SOUTH AFRICA MARKET REVIEW
- South African markets closed in the red yesterday, following data revealing a decline in gross domestic product (GDP) for 1Q24.
- Gold mining companies, Sibanye Stillwater (JO:SSWJ), Harmony Gold Mining Co. (JO:HARJ), AngloGold Ashanti (JO:ANGJ) and Gold Fields (JO:GFIJ) dropped 7.3%, 4.5%, 3.7% and 2.7%, respectively.
- Platinum miners, Impala Platinum Holdings (JO:IMPJ), Northam Platinum Holdings (JO:NPHJ) and Anglo American Platinum (JO:AMSJ) shed 5.9%, 5.8% and 4.0%, respectively.
- Telecommunications company, MTN Group (JO:MTNJ) and Vodacom Group (JO:VODJ) declined 3.2% and 2.6%, respectively.
- On the flipside, food company, RCL Foods (JO:RCLJ) gained 5.0%, after the company’s shareholders approved the listing and unbundling of Rainbow Chicken.
- The JSE All Share index closed 1.2% lower at 76,832.74.
UK MARKET REVIEW
- The UK market finished weaker yesterday, weighed down by losses in mining sector stocks due to drop in commodity prices.
- Miners, Fresnillo (LON:FRES), Anglo American, Antofagasta (LON:ANTO), Glencore (LON:GLEN) and Rio Tinto (LON:RIO) Plc shed 7.8%, 4.0%, 3.6%, 2.7% and 1.5%, respectively.
- Banks, Standard Chartered (LON:STAN) and NatWest (LON:NWG) declined 5.3% and 1.9%, respectively.
- Energy companies, BP (LON:BP) and Shell (LON:RDSa) dropped 3.8% and 2.1%, respectively.
- Tobacco company, British American Tobacco (LON:BATS) (JO:SNHJ) eased 0.5%, after the company reported a decrease in its first-half underlying revenues and adjusted profits.
- On the contrary, energy utility companies, National Grid (LON:NG), SSE (LON:SSE) and Centrica (LON:CNA) advanced 2.9%, 0.9% and 0.7%, respectively.
- The FTSE 100 index eased 0.4% to close at 8,232.04.
US MARKET REVIEW
- US markets ended mostly in the green yesterday, as a softer-than-expected labor market data reinforced expectations for rate cuts by the US Federal Reserve (Fed).
- Technology companies, Cisco Systems (NASDAQ:CSCO), Nvidia (NASDAQ:NVDA) and Microsoft (NASDAQ:MSFT) advanced 1.7%, 1.3% and 0.6%, respectively.
- On the other hand, media and entertainment company, Paramount Global (NASDAQ:PARA) fell 4.4%, after announcing it was exploring strategic options or a joint venture for its Paramount+ streaming service.
- Energy companies, Exxon Mobil (NYSE:XOM) and Chevron (NYSE:CVX) declined 1.6% and 0.8%, respectively, amid demand concerns.
- The S&P 500 index gained 0.2% to settle at 5,291.34, while the DJIA index added 0.4% to close at 38,711.29.
- The NASDAQ index advanced 0.2% to end the trading session at 16,857.05.
ASIA MARKET REVIEW
- Asian markets are trading mostly higher this morning, on expectations of rate cut.
- In Japan, life insurance company, Dai-ichi Life Holdings (TYO:8750) has declined 4.1%.
- On the flipside, electric utility company, Kansai Electric Power Co. (TYO:9503), has gained 1.9%.
- In Hong Kong, e-commerce company, JD.com (HK:9618) has added 3.0%. On the other hand, automobile company, Zhongsheng Group Holdings (HK:0881) has eased 3.2%.
- In South Korea, coated steel plates manufacturing company, TCC Steel Corporation (KS:002710) has gained 9.6%.
- On the contrary, electronics company, LG Electronics (KS:066570) has eased 0.9%. The Nikkei 225 index is trading 0.8% lower at 38,527.60.
