SOUTH AFRICA MARKET REVIEW
- South African markets closed in the red yesterday, as investors assessed US jobs data for cues on the US Federal Reserve’s (Fed) interest rate path.
- Pharmaceutical companies, Life Healthcare Group (JO:LHCJ), Netcare (JO:NTCJ) and Adcock Ingram Holdings (JO:AIPJ) dropped 6.7%, 3.8% and 1.2%, respectively.
- Food companies, RCL Foods (JO:RCLJ), Famous Brands (JO:FBRJ) and Tiger Brands (JO:TBSJ) shed 4.7%, 4.6% and 2.5%, respectively.
- Gold miners, Sibanye Stillwater (JO:SSWJ), Harmony Gold Mining (JO:HARJ) and AngloGold Ashanti (JO:ANGJ) declined 3.1%, 2.7% and 1.8%, respectively.
- Platinum miners, Anglo American Platinum (JO:AMSJ) and Impala Platinum (JO:IMPJ) fell 3.1% and 1.7%, respectively.
- On the flipside, telecommunications companies, Telkom SA SOC (JO:TKGJ), MTN Group (JO:MTNJ) and Vodacom Group (JO:VODJ) advanced 3.1%, 2.2% and 1.0%, respectively.
- The JSE All Share index marginally declined to close at 76,046.88.
UK MARKET REVIEW
- UK markets finished firmer yesterday, following upbeat corporate earnings reports.
- Banking firm, Standard Chartered (LON:STAN) surged 8.8%, after the company reported better than expected pre-tax profit in 1Q24.
- Homebuilding companies, Taylor Wimpey (LON:TW) and Persimmon (LON:PSN) advanced 2.4% and 1.3%, respectively.
- Retailer, Ocado Group (LON:OCDO) gained 2.0%, after data showed that the company was Britain's fastest growing grocer over the last quarter, followed by discounter Lidl and upmarket food seller Marks & Spencer.
- Energy company, Shell (LON:RDSa) rose 1.9%, after the company reported upbeat profit of $7.70 bn in 1Q24, driven by strong oil trading and higher refining margins.
- On the other hand, miners, Antofagasta (LON:ANTO) and Glencore (JO:GLNJ) both declined 1.7% each.
- The FTSE 100 index advanced 0.6% to close at 8,172.15.
US MARKET REVIEW
- US markets ended higher yesterday, following the US Fed’s dovish monetary policy stance.
- Semiconductor chips company, Qualcomm (NASDAQ:QCOM) surged 9.7%, after the company forecasted better than expected sales and adjusted profit for 3Q24, driven by selling pricier chips into Android smartphones with AI features.
- Media and entertainment companies, Warner Bros Discovery (NASDAQ:WBD), Netflix (NASDAQ:NFLX) and Walt Disney (NYSE:DIS) advanced 4.3%, 2.4% and 1.9%, respectively.
- On the contrary, e-commerce company, Etsy (NASDAQ:ETSY) plunged 15.1%, after the company reported lower than expected gross merchandise sales and profit in 1Q24.
- The S&P 500 index rose 0.9% to settle at 5,064.20, while the DJIA index advanced 0.9% to close at 38,225.66.
- The NASDAQ index climbed 1.5% to end the trading session at 15,840.96.
ASIA MARKET REVIEW
- Asian markets are trading higher this morning. In Japan, the markets are closed today on account of a public holiday.
- In Hong Kong, insurance company, AIA Group (HK:1299) has advanced 2.5%.
- On the other hand, pharmaceutical company, Sino Biopharmaceutical (HK:1177) has declined 1.4%.
- In South Korea, cosmetic company, paper company, Shin Poong Paper Manufacturing (KS:002870) has jumped 5.4%.
- On the contrary, chemical company, ISU Specialty Chemical (KS:457190) has plunged 7.4%.
- Yesterday, the Nikkei 225 index declined 0.1% to close at 38,236.07.
- Today, the Hang Seng index has gained 1.1% to trade at 18,412.59, while the Kospi index is trading 0.2% higher at 2,688.59.
COMMODITIES
- At 05:30 SAST today, Brent prices rose 0.2% to trade at $83.86/bl.
- Yesterday, Brent prices rose 0.3% to settle at $83.67/bl, amid expectations that the US might begin replenishing its strategic reserve.
- At 05:30 SAST today, gold prices declined 0.1% to trade at $2,301.48/oz. Yesterday, gold declined 0.6% to close at $2,303.29/oz, as prospects of interest rate remaining higher for longer weighed on investor sentiment.
- Yesterday, copper declined 1.5% to close at $9,642.29/mt. Aluminium closed 1.7% lower at $2,537.35/mt.
CURRENCIES
- Yesterday, the South African rand strengthened against the US dollar. In the US, nonfarm productivity increased less than expected in 1Q24. Moreover, factory orders increased in March, in line with market expectations. Meanwhile, the initial jobless claims unexpectedly remained steady in the week ended 26 April 2024.
