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Market Review, Commodities, Currencies, Economic & Corporate Update - 13.06.24

Published 2024/06/13, 09:41
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SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the green yesterday, boosted by gains in retail sector stocks.
  • Retailer, SPAR Group (JO:SPPJ) surged 11.8%, after the company said that it has signed key terms with a third party for the sale of its Polish operations.
  • Additionally, the company said it would reduce its capital expenditure by R800.00 million this year to conserve cash.
  • Peers, Foschini Group (JO:TFGJ) and Clicks (JO:CLSJ) gained 2.7% and 2.0%, respectively.
  • Platinum miners, Impala Platinum (JO:IMPJ), Anglo American Platinum (JO:AMSJ) and Northam Platinum (JO:NPHJ) advanced 3.9%, 3.2% and 2.9%, respectively.
  • Pharmaceutical companies, Adcock Ingram Holdings (JO:AIPJ), Netcare (JO:NTCJ) and Life Healthcare Group (JO:LHCJ) rose 2.9%, 2.5% and 2.3%, respectively.
  • The JSE All Share index advanced 1.3% to close at 77,050.80.

UK MARKET REVIEW

  • The UK market finished firmer yesterday, as cooling inflation in the US and a slowdown in the British economy renewed hopes for imminent rate cuts.
  • Homebuilding companies, Persimmon (LON:PSN) and Taylor Wimpey (LON:TW) advanced 3.9% and 2.8%, respectively.
  • Banking firms, Lloyds Banking Group (LON:LLOY), Standard Chartered (LON:STAN) and NatWest (LON:NWG) group gained 3.0%, 2.9% and 2.1%, respectively.
  • Real estate companies, Barratt Development (LON:BDEV), Land Securities Group (LON:LAND) and Berkeley Group Holdings (LON:BKGH) rose 2.7%, 2.2% and 2.0%, respectively.
  • On the other hand, insurance company, Legal & General Group (LON:LGEN) dropped 5.5%, after the company announced plans for GBP200.00mn ($254.90mn) share buyback and a merger of its investment units.
  • The FTSE 100 index advanced 0.8% to close at 8,215.48.

US MARKET REVIEW

  • US markets ended mostly higher yesterday, following softer than expected US inflation data and after the US Federal Reserve (Fed) predicted only one interest rate cut this year.
  • Technology company, Oracle (NYSE:ORCL) surged 13.3%, after the company forecasted double-digit revenue for FY25, amid a growth in demand for the company's relatively low-cost cloud infrastructure services from artificial intelligence applications.
  • Peers, Apple (NASDAQ:AAPL) and Microsoft Corporation (NASDAQ:MSFT) advanced 2.9% and 1.9%, respectively.
  • On the contrary, media and entertainment companies, Warner Bros Discovery (NASDAQ:WBD) and Paramount Global (NASDAQ:PARA) dropped 2.9% and 2.2%, respectively.
  • The S&P 500 index rose 0.9% to settle at 5,421.03, while the DJIA index declined 0.1% to close at 38,712.21.
  • The NASDAQ index climbed 1.5% to end the trading session at 17,608.44.

ASIA MARKET REVIEW

  • Asian markets are trading mostly higher this morning, tracking overnight gains on Wall Street.
  • In Japan, pharmaceutical company, Sumitomo Pharma (TYO:4506) has declined 3.7%.
  • On the flipside, electronics company, Renesas Electronics (TYO:6723) has jumped 5.7%.
  • In Hong Kong, automobile company, Geely Automobile Holdings (HK:0175) has gained 3.6%.
  • On the other hand, internet technology company, NetEase (NASDAQ:NTES) has declined 1.6%.
  • In South Korea, automobile company, KR Motors (KS:000040) has surged 10.1%.
  • On the contrary, engineering company, Charm Engineering (KS:009310) has shed 3.8%.
  • The Nikkei 225 index is trading 0.1% lower at 38,831.36.
  • The Hang Seng index has gained 0.4% to trade at 18,013.36, while the Kospi index is trading 1.4% higher at 2,767.49.

COMMODITIES

  • At 05:30 SAST today, Brent prices fell 0.4% to trade at $82.28/bl.
  • Yesterday, Brent prices rose 0.8% to settle at $82.6/bl, amid ongoing tensions in the Middle East. Meanwhile, the US Energy Information Administration (EIA) reported that the US crude inventories advanced by 3.73mn bls in the week ended 7 June 2024.
  • At 05:30 SAST today, gold prices declined 0.3% to trade at $2,314.61/oz. Yesterday, gold gained 0.2% to close at $2,320.65/oz, as a weaker dollar boosted demand for the precious yellow metal.
  • Yesterday, copper rose 1.4% to close at $9,697.00/mt. Aluminium closed 0.6% higher at $2,552.22/mt.

