Market Review, Commodities, Currencies, Economic & Corporate Update - 01.03.24

  • Market Overview

SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the green yesterday, boosted by gains in precious metal mining stocks.
  • Gold miners, Gold Fields (JO: GFIJ ), Harmony Gold Mining (JO: HARJ ) and AngloGold Ashanti (JO: ANGJ ) jumped 5.6%, 3.7% and 2.4%, respectively.
  • Pharmaceutical companies, Adcock Ingram Holdings (JO: AIPJ ), Aspen Pharmacare (JO: APNJ ) and Netcare (JO: NTCJ ) advanced 3.9%, 1.4% and 1.3%, respectively.
  • Property developers, NEPI Rockcastle N.V. (JO: NRPJ ), Emira Property Fund (JO: EMIJ ) and Growthpoint Properties (JO: GRTJ ) gained 2.8%, 1.1% and 0.9%, respectively.
  • Retailers, Cashbuild (JO: CSBJ ), Cie Financiere Richemont S.A. (JO: CFRJ ), Mr Price Group (JO: MRPJ ) and Clicks Group (JO: CLSJ ) rose 2.6%, 2.2%, 1.7% and 1.0%, respectively.
  • Insurance companies, Sanlam (JO: SLMJ ), Discovery Holdings (JO: DSYJ ) and Old Mutual (JO: OMUJ ) increased 2.4%, 1.7% and 1.4%, respectively.
  • The JSE All Share index advanced 0.7% to close at 72,729.75.

UK MARKET REVIEW

  • The UK market finished firmer yesterday, helped by positive domestic corporate earnings results.
  • Kitchens and joinery products company, Howden Joinery Group (LON: HWDN ) jumped 7.0%, after the company announced that it expects robust revenue growth in 2024.
  • Healthcare company, Haleon (LON: HLN ) advanced 5.6%, after the company announced a share buyback plan.
  • Retailer, Ocado Group (LON: OCDO ) gained 4.2%, after the company swung back to an underlying profit in 2023 as its joint venture with M&S returned to profit.
  • Real estate companies, Berkeley Group Holdings (LON: BKGH ) and Land Securities Group (LON: LAND ) added 2.0% and 1.0%, respectively.
  • On the other hand, travel and leisure company, International Consolidated Airlines Group SA (LON: ICAG ) dropped 3.6%, amid concerns over costs, supplies of new jets and ongoing geopolitical risks.
  • The FTSE 100 index advanced 0.1% to close at 7,630.02.

US MARKET REVIEW

  • US markets ended higher yesterday, boosted by gains in technology sector stocks.
  • Technology companies, Salesforce (NYSE: CRM ), Intel (NASDAQ: INTC ), Nvidia Corporation (NASDAQ: NVDA ) and Microsoft (NASDAQ: MSFT ) advanced 3.0%, 2.5%, 1.9% and 1.5%, respectively.
  • Financial services companies, Wells Fargo (NYSE: WFC ), Bank of America (NYSE: BAC ), and JPMorgan Chase (NYSE: JPM ) gained 1.6%, 1.3% and 0.9%, respectively.
  • Media and entertainment companies, Netflix (NASDAQ: NFLX ), Warner Bros Discovery (NASDAQ: WBD ) and Walt Disney (NYSE: DIS ) rose 1.1%, 0.9% and 0.7%, respectively.
  • On the contrary, pharmaceutical companies, Moderna (NASDAQ: MRNA ), Regeneron Pharmaceuticals (NASDAQ: REGN ), Pfizer (NYSE: PFE ) and Merck & Co. (NYSE: MRK ) dropped 5.4%, 2.2%, 1.8% and 0.8%, respectively.
  • The S&P 500 index rose 0.5% to settle at 5,096.27, while the DJIA index advanced 0.1% to close at 38,996.39.
  • The NASDAQ index climbed 0.9% to end the trading session at 16,091.92.

