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Market Review, Commodities, Currencies, Economic & Corporate Update - 02.05.24

Published 2024/05/02, 10:02
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SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the red on Tuesday, led by losses in commodity sector stocks.
  • Gold miners, Gold Fields, Sibanye Stillwater (JO:SSWJ), AngloGold Ashanti (JO:ANGJ) and Harmony Gold Mining (JO:HARJ) dropped 7.5%, 6.2%, 6.1% and 4.2%, respectively.
  • Platinum miners, Impala Platinum, Northam Platinum (JO:NPHJ) and Anglo American Platinum (JO:AMSJ) declined 5.5%, 2.5% and 1.1%, respectively.
  • Diversified miners, Anglo American (JO:AGLJ), African Rainbow Minerals (JO:ARIJ) and Pan African Resources (JO:PANJ) shed 3.7%, 3.6% and 3.2%, respectively.
  • Telecommunications companies, Telkom SA SOC (JO:TKGJ), Vodacom Group (JO:VODJ) and MTN Group (JO:MTNJ) eased 1.6%, 1.0% and 0.4%, respectively.
  • On the flipside, food companies, RCL Foods (JO:RCLJ), Famous Brands (JO:FBRJ) and Tiger Brands (JO:TBSJ) advanced 5.0%, 4.4% and 3.3%, respectively.
  • The JSE All Share index declined 0.5% to close at 76,076.19.

UK MARKET REVIEW

  • The UK market finished weaker yesterday, dampened by weaker domestic economic data.
  • Healthcare company, Haleon (LON:HLN) dropped 2.5%, after the company reported lower than expected revenues in 1Q24.
  • Energy companies, BP (LON:BP) and Shell (LON:RDSa) declined 2.1% and 1.5%, respectively.
  • Homebuilding companies, Persimmon (LON:PSN) and Taylor Wimpey (LON:TW) shed 1.2% and 1.0%, respectively.
  • On the other hand, pharmaceutical company, GSK (LON:GSK) advanced 1.9%, after the company projected robust sales in 1H24 and raised its annual profit guidance.
  • Water utilities companies, Severn Trent (LON:SVT) and United Utilities Group (LON:UU) gained 1.3% and 0.9%, respectively.
  • The FTSE 100 index declined 0.3% to close at 8,121.24.

US MARKET REVIEW

  • US markets ended mostly lower yesterday, as weaker domestic economic data and deteriorating consumer confidence dampened investor morale.
  • Semiconductor companies, Advanced Micro Devices (NASDAQ:AMD), Nvidia Corporation (NASDAQ:NVDA) and Micron Technology (NASDAQ:MU) dropped 8.9%, 3.9% and 2.9%, respectively.
  • Financial services companies, Mastercard (NYSE:MA) and American Express (NYSE:AXP) shed 2.0% and 1.1%, respectively.
  • On the contrary, media and entertainment companies, Paramount Global (NASDAQ:PARA) and Warner Bros Discovery (NASDAQ:WBD) advanced 7.6% and 3.5%, respectively.
  • Pharmaceutical companies, Pfizer (NYSE:PFE) and Moderna (NASDAQ:MRNA) gained 6.1% and 1.0%, respectively.
  • The S&P 500 index fell 0.3% to settle at 5,018.39, while the DJIA index advanced 0.2% to close at 37,903.29.
  • The NASDAQ index eased 0.3% to end the trading session at 15,605.48.

ASIA MARKET REVIEW

  • Asian markets are trading mostly higher this morning, after China lifted more restrictions on property market.
  • In Japan, pharmaceuticals company, Daiichi Sankyo (TYO:4568) has advanced 3.2%.
  • On the flipside, chemical company, Sumitomo Chemical (TYO:4005) has declined 2.2%.
  • In Hong Kong, real estate companies, Country Garden Services Holdings (HK:2007) and Longfor Group Holdings (HK:0960) have advanced 11.7% and 7.8%, respectively.
  • On the other hand, pharmaceutical company, Sinopharm Group (HK:1099) has shed 2.1%.
  • In South Korea, pharmaceutical company, Shin Poong Pharmaceutical (KS:002870) has dropped 4.8%.
  • On the contrary, industrial adhesive tapes company, Tapex (KS:055490) has surged 12.9%.
  • The Nikkei 225 index is trading 0.1% higher at 38,299.71.
  • The Hang Seng index has advanced 2.2% to trade at 18,145.53, while the Kospi index is trading 0.2% lower at 2,687.76.

COMMODITIES

  • At 05:30 SAST today, Brent prices rose 0.5% to trade at $83.88/bl.
  • Yesterday, Brent prices fell 5.0% to settle at $83.44/bl, amid prospects of a ceasefire agreement between Israel and Hamas as well as drop in hopes for an early rate cuts in the US. Additionally, the US Energy Information Administration (EIA) reported that the US crude inventories advanced by 7.27mn bls in the week ended 26 April 2024.
  • At 05:30 SAST today, gold prices advanced 0.1% to trade at $2,320.06/oz. Yesterday, gold gained 1.5% to close at $2,317.88/oz.
  • Yesterday, copper declined 1.8% to close at $9,790.50/mt. Aluminium closed marginally lower at $2,581.65/mt.