- The yield on benchmark government bonds fell yesterday. The yield on the 2030 bond declined to 10.90%, while that for the longer-dated 2040 issue fell to 13.10%.
- At 05:30 SAST, the US dollar is trading slightly lower against the South African rand at R18.5509, while the euro is trading 0.1% higher at R19.9091. At 05:30 SAST, the British pound has gained 0.2% against the South African rand to trade at R23.2818.
- Yesterday, the euro mostly advanced against most of the major currencies. In Germany, the HCOB manufacturing PMI rose more than expected in April. In the eurozone, the HCOB manufacturing PMI fell less than expected in April.
- At 05:30 SAST, the euro marginally advanced against the US dollar to trade at $1.0732, while it has weakened 0.1% against the British pound to trade at GBP0.8554.
ECONOMIC UPDATES
- In Switzerland, the consumer price index (CPI) rose 0.3% on a MoM basis in April, more than market expectations for a rise to a level of 0.1%. The CPI had recorded a flat reading in the previous month.
- In Spain, the HCOB manufacturing PMI unexpectedly rose to a level of 52.20 in April, compared to a level of 51.40 recorded in the previous month.
- In Italy, the HCOB manufacturing PMI fell to a level of 47.30 in April, more than market expectations for a fall to a level of 50.00. The HCOB manufacturing PMI had recorded a level of 50.40 in the prior month.
- In Italy, the producer price index (PPI) dropped 0.2% on a MoM basis in March, compared to a drop of 1.0% recorded in the previous month.
- In France, the HCOB manufacturing PMI fell to a level of 45.30 in April, less than market expectations for a fall to a level of 44.90. The HCOB manufacturing PMI had recorded a level of 46.20 in the prior month.
- In Germany, the HCOB manufacturing PMI rose to a level of 42.50 in April, more than market expectations for a rise to a level of 42.20. The HCOB manufacturing PMI had recorded a level of 41.90 in the prior month.
- In the eurozone, the HCOB manufacturing PMI fell to a level of 45.70 in April, less than market expectations for a fall to a level of 45.60. The HCOB manufacturing PMI had recorded a level of 46.10 in the prior month.
- In the US, the initial jobless claims unexpectedly remained steady at 208.00K in the week ended 26 April 2024.
- In the US, factory orders rose 1.6% on a MoM basis in March, in line with market expectations. Factory orders had recorded a revised rise of 1.2% in the previous month.
- In the US, goods trade deficit widened to $92.50bn in March, compared to a deficit of $91.80bn recorded in the previous month.
- Canada reported an international merchandise trade deficit of C$2.28bn in March, from a revised surplus of C$0.48bn recorded in the previous month.
- In Australia, the Judo bank services PMI fell to a level of 53.60 in April, more than market expectations for a fall to a level of 54.20. The Judo bank services PMI had recorded a level of 54.40 in the previous month.
CORPORATE UPDATES
SOUTH AFRICA
- Sasol Limited (JO:SOLJ): The energy and chemical company announced that Chief Financial Officer (CFO) and Executive Director, Mr Hanré Rossouw will step down on 31 October 2024.
- Life Healthcare Group Holdings Limited (JO:LHCJ): The pharmaceutical company, in its operational update for the six-month period ended 31 March 2024, revealed that group revenue increased between 7.0% to 8.0%, driven by robust activity growth in southern Africa and higher sales in Neuraceq doses. Paid patient days (PPDs) growth in the acute hospital and complementary businesses grew by 2.3% attributed to increased volumes from the preferred network deals and the addition of ICU beds in certain facilities. Consequently, weighted average occupancy level during H1-2024 stood at 67.0%. Revenue from complementary services advanced between 7.2% - 8.2%. This growth was driven by strong activity growth in diagnostic imaging services and renal dialysis treatments. Furthermore, southern African revenue has grown between 5.3% to 6.3%, as compared with the previous year and normalised EBITDA declined between 4.1%-5.1%, as compared with the previous year. The company intends to release its interim results for the six months to 31 March 2024 on or about 22 May 2024.
- Datatec Limited (JO:DTCJ): The information technology company, in its FY24 trading update, revealed that it anticipates a 6.0% increase in group revenue, reaching approximately $5.46bn. Moreover, it projects EPS to fall within a range of 19.00 and 21.00 US cents, a notable improvement compared to the 7.90 US cents recorded in the previous year. Also, it expects HEPS to be between 13.00 and 15.00 US cents, higher as compared with HLPS of 9.30 US cents recorded in the prior year. The company intends to release its FY24 results on or about 27 May 2024.
- Canal+ raises its holding in MultiChoice (JO:MCGJ) to 42.47%: The takeover regulation panel has granted MultiChoice and Canal+ an extension to distribute a combined circular to shareholders outlining details of the French group’s bid to take over Africa’s largest pay TV group.