Market Review, Commodities, Currencies, Economic & Corporate Update - 01.11.23

  • Market Overview

SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the red yesterday, as investors await Finance Minister Enoch Godongwana’s medium-term budget policy statement (MTBPS).
  • Gold miners, AngloGold Ashanti (JO: ANGJ ) and Gold Fields (JO: GFIJ ) dropped 3.3% and 3.1%, respectively.
  • Diversified miners, Merafe Resources (JO: MRFJ ), Exxaro Resources (JO: EXXJ ) and Anglo American (JO: AGLJ ) declined 2.5%, 2.2% and 1.1%, respectively.
  • Platinum miners, Anglo American Platinum (JO: AMSJ ) and Northam Platinum (JO: NPHJ ) eased 2.3% and 1.3%, respectively.
  • On the flipside, property developers, Emira Property Fund (JO: EMIJ ), Redefine Properties (JO: RDFJ ) and Growthpoint Properties (JO: GRTJ ) advanced 6.2%, 3.6% and 1.7%, respectively.
  • Pharmaceutical companies, Netcare (JO: NTCJ ), Life Healthcare Group (JO: LHCJ ) and Adcock Ingram Holdings (JO: AIPJ ) gained 3.3%, 2.0% and 0.9%, respectively.
  • The JSE All Share index declined 0.3% to close at 69,653.44.

UK MARKET REVIEW

  • The UK market finished weaker yesterday, weighed down by dismal corporate earnings.
  • Energy company, BP (LON: BP ) dropped 4.6%, after the company reported lower than expected earnings in 3Q23, amid weaker energy prices.
  • Miners, Glencore (LON: GLEN ) and Antofagasta (LON: ANTO ) declined 3.5% and 1.8%, respectively, following a drop in base metal prices.
  • Telecommunications company, Vodafone Group (LON: VOD ) shed 1.3%, after the company announced the sale of its Spanish business for EUR5.00bn ($5.30bn) to Zegona Communications.
  • On the other hand, banking firms, Standard Chartered Group (LON: STAN ), HSBC Holdings (LON: HSBA ) and Barclays (LON: BARC ) advanced 1.6%, 0.9% and 0.7%, respectively.
  • Real estate companies, Barratt Developments (LON: BDEV ), Land Securities Group (LON: LAND ) and Berkeley Group (LON: BKGH ) Holdings rose 1.3%, 1.2% and 0.9%, respectively.
  • The FTSE 100 index declined 0.1% to close at 7,312.72.

US MARKET REVIEW

  • US markets ended higher yesterday, ahead of the US Federal Reserve's (Fed) monetary policy meeting.
  • Social media company, Pinterest (NYSE: PINS ) surged 19.0%, after the company reported a jump in its 3Q23 revenue and profits.
  • Technology companies, Intel (NASDAQ: INTC ), International Business Machines (NYSE: IBM ), Cisco Systems (NASDAQ: CSCO ) and Salesforce (NYSE: CRM ) advanced 2.3%, 1.4%, 1.1% and 0.8%, respectively.
  • Financial services companies, American Express (NYSE: AXP ), JPMorgan Chase (NYSE: JPM ) and Goldman Sachs Group (NYSE: GS ) rose 1.9%, 1.2% and 0.9%, respectively.
  • On the contrary, biotechnology company, Amgen (NASDAQ: AMGN ) dropped 2.9%, after the company reported lower sales for some high-profile medicines in 3Q23.
  • The S&P 500 index rose 0.6% to settle at 4,193.80, while the DJIA index advanced 0.4% to close at 33,052.87.
  • The NASDAQ index climbed 0.5% to end the trading session at 12,851.24.

ASIA MARKET REVIEW

  • Asian markets are trading mostly higher this morning, ahead of the US Fed’s policy meeting.
  • In Japan, logistics company, Mitsubishi Logistics (TYO: 9301 ) has jumped 7.8%.
  • On the flipside, pharmaceutical company, Sumitomo Pharma (TYO: 4506 ) has dropped 6.3%, respectively, In Hong Kong, consumer electronics company, Lenovo Group (HK: 0992 ) has shed 2.1%.
  • On the other hand, real estate company, Hang Lung Properties (OTC: HLPPY ) has gained 1.4%.
  • In South Korea, automotive parts company, CHASYS Company (KS: 033250 ) has soared 11.0%.
  • On the contrary, electronics company, Daidong Electronics (KS: 008110 ) has declined 6.1%.
  • The Nikkei 225 index is trading 2.0% higher at 31,475.62.
  • The Hang Seng index has eased 0.2% to trade at 17,078.69, while the Kospi index is trading 1.0% higher at 2,301.61.

COMMODITIES

  • At 05:30 SAST today, Brent prices fell 2.3% to trade at $85.36/bl.
  • Yesterday, Brent prices marginally fell to settle at $87.41/bl, on easing supply concerns following a rise in the crude oil output from the OPEC+ and the US. Additionally, the American Petroleum Institute (API) reported that the crude oil inventories rose by 1.35mn bls in the week ended 27 October 2023.
  • At 05:30 SAST today, gold prices declined 0.2% to trade at $1,977.94/oz. Yesterday, gold declined 0.7% to close at $1,982.70/oz, ahead of major central bank’s decision due this week.
  • Yesterday, copper declined 0.9% to close at $8,037.15/mt. Aluminium closed 0.7% lower at $2,249.94/mt.

