SOUTH AFRICA MARKET REVIEW
- South African markets closed in the red yesterday, led by losses in mining sector stocks.
- Gold miners, Gold Fields (JO:GFIJ) and Sibanye Stillwater (JO:SSWJ) dropped 6.0% and 1.1%, respectively.
- Property developers, Attacq (JO:ATTJ), Burstone Group (JO:BTNJ), Equites Property Fund (JO:EQUJ) and Redefine Properties (JO:RDFJ) declined 3.2%, 2.3%, 1.8% and 1.4%, respectively.
- Telecommunications companies, Telkom SA SOC (JO:TKGJ) and Vodacom Group (JO:VODJ) shed 3.1% and 2.2%, respectively.
- Food companies, Tiger Brands (JO:TBSJ) and RCL Foods (JO:RCLJ) fell 2.1% and 1.8%, respectively.
- On the flipside, diversified miners, Exxaro Resources (JO:EXXJ), Kumba Iron Ore (JO:KIOJ) and Anglo American (JO:AGLJ) advanced 1.2%, 1.1% and 0.6%, respectively.
- The JSE All Share index declined 0.2% to close at 80,560.81.
UK MARKET REVIEW
- The UK market finished firmer yesterday, buoyed by gains in commodity-linked sector stocks.
- Telecommunications company, BT Group (LON:BT) surged 8.4%, after India's Bharti Enterprises agreed to acquire a 24.5% stake in the company for GBP3.20bn ($4.09bn).
- Miners, Antofagasta (LON:ANTO), Glencore (LON:GLEN) and Fresnillo (LON:FRES) advanced 1.8%, 1.3% and 0.9%, respectively, tracking higher gold prices.
- Energy companies, BP (LON:BP) and Shell (LON:RDSa) gained 1.4% and 0.8%, respectively, amid rising oil prices.
- On the other hand, retailers, JD Sports Fashion (LON:JD), B&M European Value Retail S.A. (LON:BMEB) and Burberry Group (LON:BRBY) dropped 4.1%, 2.2% and 2.0%, respectively.
- Leisure and travel companies, Whitbread (LON:WTB) and InterContinental Hotels Group (LON:IHG) declined 1.4% and 0.6%, respectively.
- The FTSE 100 index advanced 0.5% to close at 8,210.25.
US MARKET REVIEW
- US markets ended mostly higher yesterday, as investors await a series of US economic data for further cues on direction of Federal Reserve policy.
- Financial services company, KeyCorp (NYSE:KEY) surged 9.1%, after Scotiabank bought a minority stake in an all-stock deal worth $2.80bn.
- Coffeehouse chains company, Starbucks Corporation (NASDAQ:SBUX) 2.6%, amid news that activist investor Starboard Value has taken a stake and is pushing for improvements to boost the stock price.
- On the contrary, technology companies, Intel (NASDAQ:INTC), Cisco Systems (NASDAQ:CSCO) and International Business Machines Corporation (NYSE:IBM) dropped 1.8%, 1.3% and 1.0%, respectively.
- The S&P 500 index marginally rose to settle at 5,344.39, while the DJIA index declined 0.4% to close at 39,357.01.
- The NASDAQ index climbed 0.2% to end the trading session at 16,780.61.
ASIA MARKET REVIEW
- Asian markets are trading mostly lower this morning.
- In Japan, transportation company, Kawasaki Kisen Kaisha (TYO:9107) has advanced 6.4%.
- On the flipside, airlines company, Japan Airlines (TYO:9201) has declined 2.5%.
- In Hong Kong, real estate company, Longfor Group Holdings (HK:0960) has shed 1.9%.
- On the other hand, insurance company, AIA Group (HK:1299) has gained 1.5%.
- In South Korea, cosmetics company, Hankook Cosmetics (KS:003350) Manufacturing has plunged 7.8%.
- On the contrary, chemical company, ISU Chemical (KS:005950) has soared 11.2%.
- The Nikkei 225 index is trading 2.2% higher at 35,785.55.
- The Hang Seng index has marginally eased to trade at 17,109.94, while the Kospi index is trading 0.2% lower at 2,612.89.
COMMODITIES
- At 05:30 SAST today, Brent prices fell 0.9% to trade at $81.54/bl.
- Yesterday, Brent prices rose 3.3% to settle at $82.3/bl, amid concerns over a potential escalation in the Middle East conflict, which could further tighten global crude oil supplies.
- At 05:30 SAST today, gold prices declined 0.5% to trade at $2,463.23/oz. Yesterday, gold gained 1.8% to close at $2,475.65/oz, as investors awaited US inflation data for further cues on US Federal Reserve's rate cut path.
- Yesterday, copper rose 1.2% to close at $8,908.01/mt. Aluminium closed 0.4% higher at $2,309.75/mt.
CURRENCIES
- Yesterday, the South African rand strengthened against the US dollar.
- The yield on benchmark government bonds fell yesterday. The yield on the 2030 bond declined to 9.33%, while that for the longer-dated 2040 issue fell to 11.46%.
