Market Review, Commodities, Currencies, Economic & Corporate Update - 04.12.23

  • Market Overview

SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the green on Friday, boosted by gains in mining sector stocks.
  • Diversified miners, Anglo American (JO: AGLJ ), Kumba Iron Ore (JO: KIOJ ) and African Rainbow Minerals (JO: ARIJ ) advanced 5.7%, 3.1% and 1.8%, respectively.
  • Property Developers, Emira Property Fund (JO: EMIJ ) and Growthpoint Properties (JO: GRTJ ) gained 2.9% and 2.8%, respectively.
  • Gold miners, Gold Fields (JO: GFIJ ) and Harmony Gold Mining (JO: HARJ ) rose 2.4% and 1.3%, respectively.
  • On the flipside, platinum miners, Anglo American Platinum (JO: AMSJ ), Northam Platinum (JO: NPHJ ) and Impala Platinum (JO: IMPJ ) dropped 5.0%, 4.9% and 3.2%, respectively.
  • Retailers, Pick ‘n Pay Stores (JO: PIKJ ), SPAR Group (JO: SPPJ ) and Shoprite Holdings (JO: SHPJ ) declined 4.6%, 2.2% and 1.6%, respectively.
  • The JSE All Share index advanced 0.2% to close at 75,705.85.

UK MARKET REVIEW

  • The UK market finished firmer on Friday, buoyed by gains in mining sector stocks.
  • Miners, Antofagasta (LON: ANTO ), Rio Tinto (LON: RIO ), Glencore (LON: GLEN ) (JO: GLNJ ) and Fresnillo (LON: FRES ) jumped 6.2%, 3.7%, 3.6% and 1.8%, respectively.
  • Travel and leisure companies, InterContinental Hotels Group (LON: IHG ), Whitbread (LON: WTB ) and International Consolidated Airlines Group (LON: ICAG ) climbed 3.1%, 2.9% and 2.2%, respectively.
  • Paper and packaging companies, Mondi (LON: MNDI ), Smurfit Kappa Group (LON: SKG ) and DS Smith (LON: SMDS ) advanced 2.6%, 2.4% and 2.0%, respectively.
  • Retailers, Burberry Group (LON: BRBY ), JD Sports Fashion (LON: JD ) and Next Group (LON: NXT ) gained 2.4%, 2.1% and 1.4%, respectively.
  • Banking firms, Lloyds Banking Group (LON: LLOY ), NatWest Group (LON: NWG ) and Barclays (LON: BARC ) rose 2.4%, 1.6% and 0.9%, respectively.
  • The FTSE 100 index advanced 1.0% to close at 7,529.35.

US MARKET REVIEW

  • US markets ended higher on Friday, amid increasing optimism that the US Federal Reserve (Fed) would pause its rate hikes.
  • Beauty store chain, Ulta Beauty (NASDAQ: ULTA ) surged 10.8%, after the company reported upbeat results in 3Q23.
  • Financial services companies, Goldman Sachs Group (NYSE: GS ), American Express (NYSE: AXP ) and JPMorgan Chase (NYSE: JPM ) advanced 2.0%, 1.8% and 0.5%, respectively.
  • On the contrary, pharmaceutical company, Pfizer (NYSE: PFE ) dropped 5.1%, after the company halted Phase 3 trial of a twice-daily formulation of a weight-loss drug after patients in an earlier study had a lot of side effects.
  • The S&P 500 index rose 0.6% to settle at 4,594.63, while the DJIA index advanced 0.8% to close at 36,245.50.
  • The NASDAQ index climbed 0.6% to end the trading session at 14,305.03.

ASIA MARKET REVIEW

  • Asian markets are trading mostly lower this morning, ahead of major economic data.
  • In Japan, automobile company, Nissan Motor (TYO: 7201 ) Corporation has declined 3.3%.
  • On the flipside, transportation company, Kawasaki Kisen Kaisha (TYO: 9107 ) has advanced 3.0%.
  • In Hong Kong, internet technology company, NetEase (NASDAQ: NTES ) has shed 3.9%.
  • On the other hand, consumer electronics company, Lenovo Group (HK: 0992 ) has gained 3.2%.
  • In South Korea, chemical company, KG Chemical (KS: 001390 ) has surged 13.3%.
  • On the contrary, apparel company, TBH Global (KS: 084870 ) has dropped 4.7%.
  • The Nikkei 225 index is trading 0.6% lower at 33,216.05.
  • The Hang Seng index is trading 0.4% lower at 16,760.33, while the Kospi index is trading 0.4% higher at 2,514.04.

