SOUTH AFRICA MARKET REVIEW
- South African markets closed in the red yesterday, dragged down by losses in retail and mining sector stocks.
- Retailers, SPAR Group (JO:SPPJ), Cie Financiere Richemont S.A. (JO:CFRJ), Foschini Group (JO:TFGJ) and Cashbuild (JO:CSBJ) dropped 6.8%, 6.5%, 2.3% and 2.2%, respectively.
- Platinum miners, Impala Platinum (JO:IMPJ) and Northam Platinum (JO:NPHJ) declined 3.6% and 3.1%, respectively.
- Telecommunications companies, Telkom SA SOC (JO:TKGJ) and Blue Label Telecoms (JO:BLUJ) shed 2.8% and 2.1%, respectively.
- Food companies, Famous Brands (JO:FBRJ), RCL Foods (JO:RCLJ) and RFG Holdings (JO:RFGJ) fell 2.1%, 1.9% and 1.0%, respectively.
- On the flipside, lenders, Standard Bank Group (JO:SBKJ) and FirstRand (JO:FSRJ) advanced 1.4% and 0.9%, respectively.
- The JSE All Share index declined 0.3% to close at 81,915.38.
UK MARKET REVIEW
- The UK market finished weaker yesterday, led by losses in homebuilding sector stocks.
- Real estate companies, Barratt Developments (LON:BDEV), Persimmon (LON:PSN), Taylor Wimpey (LON:TW) and Berkeley Group Holdings (LON:BKGH) dropped 4.6%, 3.3%, 2.6% and 2.2%, respectively.
- Miners, Antofagasta (LON:ANTO), Glencore (LON:GLEN) and Fresnillo (LON:FRES) shed 2.4%, 1.0% and 0.6%, respectively.
- Paper and packaging companies, DS Smith Group (LON:SMDS) and Mondi (LON:MNDI) declined 2.1% and 1.2%, respectively.
- Insurance companies, Prudential (LON:PRU) and Aviva (LON:AV) fell 1.9% and 1.0%, respectively.
- Investment management company, M&G eased 1.5%, after the company reported a drop in its 1H24 profit.
- The FTSE 100 index declined 0.3% to close at 8,269.60.
US MARKET REVIEW
- US markets ended mostly lower yesterday, following weaker labor market data and losses in technology sector stocks.
- Retailer, Dollar Tree (NASDAQ:DLTR) plummeted 22.2%, after the company cut its annual sales and profit forecasts.
- Energy companies, Chevron Corporation (NYSE:CVX), Diamondback Energy Corporation (NASDAQ:FANG) and Exxon Mobil Corporation (NYSE:XOM) dropped 1.8%, 1.7% and 1.2%, respectively.
- On the contrary, semiconductor chip company, Advanced Micro Devices (NASDAQ:AMD) advanced 2.9%, after the company appointed former Nvidia (NASDAQ:NVDA) executive Keith Strier as Senior Vice President of global AI markets.
- The S&P 500 index fell 0.2% to settle at 5,520.07, while the DJIA index advanced 0.1% to close at 40,974.97.
- The NASDAQ index eased 0.3% to end the trading session at 17,084.30.
ASIA MARKET REVIEW
- Asian markets are trading lower this morning.
- In Japan, pharmaceutical company, Chugai Pharmaceutical (TYO:4519) has declined 2.7%.
- On the flipside, chemical company, Mitsubishi Chemical (TYO:4188) Group has advanced 2.4%.
- In Hong Kong, insurance company, AIA Group (HK:1299) has gained 1.9%.
- On the other hand, automobile company, Li Auto (NASDAQ:LI) has eased 1.4%.
- In South Korea, pharmaceutical company, Jeil Pharma Holdings (KS:271980) has jumped 6.5%.
- On the contrary, engineering company, Sambu Engineering & Construction (KS:001470) has dropped 5.5%.
- The Nikkei 225 index is trading 0.4% lower at 36,917.44.
- The Hang Seng index has declined 0.3% to trade at 17,411.01, while the Kospi index is trading 0.2% lower at 2,575.62.
COMMODITIES
- At 05:30 SAST today, Brent prices rose 0.2% to trade at $72.81/bl.
- Yesterday, Brent prices fell 1.4% to settle at $72.7/bl, amid demand concerns. Meanwhile, the American Petroleum Institute (API) reported that crude oil inventories declined by 7.80mn bls in the week ended 30 August 2024.
- At 05:30 SAST today, gold prices advanced 0% to trade at $2,496.82/oz. Yesterday, gold gained 0.1% to close at $2,495.88/oz, as a weaker dollar and a drop in the US Treasury yields boosted demand for the safe haven yellow metal.
