Market Review, Commodities, Currencies, Economic & Corporate Update - 12.01.24

  • Market Overview

SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the green yesterday, as investors assessed more than expected rise in the US inflation.
  • Property developers, Resilient REIT (JO: RESJ ) and Emira Property Fund (JO: EMIJ ) advanced 2.0% and 1.2%, respectively.
  • Retailers, Mr Price Group (JO: MRPJ ) and Cashbuild (JO: CSBJ ) gained 1.6% and 1.4%, respectively.
  • Telecommunications companies, Telkom SA SOC (JO: TKGJ ) and MTN Group (JO: MTNJ ) rose 1.5% and 0.8%, respectively.
  • Food companies, RCL Foods (JO: RCLJ ) and Famous Brands (JO: FBRJ ) added 1.4% and 1.0%, respectively.
  • On the flipside, paper and packaging companies, Mondi (LON: MNDI ) and Sappi (JO: SAPJ ) both declined 1.5%, each.
  • Platinum miners, Impala Platinum (JO: IMPJ ) and Anglo American Platinum (JO: AMSJ ) fell 1.5% and 0.6%, respectively.
  • The JSE All Share index advanced 0.3% to close at 73,834.31.

UK MARKET REVIEW

  • The UK market finished weaker yesterday, following stronger-than-expected US inflation data that raised concerns over delay in rate cuts by the US Federal Reserve (Fed).
  • Retailer, Marks & Spencer Group (LON: MKS ) dropped 5.2%, after the company issued a cautious outlook for the full-year despite reporting better-than-expected sales over the Christmas trading period.
  • Banking firms, Barclays (LON: BARC ), Lloyds Banking Group (LON: LLOY ), HSBC Holdings (LON: HSBA ) and Standard Chartered (LON: STAN ) shed 4.6%, 3.7%, 3.1% and 2.1%, respectively.
  • Real estate companies, Barratt Developments (LON: BDEV ), Berkeley Group Holdings (LON: BKGH ) and Land Securities Group (LON: LAND ) declined 3.2%, 2.8% and 0.8%, respectively.
  • Supermarket chain, Tesco (LON: TSCO ) eased 1.4%.
  • The company upgraded its profit guidance for the second time in four months.
  • The FTSE 100 index declined 1.0% to close at 7,576.59.

US MARKET REVIEW

  • US markets ended mixed yesterday, as a stronger-than-expected US inflation and labour market data dampened hopes for early interest rate cuts by the Fed.
  • Technology companies, Salesforce (NYSE: CRM ), Cognizant Technology Solutions Corp (NASDAQ: CTSH ) and International Business Machines (NYSE: IBM ) advanced 2.7%, 2.1% and 0.6%, respectively.
  • On the contrary, media and entertainment companies, Paramount Global (NASDAQ: PARA ) and Warner Bros Discovery (NASDAQ: WBD ) dropped 5.5% and 3.9%, respectively.
  • Banking company, Citigroup (NYSE: C ) declined 1.8%, amid reports that the company had booked about $3.80bn in combined charges and reserves that would lower its fourth-quarter earnings.
  • The S&P 500 index fell 0.1% to settle at 4,780.24, while the DJIA index marginally advanced to close at 37,711.02.
  • The NASDAQ index marginally climbed to end the trading session at 14,970.19.

ASIA MARKET REVIEW

  • Asian markets are trading mostly higher this morning.
  • In Japan, food and beverages company, Asahi Group Holdings (TYO: 2502 ) has advanced 2.6%.
  • On the flipside, automobile company, Nissan Motor (TYO: 7201 ) has declined 1.9%.
  • In Hong Kong, sports product company, Anta Sports Product (HK: 2020 ) has gained 1.9%.
  • On the other hand, pharmaceutical company, Sino Biopharmaceutical (HK: 1177 ) has dropped 2.4%.
  • In South Korea, chemical company, Aekyung Chemical (KS: 161000 ) has shed 9.9%.
  • On the contrary, logistics services company, Kukbo Company has surged 13.9%.
  • The Nikkei 225 index is trading 1.1% higher at 35,422.95.
  • The Hang Seng index is trading marginally higher at 16,302.28, while the Kospi index is trading 0.6% lower at 2,525.59.