CURRENCIES

  • Yesterday, the South African rand strengthened against the US dollar. In the US, the consumer price inflation (CPI) recorded a flat reading in May. Moreover, the US Fed kept its key interest rate unchanged as expected and forecasted only one rate cut this year. Meanwhile, the MBA mortgage applications advanced in the week ended 7 June 2024.
  • The yield on benchmark government bonds fell yesterday. The yield on the 2030 bond declined to 10.23%, while that for the longer-dated 2040 issue fell to 12.47%.
  • At 05:30 SAST, the US dollar is trading 0.1% higher against the South African rand at R18.4004, while the euro is trading 0.1% higher at R19.8906. At 05:30 SAST, the British pound has marginally declined against the South African rand to trade at R23.5312.
  • Yesterday, the euro mostly advanced against most of the major currencies. In Germany, consumer price inflation increased for the first time in five months in May. In the UK, GDP stagnated in April, as services growth was offset by drop in production and construction output. Meanwhile, industrial production declined more than expected in April.
  • At 05:30 SAST, the euro slightly slipped against the US dollar to trade at $1.0809, while it has gained 0.1% against the British pound to trade at GBP0.8453.

ECONOMIC UPDATES

  • In the UK, the RICS housing price balance dropped 17.0% in May, more than market expectations for a drop of 6.0%. The RICS housing price balance had recorded a revised drop of 7.0% in the prior month.
  • In the UK, goods trade deficit widened to GBP19.61bn in April, compared to a revised deficit of GBP13.97bn recorded in the prior month.
  • In the UK, industrial production dropped 0.9% on a MoM basis in April, more than market expectations for a drop of 0.1%. Industrial production had recorded a rise of 0.2% in the previous month.
  • In the UK, gross domestic product (GDP) recorded a flat reading on a MoM basis in April, in line with market expectations. GDP had recorded a rise of 0.4% in the prior month.
  • In the UK, manufacturing production declined 1.4% on a MoM basis in April, more than market expectations and compared to a rise of 0.3% in the previous month.
  • In Germany, the consumer price index (CPI) rose 0.1% on a MoM basis in May, in line with market expectations. The CPI had recorded a rise of 0.5% in the prior month.
  • The US Federal Reserve (Fed) kept its key interest rate unchanged at 5.5%, in line with market expectations.
  • In the US, the consumer price index (CPI) unexpectedly recorded a flat reading on a MoM basis in May, compared to a rise of 0.3% in the prior month.
  • In the US, the MBA mortgage applications rose 15.6% in the week ended 7 June 2024, compared to a drop of 5.2% recorded in the previous week.

CORPORATE UPDATES

SOUTH AFRICA

  • MultiChoice Group Limited (JO:MCGJ): The satellite television service company, in its FY24 results, reported that revenues declined 5.9% from the preceding year to R54.99bn. Its diluted loss per share stood at 935.00c, compared with 815.00c recorded in the previous year.
  • The Spar Group Limited (JO:SPPJ): The retail company, in its 1H24 results, reported that its revenue from continuing operations advanced 7.9% from the same period of the preceding year to R77.16bn. Its diluted EPS from continuing operations stood at 451.60c, compared with 484.70c recorded in the corresponding period of the previous year.
  • Motus Holdings Limited (JO:MTHJ): The workforce management company, in its trading update for the year ending 30 June 2024, revealed that it expects EPS to be between 25.0% to 35.0%, lower as compared with 2,008.00c recorded in the prior year. Also, it expects HEPS to be between 25.0% to 35.0%, lower as compared with 2,046.00c recorded in the prior year.
  • PPC Limited (JO:PPCJ): The cement company, in its trading update for the year ended 31 March 2024, stated that it expects EPS to be between 25.00c to 30.00c, as compared with a loss per share of 43.00c recorded in the prior year. Also, it expects HEPS to be between 27.00c to 28.50c, as compared with a headline loss per share of 9.00c recorded in the prior year. Moreover, the company intends to release financial statements for the year ended 31 March 2024 on or about 24 June 2024.
  • Oil improves as demand outlook looks rosy: Oil prices ticked higher amid upbeat global demand views from the US Energy Information Administration and OPEC, reinforced by industry data showing US crude oil inventories fell more than expected last week.

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