SOUTH AFRICA MARKET REVIEW
- South African markets closed in the red yesterday, due to heightened global risk aversion and concerns about a potential US recession.
- Platinum miners, Impala Platinum (JO:IMPJ), Northam Platinum (JO:NPHJ) and Anglo American Platinum (JO:AMSJ) dropped 5.8%, 2.7% and 2.4%, respectively.
- Retailers, Cashbuild (JO:CSBJ), SPAR Group (JO:SPPJ) and Shoprite Holdings (JO:SHPJ) declined 4.9%, 2.9% and 1.8%, respectively.
- Gold miners, Sibanye Stillwater (JO:SSWJ), AngloGold Ashanti (JO:ANGJ) and Harmony Gold Mining (JO:HARJ) shed 4.3%, 2.5% and 1.5%, respectively.
- Lenders, Absa Group, Nedbank Group (JO:NEDJ), Capitec Bank Holdings (JO:CPIJ) and FirstRand (JO:FSRJ) decreased 3.8%, 2.8%, 1.8% and 1.6%, respectively.
- The JSE All Share index declined 1.2% to close at 79,577.63.
UK MARKET REVIEW
- The UK market finished weaker yesterday, amid global sell-off on US recession fears.
- Water utilities companies, Severn Trent (LON:SVT) and United Utilities Group (LON:UU) dropped 5.8% and 5.3%, respectively.
- Energy utilities companies, Centrica (LON:CNA), National Grid (LON:NG) and SSE (LON:SSE) declined 4.7%, 3.6% and 2.8%, respectively.
- Energy companies, BP (LON:BP) and Shell (LON:RDSa) shed 3.1% and 3.0%, respectively.
- Miners, Fresnillo (LON:FRES), Glencore (LON:GLEN) and Antofagasta (LON:ANTO) fell 4.0%, 3.3% and 3.0%, respectively, tracking lower gold prices.
- Real estate companies, LondonMetric Property (LON:LMPL), Land Securities Group (LON:LAND), Barratt Developments (LON:BDEV) and Berkeley Group Holdings (LON:BKGH) eased 3.1%, 2.9%, 2.8% and 2.6%, respectively.
- The FTSE 100 index declined 2.0% to close at 8,008.23.
US MARKET REVIEW
- US markets ended lower yesterday, as recession fears and a significant drop in Apple shares (NASDAQ:AAPL) fueled a broad sell-off.
- Technology company, Apple dropped 4.8%, after Berkshire Hathaway (NYSE:BRKa) reduced its stake in the company.
- Peers, Intel Corporation (NASDAQ:INTC), Microsoft Corporation (NASDAQ:MSFT) and International Business Machines (NYSE:IBM) declined 6.4%, 3.3% and 3.1%, respectively.
- Airlines companies, United Airlines Group (NASDAQ:UAL) and Southwest Airlines (NYSE:LUV) shed 5.8% and 5.4%, respectively.
- On the contrary, food company, Kellanova (NYSE:K) surged 16.2%, amid reports that candy maker Mars is in talks for a potential buyout of the company.
- The S&P 500 index fell 3.0% to settle at 5,186.33, while the DJIA index declined 2.6% to close at 38,703.27.
- The NASDAQ index eased 3.4% to end the trading session at 16,200.08.
ASIA MARKET REVIEW
- Asian markets are trading mostly higher this morning, with Nikkei futures pointing to a sharp rebound after a steep drop.
- In Japan, electronic components company, TDK Corporation (TYO:6762) has surged 16.7%.
- On the flipside, financial services company, Sumitomo Mitsui Financial Group (TYO:8316) has declined 2.0%.
- In Hong Kong, automobile company, Li Auto (NASDAQ:LI) has gained 2.2%.
- On the other hand, electrical and electronic products company, Techtronic Industries (HK:0669) shed 2.7%.
- In South Korea, electronics company, Samsung Electronics (KS:005930) has jumped 2.5%.
- On the contrary, cotton, textile and dyed products company, Taihan Textile (KS:001070) has dropped 3.4%.
- The Nikkei 225 index is trading 9.4% higher at 34,416.32.
- The Hang Seng index has eased 0.1% to trade at 16,687.88, while the Kospi index is trading 4.3% higher at 2,546.41.
COMMODITIES
- At 05:30 SAST today, Brent prices rose 1.1% to trade at $77.15/bl.
- Yesterday, Brent prices fell 0.7% to settle at $76.3/bl, amid a broad sell-off in global equity markets.
