SOUTH AFRICA MARKET REVIEW
- South African markets closed in the green yesterday, as global market sentiment improved following a smaller-than-expected increase in US producer price inflation.
- Gold miners, DRD Gold (JO:DRDJ), Harmony Gold Mining Co. (JO:HARJ), AngloGold Ashanti (JO:ANGJ) and Sibanye Stillwater (JO:SSWJ) advanced 4.7%, 4.3%, 3.3% and 2.1%, respectively.
- Insurance companies, Santam (JO:SNTJ), Sanlam (JO:SLMJ), Discovery and Old Mutual (JO:OMUJ) gained 4.7%, 1.8%, 1.4% and 1.3%, respectively.
- Property dealers, Fairvest (JO:FTAJ), Hyprop Investments (JO:HYPJ), SA Corporate Real Estate Fund (JO:SACJ) and Emira Property Fund (JO:EMIJ) advanced 3.2%, 2.0%, 1.9% and 1.7%, respectively.
- Banks, Nedbank Group (JO:NEDJ), Capitec Bank Holdings (JO:CPIJ), Absa Group (JO:ABGJ) and FirstRand (JO:FSRJ) added 1.8%, 1.3%, 1.0% and 0.9%, respectively.
- The JSE All Share index advanced 0.5% to close at 80,956.25.
UK MARKET REVIEW
- The UK market finished firmer yesterday, supported by gains in insurers sectors stocks, alongside positive domestic economic data.
- Insurance companies, Old Mutual (LON:OMU), Admiral Group (LON:ADML), Legal & General Group (LON:LGEN), Aviva (LON:AV) and Prudential (LON:PRU) advanced 2.4%, 2.2%, 1.0%, 0.9% and 0.7%, respectively.
- Real estate companies, Persimmon (LON:PSN), Berkeley Group Holdings (LON:BKGH), Barratt Developments (LON:BDEV) and British Land Co. (LON:BLND), surged 2.1%, 1.2%, 0.8% and 0.7%, respectively.
- Retailers, J Sainsbury (LON:SBRY), Associated British Foods (LON:ABF) and Tesco (LON:TSCO) rose 1.7%, 0.7% and 0.5%, respectively.
- On the flipside, miners, Antofagasta (LON:ANTO), Glencore (LON:GLEN) and BHP Group (LON:BHPB) (JO:BHPJ) shed 2.2%, 1.2% and 0.7%, respectively.
- The FTSE 100 index advanced 0.3% to close at 8,235.23.
US MARKET REVIEW
- US markets ended higher yesterday, as a softer producer price data increased expectations for a Federal Reserve (Fed) rate cut in September.
- Beverage retailing company, Starbucks Corporation (NASDAQ:SBUX) skyrocketed, a beverage retailing company, soared 24.5% following the announced the appointment of Brian Niccol as chairman and CEO.
- Digital media company, BuzzFeed (NASDAQ:BZFD) surged 25.9%, after reporting a significant improvement in second-quarter earnings, reducing its net loss to $6.6mn.
- Home improvement company, Home Depot (NYSE:HD) added 1.2%. Meanwhile, the company projected a drop in its annual profit and annual comparable sales.
- The S&P 500 index rose 1.7% to settle at 5,434.43, while the DJIA index advanced 1.0% to close at 39,765.64.
- The NASDAQ index climbed 2.4% to end the trading session at 17,187.61.
ASIA MARKET REVIEW
- Asian markets are trading mostly higher this morning, following overnight gains on Wall Street.
- In Japan, furniture company, Nitori Holdings Co. (TYO:9843) has dropped 2.4%.
- On the flipside, heavy-industry manufacturing company, IHI Corporation (TYO:7013) has gained 3.6%.
- In Hong Kong, pharmaceutical company, Sinopharm Group (HK:1099) Co. has shed 2.2%.
- On the other hand, photovoltaic glass manufacturing company, Xinyi Solar Holdings (HK:0968) has advanced 1.5%.
- In South Korea, electronics company, Samsung Electronics (KS:005930) has advanced 1.8%.
