Market Review, Commodities, Currencies, Economic & Corporate Update - 14.09.23

  • Market Overview

South Africa Market Review

  • South African markets closed in the red yesterday, as investors assessed the US consumer inflation data.
  • Property developers, NEPI Rockcastle N.V. (JO: NRPJ ), Growthpoint Properties (JO: GRTJ ) and Redefine Properties (JO: RDFJ ) dropped 6.7%, 1.3% and 0.9%, respectively.
  • Lenders, Standard Bank Group (JO: SBKJ ), Nedbank Group (JO: NEDJ ) and FirstRand (JO: FSRJ ) shed 4.6%, 1.3% and 1.1%, respectively.
  • Gold miners, AngloGold Ashanti (JO: ANGJ ) and Gold Fields (JO: GFIJ ) declined 1.7% and 1.0%, respectively.
  • On the flipside, retailers, SPAR Group (JO: SPPJ ), Lewis Group (JO: LEWJ ) and Cashbuild (JO: CSBJ ) advanced 2.2%, 2.1% and 1.2%, respectively.
  • Platinum miners, Anglo American Platinum (JO: AMSJ )  and Impala Platinum (JO: IMPJ ) gained 1.8% and 1.5%, respectively.
  • The JSE All Share index declined 1.1% to close at 73,302.56.

UK Market Review

  • The UK market finished weaker yesterday, as weaker domestic GDP data fuelled recessionary concerns.
  • Retailers, Ocado Group (LON: OCDO ), JD Sports Fashion (LON: JD ), B&M European Value Retail S.A. (LON: BMEB ) and Next (LON: NXT ) dropped 4.1%, 2.5%, 2.0% and 1.4%, respectively.
  • Energy company, BP (LON: BP ) shed 2.8%, after the company announced that its Chief Executive Officer (CEO) Bernard Looney has resigned with immediate effect.
  • On the other hand, insurance company, Aviva (LON: AV ) advanced 4.6%, after the company agreed to divest its 25.9% stake in Singapore Life Holdings along with two debt instruments to Sumitomo Life for a combined GBP800.00mn ($997.00mn).
  • Property developers, Persimmon (LON: PSN ), Berkeley Group Holdings (LON: BKGH ) and Barratt Developments (LON: BDEV ) climbed 4.0%, 2.5% and 2.2%, respectively.
  • The FTSE 100 index marginally declined to close at 7,525.99.

US Market Review

  • US markets ended mostly higher yesterday, after a moderate rise in consumer inflation data reinforced expectations that the US Federal Reserve (Fed) would keep its interest rates unchanged in September.
  • Pharmaceutical company, Moderna (NASDAQ: MRNA ) advanced 3.2%, after the company’s flu vaccine mRNA-1010 met the primary goal in late-stage trial.
  • Further, the company announced that the Centers for Disease Control and Prevention recommended updated Covid-19 vaccines to all Americans aged 6 years or older.
  • Banking company, Citigroup (NYSE: C ) gained 1.7%, after the company announced plans to revamp its top management structure.
  • The S&P 500 index rose 0.1% to settle at 4,467.44, while the DJIA index declined 0.2% to close at 34,575.53.
  • The NASDAQ index climbed 0.3% to end the trading session at 13,813.59.

Asia Market Review

  • Asian markets are trading mostly higher this morning.
  • In Japan, semiconductor manufacturing company, Renesas Electronics (TYO: 6723 ) has advanced 3.1%.
  • On the flipside, pharmaceutical company, Chugai Pharmaceutical (TYO: 4519 ) has declined 1.7%.
  • In Hong Kong, insurance company, AIA Group (HK: 1299 ) has dropped 1.6%.
  • On the other hand, real estate company, Hang Lung Properties (OTC: HLPPY ) has gained 1.8%.
  • In South Korea, chemical company, Hansol Chemical (KS: 014680 ) has gained 9.7%.
  • On the contrary, paper company, Shin Poong Paper Manufacturing (KS: 002870 ) has shed 10.4%.
  • The Nikkei 225 index is trading 1.0% higher at 33,049.01.
  • The Hang Seng index has dropped 0.4% to trade at 17,944.88, while the Kospi index is trading 0.9% higher at 2,556.20.

