Market Review, Commodities, Currencies, Economic & Corporate Update - 10.05.24

  • Market Overview

SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the green yesterday, as softer US jobs data raised expectations that the US Federal Reserve (Fed) might cut interest rates this year.
  • Diversified miners, Anglo American (JO: AGLJ ), Pan African Resources and Merafe Resources (JO: MRFJ ) advanced 3.0%, 0.9% and 0.8%, respectively.
  • Gold miners, Sibanye Stillwater (JO: SSWJ ), Gold Fields (JO: GFIJ ), Harmony Gold Mining (JO: HARJ ) and AngloGold Ashanti (JO: ANGJ ) gained 2.6%, 2.5%, 2.0% and 1.3%, respectively.
  • Property developers, Burstone Group (JO: BTNJ ), Equites Property Fund (JO: EQUJ ) and Redefine Properties (JO: RDFJ ) rose 2.5%, 1.9% and 0.5%, respectively.
  • On the flipside, retailers, Pick ‘n Pay Stores (JO: PIKJ ), SPAR Group (JO: SPPJ ), Clicks Group (JO: CLSJ ) and Lewis Group (JO: LEWJ ) dropped 3.3%, 1.7%, 1.5% and 0.6%, respectively.
  • The JSE All Share index advanced 0.5% to close at 77,539.13.

UK MARKET REVIEW

  • The UK market finished firmer yesterday, after the Bank of England (BoE) kept its interest rates unchanged and signalled rate cuts soon.
  • Retailers, JD Sports Fashion (LON: JD ), Ocado Group (LON: OCDO ), Marks & Spencer Group (LON: MKS ) and J Sainsbury (LON: SBRY ) advanced 2.9%, 2.3%, 1.7% and 1.1%, respectively.
  • Miners, Antofagasta (LON: ANTO ), Fresnillo (LON: FRES ), Rio Tinto (LON: RIO ) and Glencore (LON: GLEN ) (JO: GLNJ ) gained 1.5%, 1.3%, 1.0% and 0.6%, respectively.
  • Energy utilities companies, Centrica (LON: CNA ), National Grid (LON: NG ) and SSE (LON: SSE ) rose 1.5%, 1.0% and 0.5%, respectively.
  • Water utilities companies, United Utilities Group (LON: UU ) and Severn Trent (LON: SVT ) added 1.5% and 1.2%, respectively.
  • On the other hand, private equity and venture capital company, 3i (LON: III ) Group dropped 5.2%, after the company reported a decline in annual total return.
  • The FTSE 100 index advanced 0.3% to close at 8,381.35.

US MARKET REVIEW

  • US markets ended higher yesterday, as signs of softening US labour market renewed hopes for rate cuts by the US Fed.
  • Financial services companies, Goldman Sachs Group (NYSE: GS ), American Express (NYSE: AXP ), JPMorgan Chase (NYSE: JPM ) and Visa (NYSE: V ) advanced 1.9%, 1.2%, 1.0% and 0.5%, respectively.
  • Energy companies, Chevron Corporation (NYSE: CVX ), Exxon Mobil Corporation (NYSE: XOM ) and Devon Energy Corporation (NYSE: DVN ) gained 1.8%, 1.2% and 0.6%, respectively.
  • Pharmaceutical companies, Amgen (NASDAQ: AMGN ), Pfizer (NYSE: PFE ) and Moderna (NASDAQ: MRNA ) rose 1.8%, 1.2% and 0.7%, respectively.
  • On the contrary, technology companies, Salesforce (NYSE: CRM ) and International Business Machines (NYSE: IBM ) dropped 1.4% and 1.2%, respectively.
  • The S&P 500 index rose 0.5% to settle at 5,214.08, while the DJIA index advanced 0.8% to close at 39,387.76.
  • The NASDAQ index climbed 0.3% to end the trading session at 16,346.27.

