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Market Review, Commodities, Currencies, Economic & Corporate Update - 07.06.24

Published 2024/06/07, 09:53
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SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the green yesterday, as investors evaluated political developments in the SA. Technology companies, Altron (JO:AELJ) and Datatec (JO:DTCJ) gained 5.9% and 1.9%, respectively.
  • Gold miners, Gold Fields (JO:GFIJ), AngloGold Ashanti (JO:ANGJ), Harmony Gold Mining Co. (JO:HARJ), and DRD Gold (JO:DRDJ) advanced 2.6%, 1.6%, 1.1% and 0.8%, respectively.
  • Diversified miners, Pan African Resources (JO:PANJ), Kumba Iron Ore (JO:KIOJ), South32 (JO:S32J), Glencore (JO:GLNJ) and Anglo American surged 2.3%, 2.2%, 1.3%, 1.2% and 1.1%, respectively.
  • On the flipside, retailers, Cashbuild (JO:CSBJ), Spar Group (JO:SPPJ), Pick n Pay Stores (JO:PIKJ), Woolworths Holdings (JO:WHLJ) and Mr Price Group (JO:MRPJ) dropped 3.4%, 3.1%, 2.5%, 1.7% and 0.7%, respectively.
  • The JSE All Share index closed 0.4% higher at 77,123.64.

UK MARKET REVIEW

  • The UK market closed higher yesterday, driven by gains in the mining sector stocks and following the European Central Bank’s (ECB) first rate cut since 2019.
  • Miners, Antofagasta (LON:ANTO), Fresnillo (LON:FRES), Rio Tinto (LON:RIO), Anglo American (LON:AAL) and Glencore (LON:GLEN) jumped 2.9%, 2.7%, 1.9%, 1.6% and 1.5%, respectively due to higher commodity prices.
  • Beverages companies, Diageo (LON:DGE) and Coca-Cola HBC AG (LON:CCH) advanced 2.1% and 0.8%, respectively.
  • Banks, NatWest (LON:NWG), Barclays (LON:BARC), Lloyds Banking Group (LON:LLOY), HSBC Holdings (LON:HSBA) and Standard Chartered (LON:STAN) gained 2.1%, 1.7%, 1.6%, 0.9% and 0.5%, respectively.
  • Energy companies, Shell (LON:RDSa) and BP (LON:BP) added 0.7% and 0.6%, respectively.
  • The FTSE 100 index added 0.5% to close at 8,285.34.

US MARKET REVIEW

  • US markets closed mostly in the red yesterday, ahead of key US jobs data.
  • Discount store company, Five Below (NASDAQ:FIVE) plunged 10.6%, after reporting weaker results in 1Q24 and further lowering its annual net-sales forecast.
  • Technology companies, Intel (NASDAQ:INTC) and Apple (NASDAQ:AAPL) fell 1.2% and 0.7%, respectively.
  • Financial services companies, Goldman Sachs Group (NYSE:GS) and American Express (NYSE:AXP) shed 0.8% and 0.6%, respectively.
  • On the other hand, athletic apparel company, Lululemon Athletica (NASDAQ:LULU) advanced 4.8%, after reporting strong in 1Q24.
  • The S&P 500 index marginally eased to settle at 5,352.96, while the DJIA index added 0.2% to close at 38,886.17.
  • The NASDAQ index fell 0.1% to end the trading session at 17,173.12.

ASIA MARKET REVIEW

  • Asian markets are trading mostly lower this morning, ahead of US Nonfarm payrolls data.
  • In Japan, electric motors company, Nidec Corporation (TYO:6594) has dropped 1.8%.
  • On the flipside, e-commerce company, Mercari (TYO:4385) has gained 3.6%.
  • In Hong Kong, dolar glass manufaturing company, Xinyi Solar Holdings (HK:0968) has fell 2.6%.
  • On the other hand, pharmaceutical company, CSPC Pharmaceutical Group (HK:1093) has added 0.9%.
  • In South Korea, solar cells company, HD Hyundai Energy Solutions Co. (KS:322000), has shed 4.7%.
  • On the contrary, seafood products company, CJ Seafood Corporation (KS:011150) has jumped 12.8%.
  • The Nikkei 225 index is trading 0.1% lower at 38,661.04.
  • The Hang Seng index has declined 0.5% to trade at 18,386.53, while the Kospi index is trading 0.9% higher at 2,714.09.