- On the contrary, insurance company, DB Insurance (KS:005830) Co. has shed 4.7%.
- The Nikkei 225 index is trading 0.2% higher at 36,299.50.
- The Hang Seng index has declined 0.4% to trade at 17,111.43, while the Kospi index is trading 0.7% higher at 2,640.61.
COMMODITIES
- At 05:30 SAST today, Brent prices rose 0.4% to trade at $81/bl, driven by a decrease in in crude oil inventories
- Yesterday, Brent prices dropped by 2.0% to settle at $80.69/bl, as concerns over Middle East tensions subsided. Additionally, the American Petroleum Institute (API) reported a decline of 5.21mn bls in US crude oil inventories in the week ended 9 August 2024.
- At 05:30 SAST today, gold prices declined 0.1% to trade at $2,461.40/oz. Yesterday, gold declined 0.5% to close at $2,464.18/oz.
- Yesterday, copper declined 0.9% to close at $8,831.65/mt. Aluminium closed 1.0% higher at $2,332.00/mt.
CURRENCIES
- Yesterday, the South African rand strengthened against the US dollar. In South Africa, the unemployment rate reached a record high in 2Q24. Separately, in the US, producer price inflation for July rose less than anticipated, with service costs seeing their largest decrease in nearly 1.5 years.
- The yield on benchmark government bonds were mixed yesterday. The yield on the 2030 bond fell to 9.21%, while that for the longer-dated 2040 issue stood at 11.46%.
- At 05:30 SAST, the US dollar is trading 0.2% higher against the South African rand at R18.1467, while the euro is trading 0.1% higher at R19.9288. At 05:30 SAST, the British pound has gained 0.1% against the South African rand to trade at R23.3124.
- Yesterday, the euro declined against most of the major currencies. In Germany, the ZEW investor sentiment index fell more sharply than expected in August, marking its steepest decline in two years. In the eurozone, economic sentiment index dropped more than anticipated in August.
- At 05:30 SAST, the euro marginally slipped against the US dollar to trade at $1.0991, while it has marginally weakened against the British pound to trade at GBP0.8548.
ECONOMIC UPDATES
- In South Africa, the unemployment rate unexpected jumped to 33.5% in 2Q24, compared to 32.9% recorded in the prior quarter.
- In the UK, the ILO unemployment rate unexpectedly fell to 4.2% in June, compared to 4.4% recorded in the previous month.
- In Spain, the consumer price index (CPI) dropped 0.5% on a MoM basis in July, in line with market expectations and compared to a rise of 0.4% recorded in the prior month.
- In Germany, the ZEW economic sentiment index dropped to a level of 19.20 in August, more than market expectations for a drop to a level of 38.00. The ZEW economic sentiment index had recorded a level of 41.80 in the previous month.
- In the eurozone, the ZEW economic sentiment index declined to a level of 17.90 in August, more than market expectations for a drop to a level of 35.40. The ZEW economic sentiment index had recorded a level of 43.70 in the previous month.
- In the US, the producer price index (PPI) rose 0.1% on a MoM basis in July, in line with market expectations and compared to a rise of 0.2% recorded in the previous month.
- In the US, the NFIB business optimism index rose to a level of 93.70 in July, more than market expectations for a rise to a level of 91.70. The NFIB business optimism index had recorded a level of 91.50 in the prior month.
CORPORATE UPDATES
SOUTH AFRICA
- Santam Limited (JO:SNTJ): The insurance company, in its 1H24 trading update, revealed that it expects EPS and HEPS to be 25.0% to 45.0%, higher as compared with 1,170.00c recorded in the previous year. The increase is attributable to improved underwriting results for conventional insurance business as well as earnings growth at the alternative risk transfer businesses. The net underwriting margin for conventional insurance business is expected to be within the long-term target range of 5% to 10% of net earned premiums, despite significant weather-related catastrophes and other large losses.
- Sasol Limited (JO:SOLJ): The chemicals company announced the appointment of Mr Walt Bruns as Chief Financial Officer (CFO) and Executive Director, effective 1 September 2024, replacing Mr Hanré Rossouw.