Market Review, Commodities, Currencies, Economic & Corporate Update - 05.12.23

  • Market Overview

SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the green yesterday, as investors await the US jobs report due later this week.
  • Retailers, Pick ‘n Pay Stores (JO: PIKJ ), Clicks Group (JO: CLSJ ), Mr Price Group (JO: MRPJ ) and Shoprite Holdings (JO: SHPJ ) advanced 5.2%, 3.3%, 2.9% and 2.6%, respectively.
  • Property developers, Emira Property Fund (JO: EMIJ ), Equites Property Fund (JO: EQUJ ), Shaftesbury Capital and Growthpoint Properties (JO: GRTJ ) gained 4.0%, 3.7%, 1.5% and 1.4%, respectively.
  • Food companies, Tiger Brands (JO: TBSJ ) and Famous Brands (JO: FBRJ ) rose 2.5% and 1.5%, respectively.
  • Pharmaceutical companies, Aspen Pharmacare (JO: APNJ ) and Life Healthcare (JO: LHCJ ) added 2.0% and 1.5%, respectively.
  • On the flipside, gold miners, Gold Fields (JO: GFIJ ) and Anglo Gold Ashanti (JO: ANGJ ) dropped 4.0% and 2.1%, respectively.
  • The JSE All Share index advanced 0.3% to close at 75,941.06.

UK MARKET REVIEW

  • The UK market finished weaker on yesterday, weighed down by losses in mining and energy sector stocks.
  • Miners, Glencore (JO: GLNJ ), Rio Tinto (LON: RIO ) and Antofagasta (LON: ANTO ) dropped 3.1%, 2.7% and 2.6%, respectively, tracking weaker copper prices as well as concerns over Chinese demand.
  • Energy companies, BP (LON: BP ) and Shell (LON: RDSa ) declined 1.4% and 1.2%, respectively, amid drop in oil prices.
  • On the other hand, retailers, JD Sports Fashion (LON: JD ), B&M European Value Retail SA (LON: BMEB ) and Next (LON: NXT ) advanced 2.8%, 1.6% and 0.7%, respectively.
  • Banking firms, Lloyds Banking Group (LON: LLOY ) and NatWest Group (LON: NWG ) gained 1.4% and 1.2%, respectively.
  • The FTSE 100 index declined 0.2% to close at 7,512.96.

US MARKET REVIEW

  • US markets ended lower yesterday, amid drop in the US Treasury yields and ahead of US jobs data due this week.
  • Airlines company, Alaska Air Group (NYSE: ALK ) plunged 14.2%, after the company acquired Hawaiian Airlines for a consideration of $1.90bn.
  • Technology companies, Salesforce (NYSE: CRM ), Intel (NASDAQ: INTC ), Microsoft (NASDAQ: MSFT ) and Apple (NASDAQ: AAPL ) dropped 3.6%, 3.2%, 1.4% and 1.0%, respectively.
  • On the contrary, cruise-line companies, Norwegian Cruise Line Holdings (NYSE: NCLH ) and Carnival Corporation (NYSE: CCL ) jumped 6.6% and 3.7%, respectively.
  • Ride-hailing app company, Uber Technologies (NYSE: UBER ) advanced 2.2%, after the company announced that it would join the S&P 500 Index with effect from 18 December 2023.
  • The S&P 500 index fell 0.5% to settle at 4,569.78, while the DJIA index declined 0.1% to close at 36,204.44.
  • The NASDAQ index eased 0.8% to end the trading session at 14,185.49.

ASIA MARKET REVIEW

  • Asian markets are trading lower this morning, tracking overnight losses on Wall Street.
  • In Japan, electronics company, Renesas Electronics (TYO: 6723 ) has declined 4.7%.
  • On the flipside, pharmaceutical company, Sumitomo Pharma (TYO: 4506 ) has gained 1.3%.
  • In Hong Kong, consumer electronics company, Lenovo Group (HK: 0992 ) has dropped 6.7%.
  • On the other hand, gaming and entertainment company, Galaxy Entertainment (HK: 0027 ) has added 0.7%.
  • In South Korea, chemicals company, Hannong Chemicals (KS: 011500 ) has shed 6.6%.
  • On the contrary, ceramics company, Union Materials (KS: 047400 ) has jumped 12.5%.
  • The Nikkei 225 index is trading 1.4% lower at 32,782.14.
  • The Hang Seng index is trading 1.7% lower at 16,358.66, while the Kospi index is trading 0.3% lower at 2,507.62.

