Market Review, Commodities, Currencies, Economic & Corporate Update - 06.11.23

  • Market Overview

SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the green on Friday, boosted by gains in mining sector stocks and as upbeat US jobs data boosted investor sentiment.
  • Gold miners, Sibanye-Stillwater, AngloGold Ashanti (JO: ANGJ ) and Gold Fields (JO: GFIJ ) jumped 6.9%, 6.3% and 4.8%, respectively.
  • Diversified miners, Kumba Iron Ore (JO: KIOJ ), Exxaro Resources (JO: EXXJ ) and Anglo American (JO: AGLJ ) advanced 5.7%, 2.5% and 1.8%, respectively.
  • Lenders, Capitec Bank Holdings (JO: CPIJ ), Standard Bank Group (JO: SBKJ ), FirstRand (JO: FSRJ ) and Nedbank Group (JO: NEDJ ) gained 5.6%, 1.8%, 1.3% and 1.2%, respectively.
  • Platinum miners, Impala Platinum (JO: IMPJ ) and Northam Platinum (JO: NPHJ ) rose 4.0% and 2.7%, respectively.
  • Retailers, SPAR Group (JO: SPPJ ), Lewis Group (JO: LEWJ ) and Cie Financiere Richemont S.A. (JO: CFRJ ) added 2.2%, 2.0% and 1.0%, respectively.
  • The JSE All Share index advanced 2.1% to close at 72,856.18.

UK MARKET REVIEW

  • The UK market finished weaker on Friday, led by losses in energy sector stocks.
  • Energy companies, Shell (LON: RDSa ) and BP (LON: BP ) dropped 4.2% and 1.8%, respectively.
  • Travel and leisure companies, InterContinental Hotels Group (LON: IHG ) and Whitbread (LON: WTB ) declined 2.1% and 1.8%, respectively.
  • On the other hand, retailers, Ocado Group (LON: OCDO ), Next (LON: NXT ) and B&M European Value Retail SA (LON: BMEB ) jumped 6.5%, 1.1% and 1.0%, respectively.
  • Telecommunications companies, BT and Vodafone (LON: VOD ) advanced 5.7% and 1.9%, respectively.
  • Banking firms, NatWest Group (LON: NWG ), Barclays (LON: BARC ) and Lloyds Banking Group (LON: LLOY ) gained 2.8%, 2.3% and 1.6%, respectively.
  • Real estate companies, Barratt Developments (LON: BDEV ), Land Securities Group (LON: LAND ) and Berkeley Group (LON: BKGH ) Holdings rose 2.3%, 1.9% and 1.2%, respectively.
  • The FTSE 100 index declined 0.4% to close at 7,417.73.

US MARKET REVIEW

  • US markets ended higher on Friday, amid weaker bond yields and as the US jobs data raised hopes for an end to the US Federal Reserve’s (Fed) rate hike policy.
  • Financial services companies, Goldman Sachs Group (NYSE: GS ), American Express (NYSE: AXP ) and JPMorgan Chase (NYSE: JPM ) advanced 4.4%, 1.3% and 1.1%, respectively.
  • Technology companies, Microsoft (NASDAQ: MSFT ) and Intel (NASDAQ: INTC ) gained 1.3% and 1.2%, respectively.
  • Energy companies, Exxon Mobil Corporation (NYSE: XOM ), Chevron Corporation (NYSE: CVX ) and Diamondback Energy (NASDAQ: FANG ) shed 1.2%, 0.8% and 0.7%, respectively.
  • On the contrary, network security company, Fortinet plunged 12.4%, after the company reported weaker revenue forecast in 4Q23.
  • The S&P 500 index rose 0.9% to settle at 4,358.34, while the DJIA index advanced 0.7% to close at 34,061.32.
  • The NASDAQ index climbed 1.4% to end the trading session at 13,478.28.

ASIA MARKET REVIEW

  • Asian markets are trading higher this morning. In Japan, electronics company, Renesas Electronics (TYO: 6723 ) has jumped 6.5%.
  • On the flipside, transportation company, Kawasaki Kisen Kaisha (TYO: 9107 ) has plunged 12.7%.
  • In Hong Kong, real estate company, Longfor Group Holdings (HK: 0960 ) has advanced 5.5%.
  • On the other hand, mining company, Zijin Mining Group (HK: 2899 ) has eased 0.8%.
  • In South Korea, chemical company, Cosmo Chemical (KS: 005420 ) has surged 17.4%.
  • On the contrary, pharmaceutical company, Dongsung Pharmaceutical (KS: 002210 ) has shed 4.6%.
  • The Nikkei 225 index is trading 2.4% higher at 32,720.52.
  • The Hang Seng index has advanced 1.9 % to trade at 18,000.11, while the Kospi index is trading 3.9% higher at 2,459.49.

