SOUTH AFRICA MARKET REVIEW
- South African markets closed in the red on Friday, led by losses in food sector stocks.
- Consumer staple companies, Astral Foods (JO:ARLJ), AVI (JO:AVIJ) and RCL Foods (JO:RCLJ) edged down 7.3%, 2.2% and 1.0%, respectively.
- Telecommunications companies, MTN Group (JO:MTNJ) and Vodacom Group (JO:VODJ) shed 3.7% and 1.5%, respectively.
- Platinum miners, Anglo American Platinum (JO:AMSJ) and Impala Platinum Holdings (JO:IMPJ) declined 3.5% and 2.3%, respectively.
- Gold miners, AngloGold Ashanti (JO:ANGJ), Harmony Gold Mining (JO:HARJ) and Sibanye Stillwater (JO:SSWJ) dropped 2.6%, 2.2% and 0.8%, respectively.
- Insurance companies, Old Mutual (JO:OMUJ), Discovery and Sanlam (JO:SLMJ) eased 1.0%, each.
- On the flipside, healthcare companies, Adcock Ingram Holdings (JO:AIPJ) and Life Healthcare Group Holdings (JO:LHCJ) gained 4.8% and 2.5%, respectively.
- The JSE All Share index closed 0.6% lower at 76,704.26.
UK MARKET REVIEW
- The UK market finished firmer on Friday, as investors assessed latest US inflation reading that raised hopes for September rate cuts.
- Energy utility companies, National Grid (LON:NG), SSE (LON:SSE) and Centrica (LON:CNA) jumped 4.7%, 2.3% and 1.7%, respectively.
- Water utility companies, Severn Trent (LON:SVT) and United Utilities Group (LON:UU) gained 2.1% and 1.3%, respectively.
- Consumer goods companies, Reckitt Benckiser Group (LON:PSN) and Unilever (LON:ULVR) added 1.9% and 0.5%, respectively.
- On the contrary, retailer, JD Sports Fashion (LON:JD) shed 4.7%, after the company reported a drop in 1Q24 sales amid volatile market.
- Peers, Associated British Foods (LON:ABF), Ocado Group (LON:OCDO), and Burberry Group (LON:BRBY) declined 4.1%, 2.6% and 1.8%, respectively.
- The FTSE 100 index advanced 0.5% to close at 8,275.38.
US MARKET REVIEW
- US markets ended mostly in the green on Friday, as consumer spending slowed more than expected.
- Technology companies, Salesforce (NYSE:CRM), Intel (NASDAQ:INTC) and Cisco Systems (NASDAQ:CSCO) gained 7.5%, 2.2% and 0.8%, respectively.
- Insurance companies, UnitedHealth Group (NYSE:UNH) and Travelers Cos (NYSE:TRV)., advanced 2.9% and 1.5%, respectively.
- Clothing retail company, Gap (NYSE:GPS) skyrocketed 28.6%, after the company raised its annual sales forecast and reported first-quarter results that beat market expectations.
- On the other hand, technology company, Dell (NYSE:DELL) plunged 17.9%, after the company projected weaker profits for the current-quarter and indicated lower annual margins amid higher costs to build servers that meet heavy AI workloads.
- The S&P 500 index gained 0.8% to settle at 5,277.51, while the DJIA index advanced 1.5% to close at 38,686.32.
- The NASDAQ index marginally eased to end the trading session at 16,735.02.
ASIA MARKET REVIEW
- Asian markets are trading higher this morning, after Chinese and Japanese factory activity improved in May.
- In Japan, transport company, Kawasaki Kisen Kaisha (TYO:9107) has advanced 3.8%.
- On the flipside, electric motors manufacturing company, Nidec Corporation (TYO:6594) has eased 2.0%.
- In Hong Kong, technology company, Tencent Holdings (HK:0700) has added 3.7%.
- On the other hand, pharmaceutical company, Sino Biopharmaceutical (HK:1177) has shed 1.4%.
- In South Korea, electronics company, Samsung Electronics (KS:005930) has gained 3.5%.
- On the contrary, non-ferrous metal smelting company, Korea Zinc Co. (KS:010130) has shed 6.1%.
- The Nikkei 225 index is trading 0.9% higher at 38,849.65.
- The Hang Seng index has advanced 2.6% to trade at 18,550.12, while the Kospi index is trading 1.9% higher at 2,687.65.
COMMODITIES
- At 05:30 SAST today, Brent prices fell 0.4% to trade at $81.29/bl, even after the OPEC+ agreed to extend output of 2.2 million barrels per day into the third quarter of 2024.