Commodities

  • At 05:30 SAST today, Brent prices rose 0.4% to trade at $92.23/bl.
  • Yesterday, Brent prices fell 0.2% to settle at $91.88/bl, following a rise in the US crude oil inventories. The US Energy Information Administration (EIA) reported that the US crude inventories advanced by 3.95mn bls in the week ended 8 September 2023.
  • At 05:30 SAST today, gold prices advanced 0.2% to trade at $1,909.28/oz. Yesterday, gold declined 0.4% to close at $1,906.30/oz, as strength in the greenback dented demand for the safe haven yellow metal.
  • Yesterday, copper rose 0.2% to close at $8,353.00/mt. Aluminium closed 1.0% higher at $2,217.35/mt.

Currencies

  • Yesterday, the South African rand strengthened against the US dollar. In the US, the consumer price index (CPI) rose in line with expectations in August, amid surge in gasoline prices. Moreover, the number of MBA mortgage applications declined in the week ended 8 September 2023.
  • The yield on benchmark government bonds were mixed yesterday. The yield on 2030 bond rose to 10.41%. Further, the yield on the longer-dated 2040 issue remained unchanged at 12.61%.
  • At 05:30 SAST, the US dollar is trading 0.2% lower against the South African rand at R18.7936, while the euro is trading marginally higher at R20.1907. At 05:30 SAST, the British pound has declined 0.1% against the South African rand to trade at R23.4789.
  • Yesterday, the euro declined against most of the major currencies. In the eurozone, industrial production declined for the first time in four months in July, amid drop in capital goods and durable consumer goods output. In the UK, gross domestic product (GDP) dropped in June.
  • At 05:30 SAST, the euro advanced 0.1% against the US dollar to trade at $1.0745, while it has gained 0.1% against the British pound to trade at GBP0.8602.

Economic Updates

  • In the UK, gross domestic product (GDP) dropped 0.5% on a MoM basis in July, more than market expectations for a drop of 0.2%. GDP had advanced 0.5% in the prior month.
  • In the UK, the RICS housing price balance dropped to -68.0% in August, compared to -53.0% recorded in the previous month.
  • In the UK, industrial production dropped 0.7% on a MoM basis in July, more than market expectations and compared to a rise of 1.8% recorded in the prior month.
  • In the UK, manufacturing production declined 0.8% on a MoM basis in July, compared to a rise of 2.4% in the previous month. Markets were expecting manufacturing production to drop 1.0%.
  • In the UK, total trade deficit narrowed to GBP3.45 bn in July, compared to a deficit of GBP4.79 bn recorded in the previous month.
  • In the eurozone, industrial production dropped 1.1% on a MoM basis in July, more than market expectations for a drop of 0.7%. Industrial production had recorded a revised rise of 0.4% in the prior month.
  • In the US, the MBA mortgage applications fell 0.8% in the week ended 8 September 2023, compared to a drop of 2.9% recorded in the previous week.
  • In the US, the consumer price index (CPI) rose 0.6% on a MoM basis in August, in line with expectations. The CPI had advanced 0.2% in the previous month.
  • In Australia, the unemployment rate remained unchanged at 3.7% in August, in line with expectations.

Corporate Updates

South Africa

  • Growthpoint Properties Limited (JO: GRTJ ): The real estate company, in its FY23 results, reported that total revenues advanced 5.3% from the preceding year to R13.74bn. Its diluted EPS stood at 68.87c, compared with 232.14c recorded in the previous year.
  • Pan African Resources Plc (JO: PANJ ): The mining company, in its annual results for the period ended 30 June 2023, indicated that its revenue fell to $321.61mn from $376.31mn posted in the previous year. Its basic and diluted EPS decreased 18.2% from the prior year to 3.19 US cents.
  • Attacq Limited (JO: ATTJ ): The real estate investment trust company, in its FY23 trading update, revealed that it expects distributable income per share (DIPS) to be between 70.70c and 72.20c, as compared with 62.80c recorded in the previous year. Moreover, the company intends to release its annual results on 28 September 2023.
  • Oil nears 10-month peak on supply cuts: Oil rose, firming its ground near a 10-month peak reached during trading a day earlier, as the market balanced supply concerns over Libya output and OPEC+ cuts with global macroeconomic headwinds.

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