SOUTH AFRICA MARKET REVIEW
- South African markets closed in the green yesterday, buoyed by optimism surrounding potential rate cuts by the US Federal Reserve (Fed) this year.
- Platinum miners, Northam Platinum (JO:NPHJ), Anglo American Platinum (JO:AMSJ) and Impala Platinum (JO:IMPJ) advanced 5.6%, 2.1% and 1.7%, respectively.
- Retailers, Lewis Group (JO:LEWJ), Shoprite Holdings (JO:SHPJ) and Foschini Group (JO:TFGJ) gained 2.2%, 1.7% and 0.8%, respectively.
- Lenders, Capitec Bank Holdings (JO:CPIJ), FirstRand (JO:FSRJ) and Standard Bank Group (JO:SBKJ) rose 2.1%, 1.6% and 0.6%, respectively.
- On the flipside, gold miner, Gold Fields (JO:GFIJ) dropped 4.3%, after the company reported lower production for the quarter ended March.
- However, it has kept its annual production guidance unchanged.
- Property developers, Equites Property Fund (JO:EQUJ), Attacq (JO:ATTJ) and Resilient REIT (JO:RESJ) declined 2.2%, 1.9% and 0.8%, respectively.
- The JSE All Share index advanced 0.2% to close at 76,929.50.
UK MARKET REVIEW
- The UK market finished firmer yesterday, as investors await the Bank of England’s (BoE) policy meeting due this week.
- Energy company, Shell (LON:RDSa) gained 1.3%, amid news that it is in talks with Saudi Aramco (TADAWUL:2222) to sell its gas station business in Malaysia for a consideration of up to $1.00bn.
- On the other hand, airlines company, easyJet (LON:EZJ) dropped 5.8%, after Ryanair’s Chief Executive Michael O'Leary cautioned that ticket prices to be lower than expected this summer.
- Energy company, BP (LON:BP) fell 1.3%, after the company reported lower than expected earnings in 1Q24, as lower energy prices and a US refinery outage offset increased oil and gas production.
- The FTSE 100 index advanced 1.2% to close at 8,313.67.
US MARKET REVIEW
- US markets ended mostly higher yesterday, driven by expectations of rate cuts by the US Fed.
- Pharmaceutical companies, Merck & Company (NYSE:MRK) and Eli Lilly (NYSE:LLY) Company advanced 2.2% and 1.5%, respectively.
- On the contrary, media and entertainment company, Walt Disney (NYSE:DIS) plunged 9.5%, after the company reported a drop in its traditional TV business and weaker box office in 2Q24.
- Automaker company, Tesla (NASDAQ:TSLA) shed 3.8%, amid data showed its China-made electric vehicles sales in April dropped 18% from a year earlier.
- The S&P 500 index rose 0.1% to settle at 5,187.70, while the DJIA index advanced 0.1% to close at 38,884.26.
- The NASDAQ index eased 0.1% to end the trading session at 16,332.56.
ASIA MARKET REVIEW
- Asian markets are trading mostly lower this morning, ahead of major corporate earnings in Japan.
- In Japan, consumer electronics company, Sony Group (NYSE:SONY) has shed 3.8%. On the flipside, pharmaceutical company, Sumitomo Pharma (TYO:4506) has gained 1.4%.
- In Hong Kong, consumer electronics company, Xiaomi Corporation (HK:1810) has advanced 4.5%.
- On the other hand, real estate company, Longfor Group Holdings (HK:0960) has dropped 6.6%.
- In South Korea, chemical company, Aekyung Chemical (KS:161000) has surged 17.3%.
- On the contrary, electric power distribution company, LS Eco Energy has declined 3.5%.
- The Nikkei 225 index is trading 1.4% lower at 38,303.39.
- The Hang Seng index has gained 0.2% to trade at 18,524.51, while the Kospi index is trading 0.1% lower at 2,731.38.
COMMODITIES
- At 05:30 SAST today, Brent prices fell 0.4% to trade at $82.81/bl.