ASIA MARKET REVIEW

  • Asian markets are trading higher this morning, amid global rate cuts optimism.
  • In Japan, transportation company, Kawasaki Kisen Kaisha (TYO: 9107 ) has jumped 6.6%.
  • On the flipside, automobile company, Nissan Motor (TYO: 7201 ) has shed 3.6%.
  • In Hong Kong, insurance company, Ping An Insurance (HK: 2318 ) has advanced 3.5%.
  • On the other hand, automobile company, Li Auto (NASDAQ: LI ) has declined 3.1%.
  • In South Korea, shipping and carrier services company, Korea Line Corporation (KS: 005880 ) has surged 9.6%.
  • On the contrary, electrical components company, ISU Petasys (KS: 007660 ) has dropped 4.5%.
  • The Nikkei 225 index is trading 0.6% higher at 38,311.63.
  • The Hang Seng index has gained 1.5% to trade at 18,822.78, while the Kospi index is trading 0.6% higher at 2,728.47.

COMMODITIES

  • At 05:30 SAST today, Brent prices rose 0.5% to trade at $84.34/bl.
  • Yesterday, Brent prices rose 0.4% to settle at $83.88/bl, amid hopes for a rise in US and Chinese demand.
  • At 05:30 SAST today, gold prices advanced 0.2% to trade at $2,351.14/oz. Yesterday, gold gained 1.6% to close at $2,346.60/oz, as a weaker dollar boosted demand for the safe haven yellow metal.
  • Yesterday, copper rose 0.4% to close at $9,780.44/mt.
  • Aluminium closed 0.8% higher at $2,570.35/mt.

CURRENCIES

  • Yesterday, the South African rand strengthened against the US dollar. In South Africa, manufacturing production declined in March, largely due a drop in automotive industry output. In the US, the number of initial jobless claims rose more than expected in the week ended 3 May 2024.
  • The yield on benchmark government bonds rose yesterday. The yield on the 2030 bond advanced to 10.79%, while that for the longer-dated 2040 issue rose to 12.70%.
  • At 05:30 SAST, the US dollar is trading 0.2% higher against the South African rand at R18.5013, while the euro is trading 0.1% higher at R19.9378. At 05:30 SAST, the British pound has gained 0.2% against the South African rand to trade at R23.1568.
  • Yesterday, the euro mostly advanced against most of the major currencies. In the UK, the BoE maintained its key policy rate for a sixth straight time.
  • At 05:30 SAST, the euro slipped 0.1% against the US dollar to trade at $1.0776, while it has marginally weakened against the British pound to trade at GBP0.8611.

ECONOMIC UPDATES

  • In South Africa, manufacturing production dropped 6.4% on a YoY basis in March, compared to a revised rise of 4.0% recorded in the prior month.
  • The Bank of England (BoE) kept its key interest rate unchanged at 5.25%, in line with market expectations.
  • In the US, initial jobless claims rose to a level of 231.00K in the week ended 3 May 2024, more than market expectations for a rise to a level of 210.00K. Initial jobless claims had recorded a revised level of 209.00K in the prior week.
  • In Japan, trade balance recorded a surplus of JPY491.00bn in March, compared to a deficit of JPY280.90bn recorded in the prior month.

CORPORATE UPDATES

SOUTH AFRICA

  • Pan African Resources Plc (JO: PANJ ): The mining company, in its revised production update for the year ended 30 June 2024, revealed that it has narrowed production guidance to between 186,000oz to 190,000oz. Moreover, All in Sustaining Costs (AISC) guidance has been maintained at between $1,325/oz to $1,350/oz. Also, the company intends to announce its final results on 11 September 2024.
  • Sappi Limited (JO: SAPJ ): The paper company, in its 2Q24 results, indicated that its sales fell to $1.35bn from $1.44bn posted in the corresponding period of the previous year. Its diluted EPS dropped 58.3% to 5.0 US cents from the same period of the prior year.
  • RFG Holdings Limited (JO: RFGJ ): The food company, in its 1H24 trading update, revealed that it expects EPS to be between 18.0% to 23.0%, higher as compared to 83.30c recorded in the prior year. Also, it expects HEPS to be between 18.0% to 23.0%, higher as compared to 83.20c recorded in the prior year.
  • KAL group (JO: KALJ ) first-half earnings rise 7.0%: Agriculture, fuel and manufacturing company KAL Group, formerly Kaap Agri, has reported a 7.0% rise in headline earnings for the first half.
  • Lesaka (JO: LSKJ ) reduces its net loss in third quarter: Lesaka Technologies reduced its net loss in the third quarter, as revenue increased by 9.0% in rand terms.

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