Market Review, Commodities, Currencies, Economic & Corporate Update - 13.11.23

  • Market Overview

SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the red on Friday, as investors assessed hawkish comments from US Federal Reserve Chairman Jerome Powell.
  • Platinum miners, Impala Platinum (JO: IMPJ ), Anglo American Platinum (JO: AMSJ ) and Northam Platinum (JO: NPHJ ) dropped 9.2%, 6.2% and 5.6%, respectively.
  • Gold miners, AngloGold Ashanti (JO: ANGJ ) and Gold Fields (JO: GFIJ ) declined 6.3% and 3.2%, respectively.
  • On the flipside, retailers, SPAR Group (JO: SPPJ ), Shoprite Holdings (JO: SHPJ ) and Mr Price Group (JO: MRPJ ) advanced 2.8%, 1.9% and 1.0%, respectively.
  • Property developers, NEPI Rockcastle N.V. (JO: NRPJ ), Resilient REIT (JO: RESJ ) and Emira Property Fund (JO: EMIJ ) rose 1.6%, 1.5% and 1.2%, respectively.
  • Lenders, Capitec Bank Holdings (JO: CPIJ ), FirstRand (JO: FSRJ ) and Standard Bank (JO: SBKJ ) gained 1.4%, 0.8% and 0.6%, respectively.
  • The JSE All Share index declined 1.2% to close at 79,393.30.

UK MARKET REVIEW

  • The UK market finished weaker on Friday, as dismal British GDP data for 3Q23 dented investor sentiment.
  • Beverage company, Diageo (LON: DGE ) plunged 12.2%, after the company forecasted a drop in 1H24 operating profit citing "materially weaker performance" in Latin America and the Caribbean.
  • Retailers, Ocado Group (LON: OCDO ) and Burberry Group (LON: BRBY ) dropped 5.6% and 2.4%, respectively.
  • Miners, Fresnillo (LON: FRES ) and Antofagasta (LON: ANTO ) dropped 4.9% and 1.9%, respectively.
  • Insurance companies, Prudential (LON: PRU ), Legal & General Group (LON: LGEN ) and Aviva (LON: AV ) fell 2.2%, 1.1% and 0.8%, respectively.
  • Banking firms, NatWest Group (LON: NWG ), Lloyds Banking Group (LON: LLOY ), Barclays (LON: BARC ) and Standard Chartered (LON: STAN ) shed 1.9%, 1.3%, 1.0% and 0.9%, respectively.
  • The FTSE 100 index declined 1.3% to close at 7,360.55.

US MARKET REVIEW

  • US markets ended higher on Friday, boosted by gains in technology sector stocks.
  • Biotechnology company, Illumina (NASDAQ: ILMN ) plunged 8.1%, after the company cut its annual sales and profit forecast.
  • Technology companies, Intel (NASDAQ: INTC ), Microsoft (NASDAQ: MSFT ), Apple (NASDAQ: AAPL ) and Salesforce (NYSE: CRM ) dropped 2.8%, 2.5%, 2.3% and 1.7%, respectively.
  • Financial services companies, Visa (NYSE: V ) and JP Morgan Chase (NYSE: JPM ) each declined 1.3%.
  • On the contrary, energy companies, Devon Energy Corporation (NYSE: DVN ), Diamondback Energy (NASDAQ: FANG ), Exxon Mobil Corporation (NYSE: XOM ) and Chevron Corporation (NYSE: CVX ) advanced 3.4%, 1.4%, 0.8% and 0.7%, respectively.
  • The S&P 500 index rose 1.6% to settle at 4,415.24, while the DJIA index advanced 1.2% to close at 34,283.10.
  • The NASDAQ index climbed 2.1% to end the trading session at 13,798.11.

ASIA MARKET REVIEW

  • Asian markets are trading mostly higher this morning, tracking gains in their US peers.
  • In Japan, automobile company, Isuzu Motors (TYO: 7202 ) has surged 7.2%.
  • On the flipside, chemical company, Nissan Chemical (TYO: 4021 ) has plunged 7.4%.
  • In Hong Kong, consumer electronics company, Lenovo Group (HK: 0992 ) has advanced 4.6%.
  • On the other hand, sports products company, Anta Sports Products (HK: 2020 ) has declined 1.2%.
  • In South Korea, paper company, Young Poong Paper Manufacturing Company (KS: 006740 ) has shed 5.4%.
  • On the contrary, departmental store company, Daegu Department Store (KS: 006370 ) has soared 9.9%.
  • The Nikkei 225 index is trading 0.6% higher at 32,750.41.
  • The Hang Seng index has declined 0.3% to trade at 17,151.69, while the Kospi index is trading 0.1% lower at 2,406.27.