- Yesterday, Brent prices fell 0.2% to settle at $83.16/bl, amid ease in supply concerns. Meanwhile, the American Petroleum Institute (API) reported that the US crude oil inventories declined by 1.43mn bls in the week ended 3 May 2024.
- At 05:30 SAST today, gold prices marginally advanced to trade at $2,316.24/oz. Yesterday, gold declined 0.5% to close at $2,315.20/oz.
- Yesterday, copper rose 1.6% to close at $9,894.12/mt. Aluminium closed 1.1% higher at $2,564.15/mt.
CURRENCIES
- Yesterday, the South African rand weakened against the US dollar.
- The yield on benchmark government bonds fell yesterday. The yield on the 2030 bond declined to 10.73%, while that for the longer-dated 2040 issue fell to 13.04%.
- At 05:30 SAST, the US dollar is trading 0.1% higher against the South African rand at R18.5466, while the euro is trading 0.1% higher at R19.9222. At 05:30 SAST, the British pound has gained 0.1% against the South African rand to trade at R23.1605.
- Yesterday, the euro mostly advanced against most of the major currencies. In Germany, construction sector deteriorated sharply at the start of 2Q24, amid weaker demand. In the eurozone, retail sales rose more than expected in March, driven by higher food and auto fuels sales.
- At 05:30 SAST, the euro slipped 0.1% against the US dollar to trade at $1.0742, while it has slightly gained against the British pound to trade at GBP0.8602.
ECONOMIC UPDATES
- In the UK, the Halifax house prices rose 0.1% on a MoM basis in April, less than market expectations for a rise of 0.2%. The Halifax house prices had recorded a revised drop of 0.9% in the prior month.
- In the UK, the construction PMI recorded a rise to a level of 53.00 in April, more than market expectations for an advance to a level of 50.40. In the previous month, the construction PMI had recorded a reading of 50.20.
- In Switzerland, the unemployment rate remained unchanged at 2.3% on a MoM basis in April.
- In France, trade deficit narrowed to EUR5.47bn in March, compared to a revised EUR5.61bn recorded in the prior month.
- In Germany, seasonally adjusted factory orders unexpectedly fell 0.4% on a MoM basis in March, compared to a revised drop of 0.8% recorded in the prior month.
- In Germany, trade surplus widened to EUR22.30bn in March, compared to a surplus of EUR21.40bn recorded in the previous month.
- In the eurozone, retail sales rose 0.8% on a MoM basis in March, more than market expectations for a rise of 0.6%. Retail sales had recorded a revised drop of 0.3% in the prior month.
- In Canada, the Ivey PMI rose to a level of 63.00 in April, more than market expectations for a rise to a level of 58.10. The Ivey PMI had recorded a level of 57.50 in the prior month.
CORPORATE UPDATES
SOUTH AFRICA
- Gold Fields Limited (JO:GFIJ): The gold mining company, in its operational update for the quarter ended 31 March 2024, stated that production for the quarter was severely impacted by weather-related events and operational challenges particularly at the Gruyere, St Ives, South Deep and Cerro Corona mines resulting in group attributable equivalent gold production (excluding Asanko) for the quarter being 18% lower YoY and 22% lower quarter on quarter (QoQ) to 464koz. Asanko was sold in 1Q24 and the results from the operation have been excluded. Moreover, annual group production and cost guidance for 2024 remain unchanged.
- Attacq Limited (JO:ATTJ): The real estate investment trust company announced that Attacq Waterfall Investment Company Proprietary Limited, a 70% held subsidiary of the company, have reached a conditional agreement whereby AWIC will acquire the Att MOA 20 Proprietary’s 20% undivided share of the leasehold rights and rental enterprises in respect of the Mall of Africa and following the implementation, AWIC will own 100% of the Mall. The purchase consideration for the undivided share is R1.07bn.
- Oil rises after Israel strikes Gaza: Oil prices edged higher after Israel struck Rafah in Gaza, while negotiations for a ceasefire with Hamas continued without resolution.