Market Review, Commodities, Currencies, Economic & Corporate Update - 08.04.24

  • Market Overview

SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the red on Friday, weighed down by losses in telecommunication and property sector stocks.
  • Telecommunication companies, Telkom SA SOC (JO: TKGJ ), Vodacom Group (JO: VODJ ), Blue Label Telecoms (JO: BLUJ ) and MTN Group (JO: MTNJ ) dropped 5.2%, 2.3%, 1.5% and 1.0%, respectively.
  • Property developers, Resilient REIT (JO: RESJ ), Vukile Property Fund (JO: VKEJ ), Equites Property Fund (JO: EQUJ ) and NEPI Rockcastle N.V. (JO: NRPJ ) declined 3.8%, 2.5%, 1.9% and 1.2%, respectively.
  • Platinum miners, Anglo American Platinum (JO: AMSJ ) and Impala Platinum (JO: IMPJ ) shed 3.8% and 1.8%, respectively.
  • Food companies, Famous Brands (JO: FBRJ ) and RCL Foods (JO: RCLJ ) fell 3.6% and 3.5%, respectively.
  • Diversified miners, Kumba Iron Ore (JO: KIOJ ), Exxaro Resources (JO: EXXJ ) and Pan African Resources (JO: PANJ ) eased 2.2%, 1.7% and 1.5%, respectively.
  • The JSE All Share index declined 0.8% to close at 74,774.72.

UK MARKET REVIEW

  • The UK market finished weaker on Friday, on Middle East tensions and following hawkish remarks from the US Federal Reserve (Fed) officials.
  • Retailer, Ocado Group (LON: OCDO ) plunged 9.0%, after the company announced that Chairman Rick Haythornthwaite would step down next year.
  • Water utilities companies, Severn Trent (LON: SVT ) and United Utilities Group (LON: UU ) declined 2.3% and 2.0%, respectively.
  • Real estate companies, Land Securities Group (LON: LAND ), Barratt Developments (LON: BDEV ) and Berkeley Group Holdings (LON: BKGH ) shed 1.9%, 1.6% and 1.3%, respectively.
  • Banking firms, Barclays (LON: BARC ), Lloyds Banking Group (LON: LLOY ) and NatWest Group (LON: NWG ) eased 1.8%, 1.2% and 0.8%, respectively.
  • The FTSE 100 index declined 0.8% to close at 7,911.16.

US MARKET REVIEW

  • US markets ended higher on Friday, following stronger US jobs data.
  • Technology companies, Salesforce (NYSE: CRM ), Microsoft (NASDAQ: MSFT ), Cisco Systems (NASDAQ: CSCO ) and International Business Machines (NYSE: IBM ) advanced 2.6%, 1.8%, 0.9% and 0.6%, respectively.
  • Energy companies, both, Devon Energy Corporation (NYSE: DVN ) and Exxon Mobil Corporation (NYSE: XOM ) rose 1.4%, each.
  • Financial services companies, American Express (NYSE: AXP ), Visa (NYSE: V ) and JPMorgan Chase (NYSE: JPM ) gained 1.3%, 1.2% and 0.9%, respectively.
  • On the contrary, media and entertainment companies, Paramount Global (NASDAQ: PARA ) and Warner Bros Discovery (NASDAQ: WBD ) declined 3.2% and 1.4%, respectively.
  • The S&P 500 index rose 1.1% to settle at 5,204.34, while the DJIA index advanced 0.8% to close at 38,904.04.
  • The NASDAQ index climbed 1.2% to end the trading session at 16,248.52.

ASIA MARKET REVIEW

  • Asian markets are trading higher this morning. In Japan, automobile company, Suzuki Motor Corporation (TYO: 7269 ) has advanced 4.5%.
  • On the flipside, pharmaceutical company, Chugai Pharmaceutical (TYO: 4519 ) has eased 0.9%.
  • In Hong Kong, packaged meat products company, WH Group (HK: 0288 ) has gained 3.7%.
  • On the other hand, insurance company, AIA Group (HK: 1299 ) has declined 1.3%.
  • In South Korea, engineering company, Charm Engineering (KS: 009310 ) has surged 8.2%.
  • On the contrary, chemical company, ISU Specialty Chemical (KS: 457190 ) has shed 6.3%.
  • The Nikkei 225 index is trading 1.3% higher at 39,517.81.
  • The Hang Seng index has advanced 0.7% to trade at 16,837.09, while the Kospi index is trading marginally higher at 2,714.95.

