South Africa Market Review
- South African markets closed in the red yesterday, led by losses in retail and financial sector stocks.
- Retailers, Cie Financiere Richemont S.A. (JO:CFRJ), Mr Price Group (JO:MRPJ), Clicks Group (JO:CLSJ) and SPAR (JO:SPPJ) group dropped 5.2%, 2.9%, 2.1% and 1.8%, respectively.
- Lenders, Nedbank Group (JO:NEDJ), Capitec Bank Holdings (JO:CPIJ) and FirstRand (JO:FSRJ) declined 3.9%, 2.5% and 1.0%, respectively.
- Diversified miners, Kumba Iron Ore (JO:KIOJ), Exxaro Resources (JO:EXXJ) and Anglo American (JO:AMSJ) fell 2.4%, 1.9% and 1.5%, respectively.
- Pharmaceutical companies, Netcare (JO:NTCJ) and Aspen Pharmacare (JO:APNJ) eased 1.9% and 0.8%, respectively.
- On the flipside, food companies, RFG Holdings (JO:RFGJ) and RCL Foods (JO:RCLJ) advanced 4.2% and 2.5%, respectively.
- The JSE All Share index declined 0.8% to close at 74,411.00.
UK Market Review
- The UK market finished weaker yesterday, as a drop in domestic construction activity dampened investor sentiment.
- Retailers, Burberry Group (LON:BRBY), Ocado Group (LON:OCDO) and JD Sports Fashion (LON:JD) shed 4.7%, 1.3% and 1.2%, respectively.
- Insurance companies, Prudential (LON:PRU) and Legal & General Group (LON:LGEN) declined 2.3% and 1.0%, respectively.
- Homebuilders, Persimmon (LON:PSN) and Berkeley Group (LON:BKGH) dropped 1.3% and 0.6%, respectively.
- Paper and packaging companies, Smurfit Kappa Group (LON:SKG) and DS Smith (LON:SMDS) each fell 1.1%.
- Miners, Fresnillo (LON:FRES) and Glencore (JO:GLNJ) eased 1.0% and 0.6%, respectively.
- On the other hand, energy companies, BP (LON:BP) and Shell (LON:RDSa) added 0.9% and 0.8%, respectively.
- The FTSE 100 index declined 0.2% to close at 7,426.14.
US Market Review
- US markets ended lower yesterday, following a surge in Treasury yields and renewed fears over further interest rate hike.
- Aerospace company, Lockheed Martin Corporation (NYSE:LMT) edged down 4.8%, after the company cut its F-35 jets delivery outlook.
- Technology company, Apple (NASDAQ:AAPL) declined 3.6%, amid reports that China has banned central government officials from using iPhones and other foreign-branded devices at work.
- Financial services companies, American Express (NYSE:AXP) and Goldman Sachs Group (NYSE:GS) eased 1.3% and 0.8%, respectively.
- The S&P 500 index fell 0.7% to settle at 4,465.48, while the DJIA index declined 0.6% to close at 34,443.19.
- The NASDAQ index eased 1.1% to end the trading session at 13,872.47.
Asia Market Review
- Asian markets are trading lower this morning, tracking overnight losses on Wall Street.
- In Japan, mechatronic products company, Advantest Corporation (TYO:6857) has dropped 4.9%.
- On the flipside, paper company, Nippon paper Industries (TYO:3863) has advanced 4.4%.
- In Hong Kong, electronics company, Lenovo Group (HK:0992) has declined 2.3%.
- On the other hand, pharmaceutical and healthcare company, Sinopharm Group (HK:1099) has gained 1.4%.
- In South Korea, automobile company, KR Motors (KS:000040) has plunged 10.8%.
- On the contrary, media and broadcasting company, IHQ (KS:003560) has jumped 10.1%.
- The Nikkei 225 index is trading 0.1% lower at 33,204.82.
- The Hang Seng index has declined 1.1% to trade at 18,252.03, while the Kospi index is trading 0.5% lower at 2,550.72.