ASIA MARKET REVIEW

  • Asian markets are trading higher this morning, tracking overnight gains on Wall Street.
  • In Japan, consumer electronics company, Panasonic Holdings (TYO: 6752 ) has advanced 3.6%.
  • On the flipside, pharmaceutical company, Sumitomo Pharma (TYO: 4506 ) has shed 3.0%.
  • In Hong Kong, consumer electronics company, Lenovo Group (HK: 0992 ) has jumped 5.7%.
  • On the other hand, internet technology company, NetEase (NASDAQ: NTES ) has declined 1.9%.
  • In South Korea, markets are closed today on account of a public holiday.
  • Yesterday, the Kospi index declined 0.4% to close at 2,642.36.
  • Today, the Nikkei 225 index is trading 1.8% higher at 39,883.86, while the Hang Seng index is trading 0.7% higher at 16,622.80.

COMMODITIES

  • At 05:30 SAST today, Brent prices fell 1.7% to trade at $82.18/bl.
  • Yesterday, Brent prices fell 0.1% to settle at $83.62/bl, on demand concerns and rise in the OPEC+ oil production.
  • At 05:30 SAST today, gold prices advanced 0.1% to trade at $2,046.29/oz. Yesterday, gold gained 0.4% to close at $2,043.24/oz, as a weaker dollar boosted demand for the safe haven yellow metal.
  • Yesterday, copper rose 0.1% to close at $8,401.35/mt. Aluminium closed 1.3% higher at $2,228.20/mt.

CURRENCIES

  • Yesterday, the South African rand strengthened against the US dollar. In South Africa, the producer price index (PPI) rose in line with expectations in January, supported by food, beverages and tobacco products. In the US, the number of initial jobless claims rose more than expected in the week ended 23 February 2024. Meanwhile, pending home sales unexpectedly declined in January. Also, the Chicago PMI declined to its lowest level since July 2023 in February.
  • The yield on benchmark government bonds fell yesterday. The yield on the 2030 bond declined to 10.14%, while that for the longer-dated 2040 issue fell to 12.40%.
  • At 05:30 SAST, the US dollar is trading 0.1% lower against the South African rand at R19.1498, while the euro is trading 0.1% lower at R20.7191. At 05:30 SAST, the British pound has declined 0.2% against the South African rand to trade at R24.1919.
  • Yesterday, the euro mostly declined against most of the major currencies. In Germany, the consumer price index (CPI) eased further in February, to its lowest level since November 2021. Moreover, retail sales unexpectedly declined in January. Meanwhile, the unemployment rate rose in February. In the UK, mortgage approvals increased to a 15-month high in January.
  • At 05:30 SAST, the euro advanced 0.1% against the US dollar to trade at $1.0822, while it has gained 0.1% against the British pound to trade at GBP0.8566.

ECONOMIC UPDATES

  • In South Africa, the producer price index (PPI) rose 0.1% on a MoM basis in January, in line with market expectations. The PPI had declined 0.6% in the previous month.
  • In Germany, the consumer price index (CPI) rose 0.4% on a MoM basis in February, less than market expectations for a rise of 0.5%. The CPI had recorded a rise of 0.2% in the previous month.
  • In Germany, retail sales unexpectedly dropped 0.4% on a MoM basis in January, compared to a drop pf 1.6% recorded in the previous month.
  • In Germany, the seasonally adjusted unemployment rate unexpectedly rose to 5.9% in February, compared to a rate of 5.8% recorded in the prior month.
  • In the US, initial jobless claims rose to a level of 215.00K in the week ended 23 February 2024, more than market expectations and compared to a revised rise of 202.00K in the previous week.
  • In the US, the Chicago PMI unexpectedly declined to a level of 44.00 in February, compared to a level of 46.00 recorded in the previous month.
  • In the US, the pending home sales unexpectedly dropped 4.9% on a MoM basis in January, compared to a revised rise of 5.7% recorded in the previous month.
  • In the US, the Kansas Fed manufacturing activity index rose to a level of 3.00 in February, compared to a level of -17.00 recorded in the prior month.
  • In Canada, annualised gross domestic product (GDP) rose 1.0% in 4Q23, more than market expectations for a rise of 0.8%. GDP had recorded a revised drop of 0.5% in the prior quarter.
  • In Japan, the unemployment rate fell to 2.4% in January, in line with market expectations and compared to a revised 2.5% recorded in the previous month.
  • In Japan, the Jibun Bank manufacturing PMI dropped to a level of 47.20 in February, compared to a level of 48.00 recorded in the prior month.
  • In China, the NBS manufacturing PMI fell to a level of 49.10 in February, in line with market expectations. The manufacturing PMI had recorded a level of 49.20 in the prior month.
  • In China, the Caixin manufacturing PMI unexpectedly rose to a level of 50.90 in February, compared to a level of 50.80 recorded in the previous month.
  • In New Zealand, the Judo Bank manufacturing PMI declined to a level of 47.80 in February, compared to a level of 50.10 recorded in the prior month.