- At 05:30 SAST, the US dollar is trading 0.1% lower against the South African rand at R18.2415, while the euro is trading slightly higher at R19.9536. At 05:30 SAST, the British pound has slightly gained against the South African rand to trade at R23.3012.
- Yesterday, the euro mostly advanced against most of the major currencies.
- At 05:30 SAST, the euro advanced 0.1% against the US dollar to trade at $1.0939, while it has marginally weakened against the British pound to trade at GBP0.8563.
ECONOMIC UPDATES
- In Canada, building permits dropped 13.9% on a MoM basis in June, compared to a revised drop of 12.7% recorded in the previous month.
- In Japan, the producer price index (PPI) rose 3.0% on a YoY basis in July, in line with market expectations. The PPI had recorded a rise of 2.9% in the previous month.
- In Australia, the Westpac consumer confidence index rose 2.8% in August, compared to a drop of 1.1% recorded in the prior month.
CORPORATE UPDATES
SOUTH AFRICA
- Gold Fields Limited (JO:GFIJ): The gold mining company announced that it has entered into a definitive agreement with Osisko Mining, to acquire all the issued and outstanding common shares in Osisko, which are admitted to listing and trading on the Toronto Stock Exchange, pursuant to a plan of arrangement. Under the agreement, the company has agreed to acquire the Osisko Shares at a price of C$4.90 per share in cash with a transaction consideration of approximately C$2.16bn ($1.57bn) on a fully diluted basis and enterprise value of C$1.48bn ($1.08b).
- Sasol Limited (JO:SOLJ): The chemicals company, in its FY24 trading update, revealed that it expects adjusted EBITDA to be between 2.0% and 17.0%, lower as compared with R66.30bn recorded in the previous year. Moreover, the company announced that it expects basic loss per share to be between R68.82 and R71.48, compared with an EPS of R14.00 recorded in the prior year. Also, it expects HEPS to be between 59.0% to 77.0%, lower as compared with R53.75 recorded in the previous year. Furthermore, the company intends to release its financial results for the year ended 30 June 2024 on 20 August 2024.
- Italtile Limited (JO:ITEJ): The tiles and sanitary ware company, in its FY24 sales and voluntary update, revealed that retail division’s like-on-like sales decreased 2.0%, as compared with the prior year. Ceramic and Ezee Tile’s combined manufacturing sales decreased by 6.0%, as compared with the previous year. While Ceramic reported lower volumes and profits, Ezee Tile grew both metrics after completing commissioning of the new Vulcania facility. Moreover, the company expects its diluted EPS to be 5.6% to 11.1% lower as compared with 132.60c recorded in the prior year. HEPS is expected to be 4.7% and 10.3% lower as compared with 132.30c recorded in the previous year.
- Montauk Renewable Inc (JO:MKRJ): The renewable energy company, in its 1H24 results, reported that total operating revenues rose to $82.13mn from $72.41mn posted in the corresponding period of the previous year. Its diluted EPS stood at $0.01, compared with a loss per share of $0.02 recorded in the corresponding period of the previous year.
- Hyprop Investments Limited (JO:HYPJ): The real estate investment trust company announced that it has concluded its strategic initiative to reduce exposure to Sub-Saharan Africa by selling its interests in Ikeja City Mall in Nigeria and several malls in Ghana to Lango Real Estate Limited. The transaction includes the sale of its shares in Gruppo Investment and AttAfrica Limited for a combined purchase price of approximately $59.30mn, payable via class A shares in Lango. This move aligns with the company’s strategy to focus on South African and Eastern European markets and would release the company from existing guarantees with lenders. The transaction is subject to various conditions and regulatory approvals and does not require shareholder approval.
- Super Group Limited (JO:SPGJ): The betting and gaming company, in its trading and operational update, revealed that it expects EPS to be between 94.0% to 104.0%, lower as compared with 480.90c recorded in the previous year. Also, it expects HEPS to be between 20.0% to 30.0%, lower as compared with 477.50c recorded in the previous year.
- Emira Property Fund Limited (JO:EMIJ): The real estate investment trust company announced that it has entered into a series of agreements with DL Invest Group 1 SCSP and its wholly-owned subsidiary, DL Invest Group S.A. in terms of which it would acquire an effective 25.0% interest in the issued shares of DL Invest and has been granted an option to acquire a further interest in DL Invest which, if exercised, will result in Emira owning 45.0% of the issued shares of DL Invest. The transaction involves Emira subscribing to new shares and loan notes for a total of EUR55.50mn, conditional upon shareholder approval. The second tranche, which requires Emira to exercise an option by January 2025, could further increase its holding.
- Merafe Resources Limited (JO:MRFJ): The mining company, in its 1H24 results, reported that revenue declined to R4.74bn from R4.76bn posted in the corresponding period of the previous year. Its diluted EPS fell 31.4% from the same period of the prior year to 28.80c.
- Clicks (JO:CLSJ) names JJ Njeke as incoming Chair: Clicks has named Mfundiso “JJ” Njeke, a former Chair of the SA Institute of Chartered Accountants, as its Chair.