CURRENCIES

  • Yesterday, the South African rand strengthened against the US dollar. In the US, the consumer confidence index declined less than expected in October. Moreover, the Chicago Purchasing Manager’s Index contracted in October. Housing price index advanced in August, Meanwhile, the S&P/Case Shiller home prices index rose for a sixth consecutive month in August.
  • The yield on benchmark government bonds fell yesterday. The yield on the 2030 bond declined to 10.68% while that for the longer-dated 2040 issue fell to 12.80%.
  • At 05:30 SAST, the US dollar is trading 0.2% higher against the South African rand at R18.6814, while the euro is trading 0.2% higher at R19.7527. At 05:30 SAST, the British pound has gained 0.1% against the South African rand to trade at R22.692.
  • Yesterday, the euro declined against most of the major currencies. In Germany, retail sales unexpectedly declined in September. In the eurozone, gross domestic product (GDP) declined in 3Q23. Moreover, consumer price inflation eased to its lowest level since July 2021 in October, due to a sharp fall in energy prices.
  • At 05:30 SAST, the euro slipped 0.1% against the US dollar to trade at $1.0572, while it has marginally gained against the British pound to trade at GBP0.8706.

ECONOMIC UPDATES

  • In South Africa, trade surplus widened to R13.14bn in September, compared to a revised surplus of R12.58bn in the previous month.
  • In Italy, gross domestic product (GDP) recorded a flat reading on a QoQ basis in 3Q23, compared to market expectations for a rise of 0.1%. GDP recorded a drop of 0.4% in the prior quarter.
  • In Italy, the consumer price index (CPI) unexpectedly dropped 0.1% on a MoM basis in October, compared to a rise of 0.2% recorded in the previous month.
  • In Italy, the producer price index (PPI) climbed 0.6% on a MoM basis in September, compared to a rise 0.5% rise in the prior month.
  • In France, GDP rose 0.1% on a QoQ basis in 3Q23, in line with market expectations. GDP had advanced by a revised 0.6% in the previous quarter.
  • In Germany, retail sales unexpectedly dropped 0.8% on a MoM basis in September, compared to a drop of 1.2% recorded in the previous month.
  • In the eurozone, GDP declined 0.1% on a QoQ basis in 3Q23, compared to a rise of 0.1% recorded in the previous quarter.
  • In the eurozone, the CPI rose 0.1% on a MoM basis in October, compared to a rise of 0.3% recorded in the previous month.
  • In the US, the consumer confidence index declined to a level of 102.60 in October, less than market expectations and compared to a level of 104.30 recorded in the prior month.
  • In the US, the housing price index rose 0.6% on a MoM basis in August, compared to a rise of 0.8% recorded in the previous month.
  • In the US, the Chicago Purchasing Managers’ Index (PMI) unexpectedly fell to a level of 44.00 in October, compared to a level of 44.10 recorded in the previous month.
  • In Japan, the Jibun Bank manufacturing PMI rose to a level of 48.70 in October, compared to a level of 48.50 recorded in the prior month.
  • In China, the Caixin manufacturing PMI unexpectedly fell to a level of 49.50 in October, compared to a level of 50.60 recorded in the previous month.
  • In Australia, the AIG (NYSE: AIG ) manufacturing PMI dropped to a level of -20.90 in September, compared to a level of -12.80 recorded in the previous month.
  • In Australia, the Judo Bank manufacturing PMI rose to a level of 48.20 in October, compared to a level of 48.70 recorded in the prior month.

CORPORATE UPDATES

SOUTH AFRICA

  • Impala Platinum Holdings Limited (JO: IMPJ ): The platinum mining company, in its 1Q24 production update, revealed that total 6E group production volumes increased by 21.0% to 1.00mn ounces. Moreover, gross 6E refined and saleable production volumes increased by 25.0% to 885,000 ounces and 6E sales volumes increased by 17.0% to 829,000 ounces. Furthermore, gross tonnes milled at managed operations increased by 29.0% to 7.55mn tonnes.
  • Woolworths Holdings Limited (JO: WHLJ ): The retail company announced the acquisition of 93.45% of the shares in privately-owned pet retailer Absolute Pets (Proprietary) Limited, from Sanlam (JO: SLMJ ) Private Equity and Absolute Pets management. The remaining management-retained shareholding would be acquired by WHL over an agreed period, post the completion of the transaction.
  • Astral Foods Limited (JO: ARLJ ): The food company, in its FY23 trading update, revealed that it expects EPS to be 145% to 155%, lower as compared with 2,781.00c recorded in the prior month. Also, it expects HEPS to be 145% to 155%, lower as compared with 2,762.00c recorded in the prior month. The company intends to release its annual results on 20 November 2023.
  • WBHO (JO: WBOJ ) sends out SOS over construction mafia and skills shortages: Construction major WBHO says the local sector is grappling with multiple headwinds, ranging from marauding construction mafias and skills shortages to slow progress in infrastructure development, and has called on the government to act swiftly to quell these deterrents to business and investor confidence.

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