Market Review, Commodities, Currencies, Economic & Corporate Update - 03.10.23

  • Market Overview

SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the red yesterday, weighed down by losses in precious metal sector stocks.
  • Platinum miners, Anglo American Platinum (JO: AMSJ ), Northam Platinum (JO: NHMJ ) and Impala Platinum (JO: IMPJ ) dropped 5.2%, 4.6% and 3.0%, respectively.
  • Gold miners, AngloGold Ashanti (JO: ANGJ ) and Gold Fields (JO: GFIJ ) shed 4.6% and 3.8%, respectively.
  • Retailers, Mr Price Group (JO: MRPJ ), Shoprite Holdings (JO: SHPJ ) and Clicks Group (JO: CLSJ ) declined 3.4%, 1.2% and 1.0%, respectively.
  • Lenders, Nedbank Group (JO: NEDJ ), FirstRand (JO: FSRJ ), Standard Bank Group (JO: SBKJ ) and Capitec Bank Holdings (JO: CPIJ ) fell 2.3%, 1.8%, 1.6% and 1.1%, respectively.
  • Diversified miners, Kumba Iron Ore (JO: KIOJ ), Anglo American and Exxaro Resources (JO: EXXJ ) eased 1.7%, 1.6% and 1.2%, respectively.
  • The JSE All Share index declined 1.6% to close at 71,238.06.

UK MARKET REVIEW

  • The UK market finished weaker yesterday, after the UK's benchmark 10-year yield surged.
  • Real estate companies, Persimmon (LON: PSN ), Barratt Developments (LON: BDEV ), Berkeley Group Holdings (LON: BKGH ) and Land Securities Group (LON: LAND ) shed 3.8%, 3.0%, 2.7% and 1.1%, respectively.
  • Insurance companies, Prudential (LON: PRU ), Legal & General Group (LON: LGEN ), Admiral Group (LON: ADML ) and Aviva (LON: AV ) dropped 3.2%, 3.1%, 2.3% and 2.1%, respectively.
  • Miners, Fresnillo (LON: FRES ), Glencore (LON: GLEN ) (JO: GLNJ ) and Rio Tinto (LON: RIO ) fell 2.9%, 1.3% and 1.0%, respectively. Retailers, Ocado Group (LON: OCDO ), J Sainsbury (OTC: JSAIY ) and B&M European Value Retail S.A. (LON: BMEB ) eased 2.3%, 2.0% and 1.9%, respectively.
  • Aerospace company, BAE Systems (LON: BAES ) gained 1.1%, after the company won a GBP3.95bn contract for AUKUS nuclear submarines.
  • The FTSE 100 index declined 1.3% to close at 7,510.72.

US MARKET REVIEW

  • US markets ended mostly higher yesterday, after the US government averted a possible shutdown.
  • Pharmaceutical companies, Pfizer (NYSE: PFE ) and UnitedHealth Group (NYSE: UNH ) advanced 2.3% and 2.1%, respectively.
  • Technology companies, Meta Platforms (NASDAQ: META ), Microsoft (NASDAQ: MSFT ), Apple (NASDAQ: AAPL ) and Cisco Systems (NASDAQ: CSCO ) gained 2.2%, 1.9%, 1.5% and 1.2%, respectively.
  • On the contrary, energy companies, Devon Energy Corporation (NYSE: DVN ), Exxon Mobil Corporation (NYSE: XOM ) and Chevron Corporation (NYSE: CVX ) dropped 4.3%, 1.7% and 1.2%, respectively.
  • The S&P 500 index marginally rose to settle at 4,288.39, while the DJIA index declined 0.2% to close at 33,433.35. The NASDAQ index climbed 0.7% to end the trading session at 13,307.77.

ASIA MARKET REVIEW

  • Asian markets are trading lower this morning, on rate hike fears.
  • In Japan, automobile company, Yamaha Motor (TYO: 7272 ) has declined 3.8%.
  • On the flipside, media and commerce company, LY Group has advanced 1.3%.
  • In Hong Kong, pharmaceutical company, CSPC Pharmaceutical (HK: 1093 ) has shed 6.6%.
  • Consumer electronics company, Lenovo Group (HK: 0992 ) has eased 1.1%. In South Korea, markets are closed today on account of a public holiday.
  • On Friday, the Kospi index rose 0.1% to close at 2,465.07.
  • Today, the Nikkei 225 index is trading 1.2% lower at 31,365.92.
  • The Hang Seng index is trading 3.1% lower at 17,249.48.

COMMODITIES

  • At 05:30 SAST today, Brent prices fell 1.1% to trade at $89.73/bl.
  • Yesterday, Brent prices fell 4.8% to settle at $90.71/bl, amid concerns over rising crude supplies and fears that higher interest rates would dampen demand.
  • At 05:30 SAST today, gold prices declined 0.4% to trade at $1,817.51/oz. Yesterday, gold declined 1.3% to close at $1,825.04/oz, as a stronger dollar and rise in the US Treasury yields dented demand for the safe haven yellow metal.
  • Yesterday, copper declined 1.6% to close at $8,100.40/mt. Aluminium closed 0.4% higher at $2,327.50/mt.