- At 05:30 SAST today, gold prices advanced 0.1% to trade at $2,410.10/oz. Yesterday, gold declined 1.5% to close at $2,407.65/oz, following a wider market sell-off driven by mounting economic concerns.
- Yesterday, copper declined 4.0% to close at $8,620.35/mt. Aluminium closed 1.2% lower at $2,249.85/mt.
CURRENCIES
- Yesterday, the South African rand weakened against the US dollar. In the US, the S&P Global PMI unexpectedly declined in July. Meanwhile, the ISM services sector activity rebounded from a four-year low in July, amid a bounce back in new orders and the first increase in employment in six months.
- The yield on benchmark government bonds were unchanged yesterday. The yield on the 2030 bond stood at 9.20%, while that for the longer-dated 2040 issue stood at 11.39%.
- At 05:30 SAST, the US dollar is trading 0.1% lower against the South African rand at R18.4914, while the euro is trading 0.1% lower at R20.2565. At 05:30 SAST, the British pound has declined 0.2% against the South African rand to trade at R23.6315.
- Yesterday, the euro advanced against most of the major currencies. In Germany, the HCOB services PMI fell less than expected in July. In the eurozone, the services PMI eased in July, amid drop in demand. Moreover, the Sentix investor confidence index deteriorated in August. Meanwhile, the producer price index (PPI) rose in June. In the UK, the S&P Global services PMI climbed more than expected in July.
- At 05:30 SAST, the euro marginally advanced against the US dollar to trade at $1.0956, while it has slightly weakened against the British pound to trade at GBP0.8571.
ECONOMIC UPDATES
- In the UK, the BRC like-for-like retail sales rose 0.3% on a YoY basis in July, in line with market expectations. The BRC like-for-like retail sales had declined 0.5% in the previous month.
- In the UK, the S&P Global services PMI climbed to a level of 52.50 in July, more than market expectations for a rise to a level of 52.40. The services PMI had recorded a level of 52.10 in the previous month.
- In Spain, the HCOB services PMI dropped more than expected to a level of 53.90 in July, compared to a level of 56.80 recorded in the previous month.
- In Italy, the HCOB services PMI declined to a level of 51.70 in July, more than market expectations and compared to a level of 53.70 recorded in the previous month.
- In France, the HCOB services PMI rose to a level of 50.10 in July, less than market expectations for a rise to a level of 50.70. The services PMI had recorded a level of 49.60 in the previous month.
- In Germany, the HCOB services PMI fell to a level of 52.50 in July, less than market expectations for a drop to a level of 52.00. The services PMI had recorded a level of 53.10 in the previous month.
- In the eurozone, the HCOB services PMI eased to a level of 51.90 in July, in line with market expectations. The services PMI had recorded a level of 52.80 in the prior month.
- In the eurozone, the Sentix investor confidence index dropped to a level of -13.90 in August, compared to a level of -7.30 recorded in the previous month.
- In the eurozone, the producer price index (PPI) rose 0.5% on a MoM basis in June, more than market expectations for a rise of 0.3%. The PPI had declined 0.2% in the prior month.
- In the US, the S&P Global services PMI unexpectedly fell to a level of 55.00 in July, compared to a level of 55.30 recorded in the previous month.
- In the US, the ISM services PMI rose to a level of 51.40 in July, more than market expectations for a rise to a level of 51.00. The services PMI had recorded a level of 48.80 in the previous month.
CORPORATE UPDATES
SOUTH AFRICA
- Telkom SA SOC Limited (JO:TKGJ): The telecommunications company, in its 1Q25 trading update, revealed that group revenue increased 3.9% to R10.91bn, driven by growth in demand for its next generation (NGN) offerings which advanced 7.0% and continued momentum in demand for data traffic and mobile with fixed traffic growing 25.8% and 33.0%, respectively as compared with the prior year. Openserve achieved a 7.1% increase in NGN revenue, with a leading FTTH connectivity rate of 49%. BCX’s IT segment contributed to a 2.4% revenue increase. Swiftnet's revenue grew by 5.2% with progress in Power-as-a-Service. Moreover, the company improved its debt profile through a R750.00mn bond issuance.
- Mpact (JO:MPTJ) bullish after exports surge 36.0%: Mpact has reported a 36.0% surge in exports in the first half of this year, with the group bullish about packaging prospects as Eskom and Transnet begin to get their houses in order.