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Market Review, Commodities, Currencies, Economic & Corporate Update - 12.06.24

Published 2024/06/12, 08:58
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SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the red yesterday, as investors await the US Federal Reserve’s interest rate decision.
  • Diversified miners, Kumba Iron Ore (JO:KIOJ), Exxaro Resources (JO:EXXJ) and Pan African Resources (JO:PANJ) dropped 3.4%, 1.5% and 0.9%, respectively.
  • Platinum miners, Impala Platinum (JO:IMPJ), Northam Platinum (JO:NPHJ) and Anglo American Platinum (JO:AMSJ) declined 3.2%, 2.3% and 2.0%, respectively.
  • Gold miners, Harmony Gold Mining (JO:HARJ), Gold Fields (JO:GFIJ) and Sibanye Stillwater (JO:SSWJ) shed 2.5%, 1.9% and 1.8%, respectively.
  • Pharmaceutical companies, Life Healthcare Group (JO:LHCJ) and Adcock Ingram Holdings (JO:AIPJ) eased 2.5% and 1.1%, respectively.
  • On the flipside, retailers, Foschini Group (JO:TFGJ), SPAR Group (JO:SPPJ) and Mr Price Group (JO:MRPJ) advanced 4.3%, 2.3% and 2.2%, respectively.
  • The JSE All Share index declined 0.1% to close at 76,077.30.

UK MARKET REVIEW

  • The UK market finished weaker yesterday, weighed down by losses in financial and mining sector stocks.
  • Banking firms, Standard Chartered (LON:STAN), Barclays (LON:BARC), NatWest Group (LON:NWG) and Lloyds Banking Group (LON:LLOY) dropped 4.3%, 2.7%, 2.3% and 1.6%, respectively.
  • Miner, Rio Tinto (LON:RIO) shed 2.0%, after the company announced that it will buy Mitsubishi‘s 11.65% stake in Boyne Smelters for an undisclosed sum.
  • Peers, Antofagasta (LON:ANTO), Glencore (LON:GLEN) and Fresnillo (LON:FRES) declined 4.3%, 2.2% and 1.6%, respectively.
  • Insurance companies, Admiral Group (LON:ADML), Prudential (LON:PRU) and Legal & General Group (LON:LGEN) fell 3.5%, 1.6% and 1.2%, respectively.
  • Real estate companies, Land Securities Group (LON:LAND), Berkeley Group Holdings (LON:BKGH) and Barratt Developments (LON:BDEV) eased 2.6%, 1.5% and 1.1%, respectively.
  • The FTSE 100 index declined 1.0% to close at 8,147.81.

US MARKET REVIEW

  • US markets ended mostly higher yesterday, ahead of domestic inflation data and the FOMC meeting minutes.
  • Technology company, Apple (NASDAQ:AAPL) surged 7.3%, after the company unveiled new AI features meant to increase the appeal of its devices, including an improved Siri virtual assistant at its annual developer event.
  • Automobile company, General Motors (NYSE:GM) advanced 1.4%, after the company announced a $6.00bn share buyback plan. Meanwhile, the company slashed its 2024 EV production forecast on demand concerns.
  • On the contrary, financial services companies, American Express (NYSE:AXP), JPMorgan Chase (NYSE:JPM) and Goldman Sachs Group (NYSE:GS) dropped 3.4%, 2.6% and 2.1%, respectively.
  • The S&P 500 index rose 0.3% to settle at 5,375.32, while the DJIA index declined 0.3% to close at 38,747.42.
  • The NASDAQ index climbed 0.9% to end the trading session at 17,343.55.

ASIA MARKET REVIEW

  • Asian markets are trading mostly lower this morning, following a rise in China’s inflation data in May.
  • In Japan, pharmaceutical company, Daiichi Sankyo (TYO:4568) has shed 3.3%.
  • On the flipside, banking company, Softbank Group (TYO:9984) has advanced 1.8%.
  • In Hong Kong, automobile company, Li Auto (NASDAQ:LI) has declined 3.0%.
  • On the other hand, optical devices company, Sunny Optical Technology (HK:2382) has gained 1.4%.
  • In South Korea, cosmetics company, Hankook Cosmetics (KS:003350) Manufacturing has surged 10.0%.
  • On the contrary, steel pipes company, Nexteel (KS:092790) has dropped 5.1%. The Nikkei 225 index is trading 0.8% lower at 38,826.33.
  • The Hang Seng index has declined 1.2% to trade at 17,955.43, while the Kospi index is trading 0.3% higher at 2,713.94.