COMMODITIES

  • At 05:30 SAST today, Brent prices rose 0.4% to trade at $85.21/bl, after Saudi Arabia and Russia indicated that they would continue with their voluntary oil output cuts until the end of the year.
  • On Friday, Brent prices fell 2.3% to settle at $84.89/bl, amid ease in supply concerns. Meanwhile, Baker Hughes reported that the US oil rigs count fell by 8 to 496 in the week ended 3 November 2023.
  • At 05:30 SAST today, gold prices declined 0.4% to trade at $1,983.99/oz. On Friday, gold gained 0.3% to close at $1,992.27/oz, as a weaker dollar and a drop in the US Treasury yields boosted demand for the precious yellow metal.
  • On Friday, copper rose 0.1% to close at $8,070.25/mt. Aluminium closed 1.0% higher at $2,254.25/mt.

CURRENCIES

  • On Friday, the South African rand strengthened against the US dollar. In the US, the ISM services PMI fell to a five month low in October. Moreover, non-farm payrolls rose less than expected in October. Additionally, the unemployment rate advanced in October.
  • The yield on benchmark government bonds fell on Friday. The yield on the 2030 bond declined to 10.30% while that for the longer-dated 2040 issue fell to 12.38%.
  • At 05:30 SAST, the US dollar is trading 0.1% lower against the South African rand at R18.2492, while the euro is trading 0.1% lower at R19.5867. At 05:30 SAST, the British pound has declined 0.1% against the South African rand to trade at R22.5788.
  • On Friday, the euro mostly advanced against most of the major currencies. In the eurozone, the unemployment rate rose in September, as weaker economic activity damped job creation. In the UK, the S&P Global services PMI declined for a third consecutive month in October, as cost of living pressures, high interest rates and weaker consumer sentiment curbed demand.
  • At 05:30 SAST, the euro marginally advanced against the US dollar to trade at $1.0733, while it has gained 0.1% against the British pound to trade at GBP0.8676.

ECONOMIC UPDATES

  • In the UK, the S&P Global services PMI unexpectedly rose to a level of 49.50 in October, compared to a level of 49.30 recorded in the previous month.
  • In Germany, seasonally adjusted trade surplus narrowed to EUR16.50bn in September, compared to a revised surplus of EUR17.70bn recorded in the previous month.
  • In Italy, the unemployment rate climbed to 7.4% in September, in line with expectations and compared to 7.3% recorded in the previous month.
  • In the eurozone, the unemployment rate rose to 6.5% in September, compared to 6.4% recorded in the previous month.
  • In the US, non-farm payrolls rose by 150.00K in October, less than market expectations for a rise of 180.00K jobs. Non-farm payrolls had recorded a rise of 297.00K in the previous month.
  • In the US, the unemployment rate advanced to 3.9% in October, compared to 3.8% recorded in the previous month.
  • In the US, the S&P Global services PMI rose to a level of 50.60 in October, less than market expectations for a rise to a level of 50.90. The services PMI had recorded a level of 50.10 in the previous month.
  • In the US, the ISM services PMI fell to a level of 51.80 in October, more than market expectations for a drop to a level of 53.00. The ISM services PMI had recorded a level of 53.60 in the previous month.
  • In Canada, the unemployment rate rose to 5.7% in October, more than market expectation and compared to 5.5% recorded in the prior month.
  • In Japan, the Jibun Bank services PMI dropped to a level of 51.60 in October, less than market expectations for a decline to a level of 51.10. The services PMI had recorded a level of 53.80 in the prior month.

CORPORATE UPDATES

SOUTH AFRICA

  • Dis-Chem Pharmacies Limited (JO: DCPJ ): The online retail pharmacy company, in its 1H24 results, announced that revenue from contracts with customers rose to R17.86bn from R16.33bn posted in the corresponding period of the previous year. Its diluted EPS decreased 16.7% from the same period of the prior year to 58.30c.
  • Oil on track for second week of losses: Oil prices were little changed but headed for a second week of losses as supply fears driven by conflict in the Middle East, a key producing region, eased, while the demand outlook at the world’s top crude importer China remains clouded.

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