COMMODITIES

  • At 05:30 SAST today, Brent prices fell 0.7% to trade at $78.35/bl.
  • On Friday, Brent prices fell 4.8% to settle at $78.88/bl, amid concerns surrounding the OPEC+ supply cuts as well as slowdown in global manufacturing activity. Additionally, the Baker Hughes reported that the US oil rigs count rose by 5 to 505 in the week ended 1 December 2023.
  • At 05:30 SAST today, gold prices advanced 0.8% to trade at $2,086.55/oz. On Friday, gold gained 1.7% to close at $2,070.90/oz, as a weaker dollar boosted demand for the safe haven yellow metal.
  • On Friday, copper rose 1.5% to close at $8455.65/mt. Aluminium closed 0.3% higher at $ 2,201.65 /mt.

CURRENCIES

  • On Friday, the South African rand strengthened against the US dollar. In the US, the S&P Global manufacturing PMI dropped in November. Moreover, the ISM manufacturing PMI remained unchanged in November.
  • The yield on benchmark government bonds were mixed on Friday. The yield on 2030 bond remained unchanged at 9.98% while that for the longer-dated 2040 issue rose to 12.19%.
  • At 05:30 SAST, the US dollar is trading 0.1% lower against the South African rand at R18.6371, while the euro is trading marginally higher at R20.2863. At 05:30 SAST, the British pound has gained 0.1% against the South African rand to trade at R23.7327.
  • On Friday, the euro declined against most of the major currencies. In Germany, the HCOB manufacturing PMI rose more than expected in November. In the eurozone, the HCOB manufacturing PMI rose more than expected in November. In the UK, the S&P Global manufacturing PMI rose in November. Moreover, the Nationwide housing prices rose for a third consecutive month in November.
  • At 05:30 SAST, the euro marginally advanced against the US dollar to trade at $1.0886, while it has gained 0.2% against the British pound to trade at GBP0.8584.

ECONOMIC UPDATES

  • In the UK, Nationwide housing prices index unexpectedly rose 0.2% on a MoM basis in November, compared to a rise of 0.9% recorded in the previous month.
  • In the UK, the S&P Global manufacturing PMI unexpectedly rose to a level of 47.20 in November, compared to a level of 44.80 recorded in the prior month.
  • In Switzerland, gross domestic product (GDP) rose 0.3% on a QoQ basis in 3Q23, more than market expectations for a rise of 0.1%. GDP had declined by a revised 0.1% in the previous quarter.
  • In Switzerland, the SVME PMI rose to a level of 42.10 in November, more than market expectations for a rise to a level of 42.00. The SVME PMI had recorded a level of 40.60 in the prior month.
  • In Germany, the HCOB manufacturing PMI rose to a level of 42.60 in November, more than market expectations for a rise to a level of 42.30. The HCOB manufacturing PMI had recorded a level of 40.80 in the prior month.
  • In the eurozone, the HCOB manufacturing PMI rose to a level of 44.20 in November, more than market expectations for a rise to a level of 43.80. The HCOB manufacturing PMI had recorded a level of 43.10 in the prior month.
  • In the US, the S&P manufacturing PMI fell to a level of 49.40 in November, in line with market expectations. The S&P manufacturing PMI had recorded a level of 50.00 in the previous month.
  • In the US, the ISM manufacturing PMI remained unchanged at 46.70 in November, compared to market expectations for a rise to a level of 47.60.
  • In Canada, the S&P Global manufacturing PMI dropped to a level of 47.70 in November, compared to a level of 48.60 recorded in the prior month.
  • In Canada, the unemployment rate rose to 5.8% in November, compared to 5.7% recorded in the previous month.

CORPORATE UPDATES

SOUTH AFRICA

  • Tiger Brands Limited (JO: TBSJ ): The food company, in its FY23 results, indicated that its total revenue rose to R37.39bn from R34.03bn posted in the previous year. Its diluted EPS decreased 2.2% from the prior year to R17.00. Additionally, the company announced the appointment of Mr Thushen Govender as Chief Financial Officer (CFO) and Executive Director, with effect from 1 January 2024.
  • Fortress Real Estate Investments Limited: The real estate investment trust company, in its trading and operational updated for the period ended 30 June 2023, revealed that it continues to experience strong demand for well-located, high-quality logistics space and this has translated into a sustained record low logistics vacancy of 0.5% by rental. Moreover, its SA retail portfolio has performed well, despite a deteriorating consumer environment, achieving 7.2% like-for-like tenant turnover growth and an improved vacancy, by rental, of 1.3%. Meanwhile, vacancies, based on rental, in its SA logistics portfolio remained flat at 0.5% at 31 October 2023. Also, total vacancies, based on rental, remained flat at 3.3% from 30 June 2023 to 31 October 2023.
  • OPEC+ cuts fail to lift oil prices: Oil prices extended losses and looked set for a sixth straight week of declines, as voluntary oil output cuts agreed by OPEC+ producers fell short of market expectations.

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