CURRENCIES

  • Yesterday, the South African rand weakened against the US dollar. In the US, the manufacturing PMI rose more than expected in September. Moreover, the ISM manufacturing PMI rose to a 10-month high in September.
  • The yield on benchmark government bonds rose yesterday. The yield on the 2030 bond advanced to 10.90% while that for the longer-dated 2040 issue rose to 13.00%.
  • At 05:30 SAST, the US dollar is trading 0.2% higher against the South African rand at R19.2636, while the euro is trading 0.1% higher at R20.162. At 05:30 SAST, the British pound has gained 0.1% against the South African rand to trade at R23.2633.
  • Yesterday, the euro mostly advanced against most of the major currencies. In Germany, the HCOB manufacturing PMI rose less than expected in September. In the eurozone, the unemployment rate dropped in August. Moreover, the HCOB manufacturing PMI contracted in September amid drop in new orders and a rise in job losses. In the UK, the S&P Global manufacturing PMI rose in September.
  • At 05:30 SAST, the euro slipped 0.1% against the US dollar to trade at $1.0467, while it has marginally weakened against the British pound to trade at GBP0.8667.

ECONOMIC UPDATES

  • In the UK, the seasonally adjusted Nationwide housing prices recorded a flat reading on a MoM basis in September, compared to market expectations for a drop of 0.4%. The Nationwide housing price index had declined 0.8% in the previous month.
  • In the UK, the BRC shop price index rose 6.2% on a YoY basis in August, compared to a rise of 6.9% recorded in the previous month.
  • In the UK, the final manufacturing PMI recorded a rise to a level of 44.30 in September, more than market expectations for a rise to a level of 44.20. The manufacturing PMI had recorded a level of 43.00 in the prior month.
  • In Switzerland, the SVME PMI advanced to a level of 44.90 in September, more than market expectations for a rise to a level of 40.50. The SVME PMI had recorded a level of 39.90 recorded in the previous month.
  • In Germany, the HCOB manufacturing PMI advanced to a level of 39.60 in September, less than market expectations for a rise to a level of 39.80. The manufacturing PMI had recorded a level of 39.10 recorded in the previous month.
  • In the eurozone, the unemployment rate dropped 6.4% in August, in line with market expectations and compared to a revised 6.5% recorded in the previous month.
  • In the eurozone, the HCOB manufacturing PMI declined to a level of 43.40 in September, in line with market expectations and compared to a level of 43.50 recorded in the previous month.
  • In the US, the S&P Global manufacturing PMI climbed to a level of 49.80 in September, more than market expectations for a rise to a level of 48.90. The S&P Global manufacturing PMI had recorded a level of 47.90 in the prior month.
  • In the US, the ISM manufacturing PMI advanced to a level of 49.00 in September, more than market expectations and compared to a level of 47.60 recorded in the prior month.
  • In Canada, the manufacturing PMI registered a drop to a level of 47.50 in September, compared to a level of 48.00 recorded in the prior month.
  • In Australia, building permits rose 7.0% on a MoM basis in August, more than market expectations for a rise of 2.5%. Building permits had recorded a fall of 8.1% in the prior month.
  • The Reserve Bank of Australia kept its interest rate steady at 4.1%, in line with market expectations.

CORPORATE UPDATES

SOUTH AFRICA

  • Pick ‘n Pay Stores Limited (JO: PIKJ ): The retail company, in its trading update for the 26 weeks ended 27 August 2023, revealed that group sales increased 5.4% as compared with the previous year. South Africa sales growth for the period was 5.1% (1.8% like-for-like), while the Group’s Rest of Africa segment sales increased 14.4%. Moreover, clothing sales in stand-alone stores grew 13.8%, while Group liquor sales for the period grew 9.6%. Online sales growth for the period grew 76.3%, driven primarily by growth in its on-demand platforms Pick n Pay asap! and Mr D. Furthermore, the company announced that Pieter Boone would step down from his position as Chief Executive Officer (CEO), effective 30 September. As a result, Sean Summers would replace Pieter with immediate effect.
  • AECI Limited (JO: AFEJ ): The chemical company announced the appointment of Ms Rochelle Gabriels as the Group Chief Financial Officer (CFO) and Group Board Executive Director, effective 29 September 2023.
  • Oil steady after losses as focus returns to tight supplies and US avoids shutdown: Oil prices held steady after suffering losses at the end of last week, as investors’ focus returned to a tight global supply outlook while a last-minute deal that avoided a US government shutdown restored some risk appetite.

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