COMMODITIES

  • At 05:30 SAST today, Brent prices fell 1.6% to trade at $89.71/bl.
  • On Friday, Brent prices rose 0.6% to settle at $91.17/bl, on supply tightening amid escalating conflict between Israel and Iran. Moreover, the Baker Hughes reported that the US oil rigs count rose by 2 to 508 in the week ended 5 April 2024.
  • At 05:30 SAST today, gold prices advanced 0.6% to trade at $2,342.73/oz. On Friday, gold gained 1.8% to close at $2,329.50/oz, as a weaker greenback boosted demand for the safe haven yellow metal.
  • On Friday, copper declined 0.4% to close at $9,208.35/mt. Aluminium closed 0.2% higher at $2,450.35/mt.

CURRENCIES

  • On Friday, the South African rand strengthened against the US dollar. In the US, non-farm payrolls rose more than expected in March. Meanwhile, the unemployment rate unexpectedly fell in March.
  • The yield on benchmark government bonds rose on Friday. The yield on the 2030 bond advanced to 10.79%, while that for the longer-dated 2040 issue rose to 13.13%.
  • At 05:30 SAST, the US dollar is trading 0.1% lower against the South African rand at R18.6796, while the euro is trading 0.1% lower at R20.2443. At 05:30 SAST, the British pound has declined 0.1% against the South African rand to trade at R23.6134.
  • On Friday, the euro mostly advanced against most of the major currencies. In the eurozone, retail sales fell in February, due to lower demand for both food and non-food items.
  • At 05:30 SAST, the euro marginally slipped against the US dollar to trade at $1.0837, while it has slightly gained against the British pound to trade at GBP0.8580.

ECONOMIC UPDATES

  • In the UK, the Halifax house prices unexpectedly fell 1.0% on a MoM basis in March, compared to a revised rise of 0.3% recorded in the previous month.
  • In the UK, the construction PMI rose more than expected to a level of 50.20 in March, compared to a level of 49.70 recorded in the prior month.
  • In Germany, seasonally adjusted factory orders rose 0.2% on a MoM basis in February, less than market expectations for a rise of 0.8%. Factory orders had recorded a revised drop of 11.4% in the prior month.
  • In the eurozone, retail sales dropped 0.5% on a MoM basis in February, more than market expectations for a drop of 0.4%. Retail sales had recorded a flat reading in the previous month.
  • In the US, nonfarm payrolls rose by 303.00K in March, more than market expectations for a rise of 200.00K jobs. Nonfarm payrolls had recorded a revised level of 207.00K jobs in the prior month.
  • In the US, the unemployment rate unexpectedly fell to 3.8% in March, compared to 3.9% recorded in the prior month.
  • In Canada, the unemployment rate rose to 6.1% in March, more than market expectations and compared to 5.8% recorded in the prior month.

CORPORATE UPDATES

SOUTH AFRICA

  • Sanlam Limited (JO: SLMJ ): The insurance company announced through its wholly owned subsidiary Sanlam Emerging Markets Mauritius Limited, that it has reached an agreement in respect of transactions to increase the Sanlam Group’s effective shareholding in Shriram General Insurance Company (SGIC) and Shriram Life Insurance Company (SLIC). The transaction entails the acquisition of an effective 6.29% in SGIC and 7.04% in SLIC from TPG India Investments II, the acquisition of an effective 4.45% in SGIC and 4.98% in SLIC from the Shriram Ownership Trust and the disposal of a part of Sanlam Life’s direct holding in Shriram Finance Limited.
  • Oil prices set for second consecutive weekly gain: Oil prices extended gains and headed for a second weekly gain, supported by geopolitical tensions in Europe and the Middle East, concerns over tightening supply, and optimism about global fuel demand growth as economies improve.

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