CORPORATE UPDATES

SOUTH AFRICA

  • FirstRand Limited (JO: FSRJ ): The banking company, in its 1H24 results, announced that interest and similar income increased to R92.93bn from R69.39bn posted in the corresponding period of the previous year. Its diluted EPS rose 8.9% from the same period of the prior year to 348.10c.
  • Sanlam Limited (JO: SLMJ ): The financial services company, in its trading update for the financial year ended 31 December 2023, indicated that it expects EPS to be 670.00c to 730.00c, as compared with 598.00c recorded in the previous year. Also, it expects HEPS to be between 676.00c to 723.00c, as compared with 473.00c recorded in the prior year.
  • Impala Platinum Holdings Limited (JO: IMPJ ): The platinum mining company, in its 1H24 results, indicated that its revenue fell to R43.43bn from R57.80bn posted in the corresponding period of the previous year. Its diluted EPS stood at 180.00c, compared with 1,644.00c recorded in the corresponding period of the previous year.
  • Santam Limited (JO: SNTJ ): The insurance company, in its FY23 results, reported that group insurance revenue advanced 8.8% from the preceding year to R46.88bn. Its diluted EPS stood at R29.52, compared with R17.94 recorded in the previous year.
  • Truworths International Limited (JO: TRUJ ): The clothing retail company, in its interim results for the six months ended 31 December 2023, indicated that its revenue rose to R12.75bn from R11.73bn posted in the corresponding period of the previous year. Its diluted EPS increased 4.2% from the same period of the prior year to 523.40c.
  • Fortress Real Estate Investments Limited: The real estate investment trust company, in its trading update, announced that following the implementation of the Scheme where the company repurchased all of the Fortress B shares in issue in consideration for 0.060207 NEPI Rockcastle N.V. shares for every FFB share in issue, together with the conversion of all of the Fortress A (‘FFA’) shares in issue into FFB shares. The company now only has one class of share in issue, comprising 1.17bn FFB shares. As a result of the implementation of the Scheme and the Empowerment settlement transactions, Fortress’ shareholding in NEPI Rockcastle has reduced from 160.14mn shares at 31 December 2023 to 107.00mn shares.
  • Shaftesbury Capital Plc (JO: SHCJ ): The real estate investment trust company, in its FY23 results, indicated that its revenue increased to GBP195.10mn, compared with GBP74.10mn posted in the previous year. Its diluted EPS stood at 45.30p, compared with a loss per share of 24.90p recorded in the previous year.
  • Spur Corporation Limited (JO: SURJ ): The casual dining restaurant franchise company, in its 1H24 results, revealed that its revenue rose 15.2% from the same period of the preceding year to R1.77bn. Its diluted EPS stood at 156.79c, compared with 136.65c recorded in the corresponding period of the previous year.
  • Murray & Roberts Holdings Limited (JO: MURJ ): The engineering and mining contract company, in its trading update for the six months ended 31 December 2023, revealed that it expects basic loss per share to be between 21.00c to 26.00c, as compared with 627.00c recorded in the prior year. Also, it expects HEPS to be between 24.00c to 29.00c, as compared with 322.00c recorded in the prior year.
  • Grindrod Shipping (JO: GSHJ ) swings to loss as dry-bulk demand wanes: The shares of Grindrod Shipping were on track for their worst day in two weeks after the maritime transportation services group reported an annual loss as dry-bulk demand declined.

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