COMMODITIES

  • At 05:30 SAST today, Brent prices rose 0.4% to trade at $82.26/bl, amid optimistic demand outlook.
  • Yesterday, Brent prices rose 0.4% to settle at $81.92/bl, after the Energy Information Administration's (EIA) revision its global oil demand growth forecast to 1.10mn bpd for the year. Meanwhile, the OPEC+ maintained its prediction for robust growth in 2024. Additionally, the American Petroleum Institute (API) reported that the US crude oil inventories declined by 2.43mn bls in the week ended 7 June 2024.
  • At 05:30 SAST today, gold prices declined 0.1% to trade at $2,314.98/oz. Yesterday, gold gained 0.3% to close at $2,316.27/oz, as a stronger greenback dented demand for the precious yellow metal.
  • Yesterday, copper declined 1.3% to close at $9,566.75/mt. Aluminium closed 1.3% lower at $2,537.72/mt.

CURRENCIES

  • Yesterday, the South African rand strengthened against the US dollar. In South Africa, manufacturing production rose in April. In the US, the NFIB business optimism index rose for a second consecutive month in May.
  • The yield on benchmark government bonds fell yesterday. The yield on the 2030 bond fell to 10.35%, while that for the longer-dated 2040 issue declined to 12.59%.
  • At 05:30 SAST, the US dollar is trading 0.2% lower against the South African rand at R18.5574, while the euro is trading 0.2% lower at R19.9339. At 05:30 SAST, the British pound has declined 0.2% against the South African rand to trade at R23.6454.
  • Yesterday, the euro declined against most of the major currencies. In the UK, the ILO unemployment rate unexpectedly rose in April.
  • At 05:30 SAST, the euro marginally advanced against the US dollar to trade at $1.0744, while it has marginally gained against the British pound to trade at GBP0.8432.

ECONOMIC UPDATES

  • In South Africa, manufacturing production rose 5.3% on a YoY basis in April, compared to a revised drop of 6.5% recorded in the prior month.
  • In the UK, the ILO unemployment rate unexpectedly rose to 4.4% in April, compared to 4.3% recorded in the prior month.
  • In the US, the NFIB business optimism index advanced to a level of 90.50 in May, more than market expectations for a rise to a level of 89.80. The NFIB business optimism index had recorded a level of 89.70 in the prior month.
  • In Canada, building permits rose 20.5% on a MoM basis in April, more than market expectations for a rise of 5.2%. Building permits had recorded a revised drop of 12.3% in the prior month.
  • In Japan, the producer price index (PPI) rose 2.4% on a YoY basis in May, more than market expectations and compared to a revised rise of 1.1% in the previous month.
  • In China, the consumer price index (CPI) climbed 0.3% on a YoY basis in May, less than market expectations and compared to a rise of 0.3% in the previous year.
  • In China, the PPI dropped 1.4% on a YoY basis in May, less than market expectations for a drop of 1.5%. The PPI had declined 2.5% in the previous month.

CORPORATE UPDATES

SOUTH AFRICA

  • Naspers Limited (JO:NPNJn): The technology company, in its trading update for the year ended 31 March 2024, indicated that during the year its ecommerce businesses delivered peer leading growth and accelerated profitability. The company is on track to fulfil its promises of consolidated ecommerce profitability and cash flow generation. It expects to report a loss per share between 409.00 US cents and 555.00 US cents, as compared with an EPS of 2,078.00 US cents recorded in the previous year. Also, it expects HEPS to be between 669.00 US cents and 677.00 US cents, as compared with 119.00 US cents recorded in the prior year.
  • Prosus N.V. (JO:PRXJn): The internet services company, in its trading update for the year ended 31 March 2024, revealed that it expects loss per share to be between 88.00 US cents and 114.00 US cents, as compared an EPS of 368.00 US cents recorded in the previous year. Also, it expects HEPS to be between 107.00 US cents and 111.00 US cents, as compared with 23.00 US cents recorded in the previous year.
  • Oil loses ground in cautious trade: Oil prices traded lower, as investors waited for key US inflation data and the outcome of the Federal Reserve’s policy meeting to glean a clearer picture of where inflation is heading, and how that will affect fuel demand.

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