COMMODITIES

  • At 05:30 SAST today, Brent prices fell 0.9% to trade at $80.69/bl.
  • On Friday, Brent prices rose 1.8% to settle at $81.43/bl, as Iraq supported oil cuts from the OPEC+. Additionally, Baker Hughes reported that oil rigs count fell by 2 to 494 in the week ended 10 November 2023.
  • At 05:30 SAST today, gold prices declined 0.1% to trade at $1,934.90/oz. On Friday, gold declined 1.1% to close at $1,936.79/oz, as hawkish comments from US Fed Jerome Powell dented demand for the safe haven yellow metal.
  • On Friday, copper declined 0.3% to close at $8,005.60/mt. Aluminium closed 1.3% lower at $2,215.00/mt.

CURRENCIES

  • On Friday, the South African rand weakened against the US dollar. In the US, the Michigan consumer sentiment index dropped to a six-month low in November.
  • The yield on benchmark government bonds rose on Friday. The yield on 2030 bond advanced to 10.41% while that for the longer-dated 2040 issue rose to 12.49%.
  • At 05:30 SAST, the US dollar is trading 0.2% higher against the South African rand at R18.7684, while the euro is trading 0.2% higher at R20.0497. At 05:30 SAST, the British pound has gained 0.3% against the South African rand to trade at R22.9432.
  • On Friday, the euro advanced against most of the major currencies. In the UK, the GDP stagnated in 3Q23 as higher interest rates reduced spending and investment. Meanwhile, manufacturing production rose more than expected in September.
  • At 05:30 SAST, the euro marginally slipped against the US dollar to trade at $1.0683, while it has marginally weakened against the British pound to trade at GBP0.874.

ECONOMIC UPDATES

  • In the UK, goods trade deficit narrowed to GBP14.29bn in September, compared to a revised deficit of GBP15.52bn recorded in the previous month.
  • In the UK, gross domestic product (GDP) unexpectedly rose 0.2% on a MoM basis in September, compared to a revised rise of 0.1% in the prior month.
  • In the UK, GDP recorded a flat reading in Q3 2023, compared to a rise of 0.2% in the previous quarter.
  • In the UK, industrial production unexpectedly remained flat on a MoM basis in September, compared to a revised drop of 0.5% recorded in the previous month.
  • In the UK, manufacturing production rose 0.1% on a MoM basis in September, less than market expectations for a rise of 0.3%. Manufacturing production had declined by a revised 0.7% in the previous month.
  • In the UK, total trade deficit narrowed to GBP1.57bn in September, compared to a revised deficit of GBP4.83bn recorded in the previous month.
  • In the US, the Michigan consumer sentiment index fell to a level of 60.40 in November, more than market expectations for a fall to a level of 63.70. The Michigan consumer sentiment index had recorded a level of 63.80 in the prior month.
  • In Japan, the producer price index (PPI) rose 0.8% on a YoY basis in October, less than market expectations for a rise of 0.9%. The PPI had advanced 2.0% in the prior month.

Corporate Updates

South Africa

  • Cie Financiere Richemont SA (JO: CFRJ ): The retail company, in its 1H24 results, reported that its revenue advanced 5.6% from the same period of the preceding year to EUR10.22bn. Its diluted EPS stood at EUR3.73, compared to EUR3.67 recorded in the corresponding period of the previous year.
  • Foschini Group Limited (JO: TFGJ ): The retail company, in its 1H23 results, indicated that revenues rose to R28.40bn from R25.16bn posted in the corresponding period of the previous year. Its diluted EPS declined to 384.00c from the same period of the prior year.
  • RFG Holdings Limited (JO: RFGJ ): The food company, in its trading update for the year ended 1 October 2023, revealed that it expects EPS to be 30.0% to 35.0% higher compared to 137.90c recorded in the previous year. Also, it expects HEPS to be 33.0% to 38.0% higher compared to 137.90c recorded in the previous year.
  • Transaction Capital (JO: TCPJ ) wins back some lost ground, boosted by broker upgrade: Transactional Capital has rebounded 37.0% over the past two weeks, suggesting that investors are giving management the benefit of the doubt as they go about fixing the group’s troubled SA taxi business.

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