COMMODITIES

  • At 05:30 SAST today, Brent prices slightly increased to trade at $79.88/bl, following reassurances from OPEC+ members Saudi Arabia and Russia that the latest oil output agreement could be adjusted based on market conditions.
  • Yesterday, Brent prices rose 1.9% to settle at $79.87/bl, after the ECB's interest rate cut boosted hopes for similar actions by the US Fed.
  • At 05:30 SAST today, gold prices marginally advanced to trade at $2,377.88/oz. Yesterday, gold gained 0.9% to close at $2,376.90/oz, as weaker-than-expected US jobs data raised expectations for interest rate cut later this year.
  • Yesterday, copper rose 1.6% to close at $9,927.50/mt. Aluminium closed 0.6% higher at $2,647.65/mt.

CURRENCIES

  • Yesterday, the South African rand weakened against the US dollar. In the US, the number of people filing for initial jobless claims increased in the week ended 31 May 2024.
  • The yield on benchmark government bonds rose yesterday. The yield on the 2030 bond rose to 10.68%, while that for the longer-dated 2040 issue advanced to 12.99%.
  • At 05:30 SAST, the US dollar is trading 0.2% lower against the South African rand at R18.9403, while the euro is trading 0.1% lower at R20.6371. At 05:30 SAST, the British pound has declined 0.2% against the South African rand to trade at R24.2218.
  • Yesterday, the euro mostly declined against most of the major currencies. In the eurozone, retail sales fell more than expected in May. Moreover, the ECB lowered its key interest rates for the first time in five years as anticipated.
  • At 05:30 SAST, the euro advanced 0.1% against the US dollar to trade at $1.0897, while it has gained 0.1% against the British pound to trade at GBP0.8521.

ECONOMIC UPDATES

  • In South Africa, current account deficit Africa narrowed to R84.60bn in 1Q24, compared to a revised deficit of R162.90bn in the prior quarter.
  • In Switzerland, seasonally adjusted unemployment rate remained unchanged at 2.3% in May, at par with market expectations.
  • In the UK, the construction PMI unexpectedly rose to a level of 54.70 in May, compared to a level of 53.00 recorded in the previous month.
  • In Italy, seasonally adjusted retail sales fell 0.1% on a MoM basis in April. In the previous month, retail sales had recorded a revised drop of 0.2%.
  • In the eurozone, seasonally adjusted retail sales registered a drop of 0.5% on a MoM basis in April, compared to a revised rise of 0.7% recorded in the previous month.
  • The European Central Bank (ECB) cut its interest rate by 25 basis points to 4.25%, in line with market expectations.
  • In the US, the initial jobless claims unexpectedly climbed to a level of 229.00K in the week ended 31 May 2024, compared to a revised reading of 221.00K in prior week.
  • In the US, goods trade deficit widened to $99.20bn in April, compared to a deficit of $92.50bn in the prior month.
  • In Canada, seasonally adjusted Ivey PMI unexpectedly declined to a level of 59.10 in May, compared to a level of 65.70 recorded in the previous month.

CORPORATE UPDATES

SOUTH AFRICA

  • MultiChoice Group Limited (JO:MCGJ): The entertainment company, in its FY24 trading update, revealed that it expects loss per share to be between 106.00c and 139.00c, as compared with 815.00c recorded in the prior year. Also, it expects headline loss per share to be between 409.00c and 421.00c, as compared with 301.00c recorded in the prior year. The group expects losses to increase due to the negative impact of a weak macro-economic and consumer environment, increased investment in Showmax and the impact of the sharp depreciation in the Nigerian naira (NGN) against the US dollar (USD). The group’s expected loss per share has also been impacted by a once-off impairment of IT systems of R1.0bn (net of tax and non-controlling interest), due to a re-assessment of business needs in the context of an extremely challenging operating environment.
  • SPAR Group Limited (JO:SPPJ): The retail company, in its trading update for the six months ended 31 March 2024, revealed that it expects its diluted EPS to be between 2.0% to 12.0%, lower as compared with 484.70c recorded in the prior year. Also, it expects HEPS to be between 3.0% to 13.0%, lower as compared with 503.30c recorded in the previous year.

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