 1.4%, after the aircraft leasing business, SMBC Aviation Capital agreed to buy 14 more 737 MAX jets.
  • Amazon.com (NASDAQ:AMZN) rose 0.4%, after reports indicated that the company is about to reach a deal to acquire Hollywood studio, MGM Holdings for almost $9.00bn including debt.
  • The S&P 500 index fell 0.2% to settle at 4,188.13, while the DJIA index declined 0.2% to close at 34,312.46.
  • The NASDAQ index marginally eased to end the trading session at 13,657.17.

ASIA MARKET REVIEW

  • · Asian markets are trading mostly higher this morning after the US Federal Reserve officials reaffirmed a dovish monetary policy stance which buoyed investor sentiment.
  • · In Japan, banking firms, Mitsubishi UFJ Financial Group (T:8306) and Sumitomo Mitsui Financial Group (T:8316) have dropped 1.6% and 1.1%, respectively.
  • · On the other hand, FANUC (T:6954) has gained 0.7%.
  • · In Hong Kong, oil company, CNOOC (HK:0883) has declined 1.3%.
  • · Meanwhile, market heavyweight, Tencent Holdings (HK:0700) has added 1.2%. In South Korea, technology company, Samsung Electronics (KS:005930) has added 0.1%.
  • · On the flip side, automaker, Kia Motors (KS:000270) has shed 0.1%.
  • · The Nikkei 225 index is trading 0.3% higher at 28,645.68.
  • · The Hang Seng index is trading 0.7% firmer at 29,120.48, while the Kospi index is trading 0.3% lower at 3,161.14.

COMMODITIES

  • At 06:00 SAST today, Brent spot prices marginally rose to trade at $67.98/bl, extending the previous session’s gains.
  • Yesterday, Brent spot prices rose 0.1% to settle at $67.96/bl, after the American Petroleum Institute reported that crude oil inventories declined by 439,000 bls for the week ended 21 May. Meanwhile, reports indicated that Venezuela's state-run oil company, PDVSA has restarted crude blending at its Sinovensa and Petropiar plants after a gas supply outage to the Jose oil export terminal halted operations last week.
  • Yesterday, the Illinois North Central No.2 Yellow corn spot prices fell 5.6% to $6.25/bushel.
  • At 06:00 SAST today, gold prices advanced 0.4% to trade at $1,907.03/oz. Yesterday, gold gained 1.0% to close at $1,899.25/oz, buoyed by a weaker dollar.
  • Yesterday, copper declined 0.3% to close at $9,900.50/mt. Aluminium closed 0.7% lower at $2,338.05/mt.

CURRENCIES

  • Yesterday, the South African rand strengthened against the US dollar, amid easing US inflation concerns as comments from the US Federal Reserve reaffirmed its dovish stance. In the US, new home sales dropped in April, as prices surged amid a tight supply of houses, which is threatening to slow the housing market momentum. Further, consumer confidence was little changed in May, as consumers’ short-term optimism of conditions retreated on expectations for slowing growth and softening domestic labour market conditions in the months ahead.
  • The yield on benchmark government bonds mostly fell yesterday. The yield on 2026 bond fell to 7.26%. Further, the yield on 2023 bond advanced to 4.89% while that for the longer-dated 2030 issue fell to 8.85%.
  • At 06:00 SAST, the US dollar is trading 0.2% lower against the South African rand at R13.8356, while the euro is trading 0.2% lower at R16.9543. At 06:00 SAST, the British pound has declined 0.2% against the South African rand to trade at R19.5927.
  • Yesterday, the euro advanced against most of the major currencies. The German economy shrank more than expected in 1Q21, as coronavirus-related restrictions spurred householders to put more money than ever into savings. However, German business morale brightened to hit a two-year high in May, as COVID-19 curbs were eased and infections fell.
  • At 06:00 SAST, the euro marginally advanced against the US dollar to trade at $1.2253, while it has weakened 0.1% against the British pound to trade at GBP0.8654.

ECONOMIC UPDATES

  • In May, the CBI distributive trade survey's retail sales balance fell unexpectedly to a level of 18.0% in the UK, compared to a level of 20.0% in the previous month.
  • In April, on a MoM basis, the producer price index (PPI) advanced 2.9% in Spain. In the previous month, the PPI had recorded a revised rise of 2.6%.
  • In 1Q21, the seasonally adjusted final gross domestic product (GDP) recorded a drop of 1.8% in Germany on a quarterly basis, more than market expectations for a drop of 1.7%. The preliminary figures had recorded a drop of 1.7%. In prior quarter, GDP had advanced by a revised 0.5%.
  • Compared to a revised level of 96.60 in the previous month, the Ifo business climate index climbed to 99.20 in Germany, in May. Market expectations were for the Ifo business climate index to rise to 98.20.
  • In the US, the house price purchase index registered a rise of 3.5% in 1Q21 on a quarterly basis. The house price purchase index had advanced by a revised 3.9% in the prior quarter.
  • The CB consumer confidence index fell unexpectedly to 117.20 in the US, in May. The CB consumer confidence index had registered a revised level of 117.50 in the prior month.
  • On a monthly basis, in the US, the seasonally adjusted S&P/Case-Shiller composite index of 20 metropolitan areas registered a rise of 1.6% in March, higher than market expectations of an advance of 1.1%. In the previous month, the S&P/Case-Shiller composite index of 20 metropolitan areas had registered a revised rise of 1.2%.
  • The Richmond Fed manufacturing index recorded a rise to 18.00 in the US, in May, compared to a reading of 17.00 in the previous month.
  • In April, on a MoM basis, new home sales in the US fell 5.9%. In the prior month, new home sales had registered a revised rise of 7.4%.

CORPORATE UPDATES

SOUTH AFRICA

  • Spar Group Limited (JO:SPPJ): The grocery store company, in its 1H21 results, indicated that its revenue rose to R64.24bn from R59.75bn posted in the corresponding period of the previous year. Its diluted EPS increased 58.1% from the same period of the prior year to 614.30c.
  • Datatec Limited (JO:DTCJ): The information technology company, in its FY21 results, stated that its revenue decreased to $4.11bn from $4.21bn posted in the previous year. Its diluted EPS fell from the prior year to 1.30c.
  • Reinet Investments SCA (JO:RNIJ): The investment company, in its FY21 results, revealed that its income declined from the preceding year to EUR118.00mn. Its unadjusted EPS stood at EUR5.51, compared with a loss per share of EUR1.79 recorded in the previous year.
  • Resilient and PIC talks called off over sale of R5.70bn worth of assets: Shopping centre owner Resilient REIT said its talks to sell up to a quarter of its R24.00bn portfolio of domestic retail centres to SA’s largest investor, the Public Investment Corporation (PIC), have been terminated.
  • Electrical engineering boosts earnings turnaround at Reunert: Electronics group Reunert (JO:RLOJ) has reported positive earnings for the six months to March, a turnaround from its previous loss-making position, driven by revenue growth in its electrical engineering unit.

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