COMMODITIES

  • At 05:30 SAST today, Brent prices rose 2.1% to trade at $79/bl, after the US and Britain carried out strikes against Houthi military targets in Yemen.
  • Yesterday, Brent prices rose 0.8% to settle at $77.41/bl, as tensions in the Middle East escalated after Iran seized an oil tanker off the coast of Oman, in retaliation for the confiscation last year of the same vessel and its oil by the US.
  • At 05:30 SAST today, gold prices advanced 0.3% to trade at $2,034.78/oz. Yesterday, gold gained 0.2% to close at $2,028.09/oz, as a weaker dollar boosted demand for the safe haven yellow metal.
  • Yesterday, copper rose 0.6% to close at $8,331.00/mt. Aluminium closed 0.2% lower at $2,235.15/mt.

CURRENCIES

  • Yesterday, the South African rand strengthened against the US dollar. In South Africa, manufacturing production increased for a second consecutive month in November. In the US, consumer price inflation grew more than expected in December. Meanwhile, the number of people filing for initial jobless claims fell in the week ended 5 January 2024.
  • The yield on benchmark government bonds fell yesterday. The yield on the 2030 bond declined to 9.73%, while that for the longer-dated 2040 issue fell to 12.13%.
  • At 05:30 SAST, the US dollar is trading 0.2% lower against the South African rand at R18.6039, while the euro is trading 0.1% lower at R20.4292. At 05:30 SAST, the British pound has declined 0.1% against the South African rand to trade at R23.7741.
  • Yesterday, the euro declined against most of the major currencies. In Germany, current account surplus widened in November.
  • At 05:30 SAST, the euro advanced 0.1% against the US dollar to trade at $1.0982, while it has marginally weakened against the British pound to trade at GBP0.8595.

ECONOMIC UPDATES

  • In South Africa, manufacturing production unexpectedly rose 0.8% on a MoM basis in November, compared to a revised drop of 0.1% recorded in the previous month.
  • In Germany, current account surplus widened to EUR30.80bn in November, compared to a revised surplus of EUR20.00bn in October.
  • In Italy, industrial output fell 1.5% on a monthly basis in November, compared to a drop of 0.2% in the previous month.
  • In the US, the consumer price index (CPI) rose 0.3% on a MoM basis in December, more than market expectations for a rise of 0.2%. The CPI had advanced 0.1% in the prior month.
  • In the US, initial jobless claims unexpectedly fell to a level of 202.00K in the week ended 5 January 2024, compared to a revised level of 203.00K recorded in the previous week.
  • In Japan, the leading economic index registered a drop to a level of 107.70 in November, compared to a level of 108.90 recorded in the previous month.
  • In Japan, trade deficit widened to JPY724.10bn in November, compared to a deficit of JPY472.80bn recorded in the prior month.
  • In China, the CPI dropped 0.3% on a YoY basis in December, less than market expectations and compared to a drop of 0.5% recorded in the previous month.
  • In China, the producer price index (PPI) dropped 2.7% on a YoY basis in December, more than market expectations for a drop of 2.6%. The PPI had declined 3.0% in the previous month.
  • In China, trade surplus expanded to $75.34bn in December, compared to a surplus of $68.39bn recorded in the previous month.

CORPORATE UPDATES

SOUTH AFRICA

  • Mulilo Energy names Jan Fourie as new CEO: Mulilo Energy Holdings has announced that former executive vice-president of renewable energy for Scatec ASA, Jan Fourie, will replace Johnny Cullum as CEO when Cullum steps down in May.

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