- Yesterday, copper declined 0.3% to close at $8,830.25/mt. Aluminium closed 0.4% lower at $2,396.86/mt.
CURRENCIES
- Yesterday, the South African rand strengthened against the US dollar. In South Africa, business confidence improved in 3Q24. Moreover, the S&P Global PMI rose in August. Separately, in the US, job openings dropped to a 3.5 year low in July. Meanwhile, the number of MBA mortgage applications rose in the week ended 30 August 2024.
- The yield on benchmark bonds fell yesterday. The yield on the SA 10-year generic bond declined 10.53%, while that for SA 20-year generic bond fell to 11.18%
- At 05:30 SAST, the US dollar is trading marginally higher against the South African rand at R17.8710, while the euro is trading marginally lower at R19.7959. At 05:30 SAST, the British pound has slightly gained against the South African rand to trade at R23.4961.
- Yesterday, the euro mostly advanced against most of the major currencies. In Germany, the HCOB services PMI fell more than expected in August. In the eurozone, the HCOB services PMI rose in August. In the UK, the S&P Global services PMI expanded at the fastest pace in four months in August, fueled by strong post-election business activity and easing inflation.
- At 05:30 SAST, the euro slipped 0.1% against the US dollar to trade at $1.1077, while it has marginally weakened against the British pound to trade at GBP0.8427.
ECONOMIC UPDATES
- In South Africa, the S&P Global PMI rose as expected to a level of 50.50 in August, compared to a level of 49.30 recorded in the prior month.
- In South Africa, business confidence improved to a level of 38.00 on a QoQ basis in 3Q24, compared to a level of 35.00 recorded in the previous quarter.
- In the UK, the S&P Global services PMI rose to a level of 53.70 in August, more than market expectations and compared to a level of 52.50 in the previous month.
- In Spain, the HCOB services PMI rose to a level of 54.60 in August, more than market expectations for a rise to a level of 54.50. The HCOB services PMI had recorded a level of 53.90 in the previous month.
- In Italy, the HCOB services PMI unexpectedly fell to a level of 51.40 in August, compared to a level of 51.70 in the prior month.
- In France, the HCOB services PMI climbed to a level of 55.00 in August, in line with market expectations and compared to a level of 50.10 in the prior month.
- In Germany, the HCOB services PMI declined more than expected to a level of 51.20 in August, compared to a level of 52.50 in the previous month.
- In the eurozone, the HCOB services PMI advanced to a level of 52.90 in August, less than market expectations for a rise to a level of 53.30. The HCOB services PMI had recorded a level of 51.90 in the previous month.
- In the eurozone, the producer price index (PPI) rose 0.8% on a MoM basis in July, more than market expectations and compared to a revised rise of 0.6% in the prior month.
- In the US, the MBA mortgage applications rose 1.6% in the week ended 30 August 2024, compared to a rise of 0.5% recorded in the previous week.
- In the US, goods and services trade deficit widened to $78.80bn in July, compared to a revised deficit of $73.00bn recorded in the previous month.
- In the US, the JOLTs job openings unexpectedly drop to a level of 7.67mn in July, compared to a revised 7.91mn jobs in the prior month.
- The Bank of Canada (BoC) trimmed its key interest rate by 25 basis points to 4.25, in line with market expectations.
CORPORATE UPDATES
SOUTH AFRICA
- Woolworths Holdings Limited (JO:WHLJ): The retail company, in its FY24 results, reported revenue of R77.34bn, higher as compared with R72.69bn posted in the previous year. Its diluted EPS fell 47.2% from the prior year to 286.20c.
- The Foschini Group Limited (JO:TFGJ): The retail company, in its trading update for the 21 weeks ended 24 August 2024, revealed that the group’s gross margin improved by over 100 basis points despite a 3.5% drop in sales. TFG Africa achieved a record gross profit of R5.90bn. Online sales grew by 7.8%, with significant gains in South Africa. Cash sales now make up 73% of TFG Africa’s sales and 81.2% of total Group sales. TFG London's margin rose by 150 basis points despite a 12.4% sales decline, while TFG Australia saw a 50 basis point margin improvement despite a 3.9% drop in sales. Moreover, the company intends to release its financial results for the six months ending 30 September 2024 on or about 8 November 2024.
- Cashbuild Limited (JO:CSBJ): The retail company, in its FY24 results, reported that revenue advanced 5.1% from the preceding year to R11.19bn. Its diluted EPS stood at 396.40c, compared with 455.60c recorded in the previous year.
- Spar (JO:SPPJ) pays hefty price to exit Poland venture: Spar has offloaded its loss-making operations in Poland to local retailer Specjal for R185.00mn, marking the end of a costly venture that has drained the group’s resources since 2019.