- The Hang Seng index has advanced 0.8% to trade at 18,591.72, while the Kospi index is trading 1.0% higher at 2,689.70.
COMMODITIES
- At 05:30 SAST today, Brent prices increased by 0.1% to trade at $77.58/bl.
- Yesterday, Brent prices fell 1.1% to settle at $77.52/bl, amid concerns over the OPEC+'s plan to increase supply later this year, given the current weak global demand. Moreover, the American Petroleum Institute (API) reported that the US crude oil inventories rose by 4.05mn bls in the week ended 31 May 2024.
- At 05:30 SAST today, gold prices advanced 0.4% to trade at $2,335.28/oz. Yesterday, gold dropped by 1.0% to close at $2,325.76/oz, ahead of the US jobs data for further indications on rate cut policy.
- Yesterday, copper declined 1.6% to close at $9,858.50/mt. Aluminium marginally closed lower at $2,661.32/mt.
CURRENCIES
- Yesterday, the South African rand weakened against the US dollar. In South Africa, the economy contracted in 1Q24 due to decline in production sectors of the economy. In the US job openings fell more than expected in April to its lowest in nearly three years as labor market conditions softened.
- The yield on benchmark government bonds were lower yesterday. The yield on the 2030 bond fell to 10.52%, while that for the longer-dated 2040 issue declined at 12.72%.
- At 05:30 SAST, the US dollar is trading 0.1% lower against the South African rand at R18.6932, while the euro is trading 0.1% lower at R20.3348. At 05:30 SAST, the British pound has declined 0.1% against the South African rand to trade at R23.8811.
- Yesterday, the euro mostly advanced against most of the major currencies. In Germany, the unemployment rate remained stable for a sixth consecutive month in May.
- At 05:30 SAST, the euro marginally slipped against the US dollar to trade at $1.0878, while it has marginally weakened against the British pound to trade at GBP0.8517.
ECONOMIC UPDATES
- In South Africa, annualized gross domestic product (GDP) slid 0.1% on a QoQ basis in 1Q24, compared to a revised rise of 0.3% in the previous quarter.
- In Switzerland, the consumer price index (CPI) climbed 0.3% on a MoM basis in May. The consumer price index had registered a similar rise in the prior month.
- In Germany, seasonally adjusted unemployment rate remained unchanged at 5.9% in May, in line with market expectations.
- In the US, the JOLTs job openings dropped to 8.06mn in April, more than market expectations and compared to a revised 8.36mn jobs recorded in the prior month.
- In Australia, the AIG (NYSE:AIG) construction PMI dropped to a level of -68.10 in May, compared to a reading of -25.60 in the previous month.
- In Australia, the AIG manufacturing PMI declined to a level of -31.10 in May. The AIG manufacturing PMI had recorded a level of -13.90 in the prior month.
- In Australia, the Judo Bank services PMI dropped more than expected to a level of 52.50 in May, compared to a level of 53.60 recorded in the prior month.
- In Japan, the Jibun Bank services PMI climbed more than expected to a level of 53.80 in May, compared to a level of 54.30 recorded in the previous month.
- In China, the Caixin services PMI advanced to a level of 54.00 in May, more than market expectations and compared to a level of 52.50 recorded in the prior month.
CORPORATE UPDATES
SOUTH AFRICA
- Pan African Resources Limited (JO:PANJ): The mining company announced that it has concluded a milestone five-year wage agreement for wage increases and other conditions of service with the National Union of Mineworkers (NUM), the representative union for Category 4 to 8 bargaining unit employees, at its Barberton Mines operations. The agreed increases for the period 1 June 2024 to 30 June 2029 amounts to an average annual increase of approximately 5.3% per annum over the five-year period.
- Oil prices drop more than $1 on shaky demand: Oil prices fell more than $1 on scepticism about an OPEC+ decision to boost supply later this year into a global market where demand has already shown signs of weakness.