Commodities
- At 05:30 SAST today, Brent prices fell 0.3% to trade at $90.37/bl.
- Yesterday, Brent prices rose 0.6% to settle at $90.6/bl, amid drop in crude oil inventories. The American Petroleum Institute (API) reported that the US crude oil inventories declined by 5.52mn bls in the week ended 1 September 2023.
- At 05:30 SAST today, gold prices advanced 0.2% to trade at $1,919.62/oz. Yesterday, gold declined 0.5% to close at $1,916.28/oz, as a stronger greenback and a rise in the US Treasury yields dented demand for the safe haven yellow metal.
- Yesterday, copper declined 0.4% to close at $8,394.50/mt. Aluminium closed marginally lower at $2,193.44/mt.
Currencies
- Yesterday, the South African rand strengthened against the US dollar. In the US, the ISM services PMI unexpectedly rose in August. Moreover, trade deficit widened in July. Meanwhile, the number of MBA mortgage applications declined in the week ended 1 September 2023. Further, the Federal Reserve’s (Fed) Beige Book showed modest economic growth in July and August with stronger consumer spending on tourism.
- The yield on benchmark government bonds were mixed yesterday. The yield on 2030 bond remained unchanged at 10.41%. Further, the yield on the longer-dated 2040 issue rose to 12.60%.
- At 05:30 SAST, the US dollar is trading 0.2% higher against the South African rand at R19.2399, while the euro is trading marginally higher at R20.6015. At 05:30 SAST, the British pound has marginally declined against the South African rand to trade at R24.0069.
- Yesterday, the euro advanced against most of the major currencies. In Germany, factory orders declined in July. In the eurozone, retail sales fell for the first time in four months in July, amid lower fuel sales.
- At 05:30 SAST, the euro marginally advanced against the US dollar to trade at $1.073, while it has gained 0.1% against the British pound to trade at GBP0.8583.
Economic Updates
- In Germany, seasonally adjusted factory orders dropped 11.7% on a MoM basis in July, more than market expectations for a drop of 4.0%. Factory orders had advanced by a revised 7.6% in the previous month.
- In the UK, the construction PMI recorded a drop to a level of 50.80 in August, less than market expectations and compared to a reading of 51.70 recorded in the prior month.
- In the eurozone, retail sales dropped 0.2% on a MoM basis in July, in line with market expectations. Retail sales had advanced by a revised 0.2% in the previous month.
- In the US, the MBA mortgage applications dropped 2.9% in the week ended 1 September 2023, compared to a rise of 2.3% recorded in the prior week.
- In the US, goods and services trade deficit widened to $65.00bn in July, compared to a revised deficit of $63.70bn recorded in the previous month.
- In the US, goods trade deficit widened to $90.00bn in July, compared to a deficit of $88.20bn recorded in the previous month.
- In the US, the S&P Global services PMI dropped to a level of 50.50 in August, more than market expectations for a drop to a level of 51.00. The S&P Global services PMI had recorded a level of 52.30 in the previous month.
- In the US, the ISM services PMI unexpectedly rose to a level of 54.50 in August, compared to a level of 52.70 recorded in the previous month.
- The Bank of Canada (BoC) kept its key interest rates unchanged at 5.0%, in line with market expectations.
- In Canada, international merchandise trade deficit narrowed to C$0.99bn in July, compared to a revised deficit of C$4.92bn recorded in the previous month.
- In China, trade surplus narrowed to $68.36bn in August, compared to a surplus of $80.60bn in the prior month.
Corporate Updates
South Africa
- Grindrod Shipping Holdings Limited (JO:GSHJ): The logistics company, in its FY23 results, indicated that its revenue declined to $185.85mn from $271.87mn posted in the previous year. Its diluted EPS stood at $0.06, compared with $4.45 recorded in the previous year.
- Oil prices slip as dollar firms: Oil prices reversed course after rising more than 1.0% in the previous session, on a firmer dollar and as investors shrugged off jitters arising from supply cuts from Saudi Arabia and Russia.