CURRENCIES

  • Yesterday, the South African rand strengthened against the US dollar. In the US, the ISM manufacturing PMI contracted in April. Also, the JOLTs job openings fell more than expected in March. Meanwhile, the ADP employment increased more than expected in April.
  • The yield on benchmark government bonds rose on Tuesday. The yield on the 2030 bond advanced to 10.94%, while that for the longer-dated 2040 issue rose to 13.16%.
  • At 05:30 SAST, the US dollar is trading 0.1% lower against the South African rand at R18.5755, while the euro is trading 0.2% lower at R19.8983. At 05:30 SAST, the British pound has declined 0.1% against the South African rand to trade at R23.2751.
  • Yesterday, the euro mostly advanced against most of the major currencies. In the UK, the S&P Global manufacturing PMI declined in April. Moreover, the Nationwide house prices unexpectedly declined in April, reflecting affordability pressures amid rising longer term interest rates.
  • At 05:30 SAST, the euro marginally slipped against the US dollar to trade at $1.0714, while it has marginally weakened against the British pound to trade at GBP0.8551.

ECONOMIC UPDATES

  • In South Africa, trade surplus narrowed to R7.27bn in March, compared to a surplus of R14.04bn recorded in the previous month.
  • In the UK, seasonally adjusted nationwide housing prices unexpectedly dropped 0.4% on a MoM basis in April, compared to a fall of 0.2% recorded in the previous month.
  • In the UK, the S&P Global manufacturing PMI fell less than expected to a level of 49.10 in April, compared to a level of 50.30 recorded in the previous month.
  • In Germany, retail sales rose 1.8% on a MoM basis in March, compared to a drop of 1.9% recorded in the previous month.
  • In Germany, the unemployment rate remained unchanged at 5.9% in April, in line with market expectations.
  • In Germany, gross domestic product (GDP) rose 0.2% on a QoQ basis in 1Q24, less than market expectations for a rise of 0.1%. GDP had recorded a drop of 0.3% in the previous quarter.
  • In the eurozone, GDP rose 0.3% on a QoQ basis in 1Q24, more than market expectations and compared to a flat reading in the previous quarter.
  • In the eurozone, the consumer price index (CPI) rose 0.6% on a MoM basis in April, compared to a rise of 0.8% recorded in the prior month.
  • In the US, the housing price index climbed 1.2% on a MoM basis in February, more than market expectations for a rise of 0.1%. The housing price index had declined 0.1% in the prior month.
  • In the US, the MBA mortgage application dropped 2.3% in the week ended 26 Apil 2024, compared to a drop of 2.7% recorded in the prior week.
  • In the US, the ADP employment rose by 192.00K in April, more than market expectations and compared to a revised rise of 208.00K jobs recorded in the previous month.
  • In the US, the S&P Global manufacturing PMI eased to a level of 50.00 in April, more than market expectations for a fall to a level of 49.90. The S&P Global manufacturing PMI had recorded a level of 51.90 in the prior month.
  • In the US, the ISM manufacturing PMI dropped to a level of 49.20 in April, more than market expectations for a fall to a level of 50.00. The manufacturing PMI had recorded a level of 50.30 in the prior month.
  • In the US, the JOLTs job openings rose to 8.49mn in March, less than market expectations and compared to a revised 8.81mn jobs recorded in the previous month.
  • In the US, the Federal Reserve kept its key interest rate unchanged at 5.5%, in line with market expectations.
  • In Canada, the S&P Global manufacturing PMI unexpectedly declined to a level of 49.40 in April, compared to a level of 49.80 recorded in the prior month.
  • In the US, consumer confidence unexpectedly dropped to a level of 97.00 in April, compared to a level of 103.10 recorded in the previous month.
  • In Japan, the Jibun Bank manufacturing PMI advanced less than expected to a level of 49.60 in April, compared to a level of 48.20 recorded in the prior month.

CORPORATE UPDATES

SOUTH AFRICA

  • Gold Fields Limited (JO:GFIJ): The gold mining company announced the appointment of Mr. Alex Dall as Interim Chief Financial Officer (CFO), with effect from 1 May 2024, following the early retirement of CFO and Executive Director, Mr. Paul Andy Schmidt who has stepped down from his role, with effect from 30 April 2024.
  • Harmony Gold Mining Company Limited (JO:HARJ): The gold mining company, in its operational update for the nine months ended 31 March 2024, revealed that total gold production increased 10.0% to 36,777kg. Gold revenue increased 26.0% to R42.40bn. Meanwhile, group all-in sustaining costs (AISC) declined 2.0% to R877,965kg. Furthermore, group operating free cash flow increased to R8.77bn from R3.24bn, driven by higher recovered grades at Mponeng, Moab Khotsong, Hidden Valley and Mine Waste Solutions. For FY24, the company expects total production to be approximately 1,550,000 ounces.
  • Impala Platinum Holdings Limited (JO:IMPJ): The platinum mining company, in its production update for the period ended 31 March 2024, revealed that Group 6E production increased by 13.0% to 827,000 ounces. Tonnes milled at managed operations increased by 16.0% to 6.48mn tonnes. 6E milled grade of 3.64g/t was stable and 6E production at managed operations increased by 17% to 657,000 ounces, with a like-for-like retracement of 2.0%. 6E production from the joint ventures (JVs) at Mimosa and Two Rivers increased by 7.0% to 134,000 ounces. At Impala Refining Services (IRS), third-party 6E receipts of 37,000 ounces were 23.0% lower than the prior year as two contracts concluded in FY23.
  • Afrimat Limited (JO:AFTJ): The mining and materials company announced that it has completed the acquisition of certain assets and a right to mine select deposits at the Glenover mine, as well as the option to acquire 100% of the shares in Glenover Phosphate Proprietary Limited from the current shareholders together with all claims that the current shareholders may have against Glenover.

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