- On Friday, Brent prices fell 0.3% to settle at $81.62/bl, ahead of the OPEC+ meeting. Meanwhile, the Baker Hughes reported that the US oil rigs count fell by 1 to 496 in the week ended 31 May 2024.
- At 05:30 SAST today, gold prices marginally advanced to trade at $2,327.27/oz. On Friday, gold declined 0.7% to close at $2,326.97/oz, as investors assessed softer US inflation data.
- On Friday, copper declined 1.0% to close at $9,913.23/mt. Aluminium closed 0.4% higher at $2,714.96/mt.
CURRENCIES
- On Friday, the South African rand weakened against the US dollar. In the US, the Chicago business activity unexpectedly eased at a faster pace in May.
- The yield on benchmark government bonds were higher on Friday. The yield on the 2030 bond rose to 10.64%, while that for the longer-dated 2040 issue rose to 12.79%.
- At 05:30 SAST, the US dollar is trading 0.3% lower against the South African rand at R18.7339, while the euro is trading 0.3% lower at R20.3334. At 05:30 SAST, the British pound has declined 0.3% against the South African rand to trade at R23.8799.
- On Friday, the euro mostly advanced against most of the major currencies. In the eurozone, core inflation advanced in May, driven by higher services costs.
- At 05:30 SAST, the euro advanced 0.1% against the US dollar to trade at $1.0856, while it has marginally gained against the British pound to trade at GBP0.8518.
ECONOMIC UPDATES
- In South Africa, trade surplus widened to R10.47bn in April, compared to a surplus of R7.27bn in the previous month.
- In the UK, seasonally adjusted house prices index climbed 0.4% on a MoM basis in May, more than market expectations for a rise of 0.1%. House prices index had registered a drop of 0.4% in the previous month.
- In France, final gross domestic product (GDP) recorded a rise of 0.2% on a QoQ basis in 1Q24, at par with market expectations. In the previous quarter, GDP had risen 0.1%.
- In France, The National Institute of Statistics and Economic Studies (INSEE) has reported that, in April, on a monthly basis, the producer price index fell 2.80% in France. In the previous month, the producer price index had registered a revised drop of 0.70%.
- In Italy, GDP registered a rise of 0.3% on a QoQ basis in 1Q24, more than market expectations for a rise of 0.2%. GDP had climbed 0.2% in the previous quarter.
- In Italy, the CPI had advanced 0.2% on a MoM basis in May, in line with market expectations and compared to a rise of 0.1% in the prior month.
- In Germany, retail sales registered a drop of 1.2% on a MoM basis in April, more than market expectations for a drop of 0.1%. Retail sales had risen by a revised 2.6% in the previous month.
- In the eurozone, the consumer price index (CPI) recorded a rise of 0.2% on a MoM basis in May. The CPI had recorded a rise of 0.6% in the previous month.
- In the US, the Chicago PMI unexpectedly eased to a level of 35.40 in May, compared to a level of 37.90 recorded in the prior month.
- In Canada, annualized GDP advanced 0.4% on a QoQ basis in 1Q24, compared to a flat reading in the previous quarter.
- In Japan, the Jibun Bank manufacturing PMI rose less than expected to a level of 50.40 in May, compared to a level of 49.60 recorded in the previous month.
- In China, the Caixin manufacturing PMI advanced to a level of 51.70 in May, more than market expectation and compared to a level of 51.40 recorded in the prior month.
CORPORATE UPDATES
SOUTH AFRICA
- Nedbank Group Limited (JO:NEDJ): The banking company, in its trading update for the four months ended 30 April 2024, revealed that net interest income (NII) was just below mid-single digits when compared to the prior period, driven by moderate growth in average interest earning banking assets and a slight period on period increase in the group’s net interest margin (NIM) as a result of the run-rate benefit of interest rate increases (endowment) in the prior period. Average interest earning banking assets increased period on period by low-to-mid single digits. Meanwhile, non-interest revenue (NIR) growth was below mid-single digits.
- Dis-Chem Pharmacies Limited (JO:DCPJ): The pharma chain company, in its FY24 results, reported that its revenue advanced 11.1% from the preceding year to R36.28bn. Its diluted EPS stood at 114.70c, compared with 116.30c recorded in the previous year.
- Lewis Group Limited (JO:LEWJ): The retail company, in its annual results for the year ended 31 March 2024, indicated that revenue rose to R8.18bn from R7.46bn posted in the previous year. Its diluted EPS increased 16.2% from the prior year to 781.20c.