COMMODITIES

  • At 05:30 SAST today, Brent prices marginally fell to trade at $78.02/bl.
  • Yesterday, Brent prices fell 1.1% to settle at $78.03/bl, on demand concerns as well as continued uncertainty surrounding OPEC+ supply cuts.
  • At 05:30 SAST today, gold prices advanced 0.4% to trade at $2,037.69/oz. Yesterday, gold declined 2.0% to close at $2,029.74/oz, as a stronger dollar dented demand for the safe haven yellow metal.
  • Yesterday, copper declined 0.5% to close at $8,416.15/mt. Aluminium closed marginally lower at $2,201.65/mt.

CURRENCIES

  • Yesterday, the South African rand weakened against the US dollar. In the US, factory orders declined more than expected in October, amid weakening demand for durable goods and transportation equipment.
  • The yield on benchmark government bonds fell yesterday. The yield on the 2030 bond declined to 9.96% while that for the longer-dated 2040 issue fell to 12.18%.
  • At 05:30 SAST, the US dollar is trading 0.1% higher against the South African rand at R18.8277, while the euro is trading 0.1% higher at R20.3927. At 05:30 SAST, the British pound has gained 0.1% against the South African rand to trade at R23.767.
  • Yesterday, the euro mostly advanced against most of the major currencies. In the eurozone, the Sentix Investor Confidence Index rose for a second consecutive month in December. In the UK, the BRC like-for-like retail sales rose less than expected in November.
  • At 05:30 SAST, the euro marginally advanced against the US dollar to trade at $1.0841, while it has marginally gained against the British pound to trade at GBP0.858.

ECONOMIC UPDATES

  • In the UK, the BRC like-for-like retail sales unexpectedly rose 2.6% on a YoY basis in November, compared to a similar rise recorded in the prior month.
  • In Switzerland, the consumer price index (CPI) dropped 0.2% on a MoM basis in November, compared to a rise of 0.1% recorded in the previous month.
  • In Germany, seasonally adjusted trade surplus widened to EUR17.80bn in October, compared to a revised surplus of EUR16.70bn recorded in the prior month.
  • In the eurozone, the Sentix Investor Confidence Index rose to a level of -16.80 in December, less than market expectations for a rise to a level of -14.40. The Sentix Investor Confidence Index had recorded a level of -18.60 in the previous month.
  • In the US, factory orders dropped 3.6% on a MoM basis in October, more than market expectations for a drop of 2.6%. Factory order had advanced a revised 2.3% in the previous month.
  • In Japan, the CPI rose 2.6% on a YoY basis in November, compared to a rise of 3.3% recorded in the previous month.
  • In Japan, the Jibun Bank services PMI unexpectedly declined to a level of 50.80 in November, compared to a level of 51.60 recorded in the previous month.
  • In China, the Caixin services PMI rose to a level of 51.50 in November, more than market expectations for a rise to a level of 50.80. The Caixin services PMI had recorded a level of 50.40 in the prior month.
  • In Australia, the Judo Bank services PMI dropped to a level of 46.00 in November, more than market expectations and compared to a level of 47.90 recorded in the previous month.
  • The Reserve Bank of Australia (RBA) kept its key interest rate unchanged at 4.35%, in line with market expectations.

CORPORATE UPDATES

SOUTH AFRICA

  • Advtech Limited (JO: ADHJ ): The recruitment company announced the appointment of Mr Geoff Whyte as Group Chief Executive Officer (CEO) and Executive Director, with effect from 1 March 2024, replacing Mr Roy Douglas.
  • Alexander Forbes Group Holdings Limited (JO: AFHJ ): The financial services company, in its 1H23 results, reported that its fee and commission revenue advanced 14.2% from the same period of the preceding year to R2.48bn. Its diluted EPS stood at 26.50c, compared with 13.20c recorded in the corresponding period of the previous year.
  • Nampak Limited (JO: NPKJ ): The packaging company, in its FY23 results, indicated that its revenue fell to R16.63bn from R16.94bn posted in the previous year. Its diluted loss per share stood at R1,172.96 compared to R48.80 recorded in the previous year.
  • Capital Appreciation (JO: CTAJ ) expects strong demand for point of sales machines: Fintech group Capital Appreciation (Capprec) anticipates that its business of selling point-of-sale (POS) devices and card machines will continue to expand for the next three to five years, helped by the ongoing growth of card payments in SA.
  • Capitec (JO: CPIJ ) goes it alone after terminating life insurance deal with Sanlam (JO: SLMJ ): Financial services group Sanlam and Capitec have terminated their funeral product co-operation agreement as the Stellenbosch-based lender’s fledgling insurance business takes on a life of its own through the imminent launch of Capitec Life.

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