Market Review, Commodities, Currencies, Economic & Corporate Update - 15.11.23

  • Market Overview

SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the green yesterday, following better than expected US inflation data.
  • Platinum miners, Anglo American Platinum (JO: AMSJ ), Impala Platinum (JO: IMPJ ) and Northam Platinum (JO: NPHJ ) jumped 7.8%, 5.6% and 2.5%, respectively.
  • Gold miners, Harmony Gold Mining (JO: HARJ ), AngloGold Ashanti (JO: ANGJ ) and Gold Fields (JO: GFIJ ) climbed 7.0%, 3.8% and 2.3%, respectively.
  • Diversified miners, Kumba Iron Ore (JO: KIOJ ), African Rainbow Minerals (JO: ARIJ ) and Anglo American (JO: AGLJ ) advanced 6.1%, 5.7% and 5.6%, respectively.
  • Retailers, Foschini Group (JO: TFGJ ), Cashbuild (JO: CSBJ ) and Clicks Group (JO: CLSJ ) gained 5.3%, 4.4% and 1.3%, respectively.
  • Lenders, Nedbank Group (JO: NEDJ ), FirstRand (JO: FSRJ ), Standard Bank Group (JO: SBKJ ) and Capitec Bank Holdings (JO: CPIJ ) added 3.1%, 2.8%, 1.9% and 1.6%, respectively.
  • The JSE All Share index advanced 2.5% to close at 73,443.50.

UK MARKET REVIEW

  • The UK market finished firmer yesterday, as cooler-than-expected US inflation data boosted investor sentiment.
  • Informa advanced 5.3%, after the company raised its annual revenue and profit guidance.
  • Miner, Glencore (JO: GLNJ ) rose 4.5%, after it agreed to purchase a 77.0% stake in Teck Resources' steelmaking coal business for a cash consideration of $6.93bn.
  • On the other hand, telecommunications company, Vodafone (LON: VOD ) dropped 5.5%, after the company said it was considering a range of options for its Italian business, the last of the "challenging" markets.
  • Aerospace and defence company, Rolls Royce Holdings (LON: RR ) fell 0.5%, after Emirates' President Tim Clark challenged the company to improve its durability and lower maintenance costs.
  • The FTSE 100 indexadvanced 0.2% to close at 7,440.47.

US MARKET REVIEW

  • US markets ended higher yesterday, as a softer US inflation report boosted expectations for a pause in rate hikes by the US Federal Reserve.
  • Social media company, Snap (NYSE: SNAP ) jumped 7.5%, amid news that the company had struck a deal with Amazon (NASDAQ: AMZN ) to let users buy certain products via the Snapchat app.
  • Home improvement company, Home Depot (NYSE: HD ) advanced 5.4%, after the company reported better than expected earnings in 3Q23.
  • Financial services companies, Goldman Sachs Group (NYSE: GS ), JP Morgan Chase (NYSE: JPM ), American Express (NYSE: AXP ) and Visa (NYSE: V ) rose 3.6%, 1.8%, 1.7% and 0.9%, respectively.
  • The S&P 500 index rose 1.9% to settle at 4,495.70, while the DJIA index advanced 1.4% to close at 34,827.70.
  • The NASDAQ index climbed 2.4% to end the trading session at 14,094.38.

ASIA MARKET REVIEW

  • Asian markets are trading higher this morning, tracking overnight gains on Wall Street.
  • In Japan, banking company, SoftBank Group (TYO: 9984 ) has advanced 4.8%.
  • On the flipside, life insurance company, Dai-ichi Life Holdings (TYO: 8750 ) has declined 3.1%.
  • In Hong Kong, real estate company, Longfor Group Holdings (HK: 0960 ) has climbed 7.0%.
  • Banking company, Bank of China has added 1.1%. In South Korea, automotive parts company, Seoyonehwa (KS: 200880 ) has surged 15.3%.
  • On the contrary, steel company, TCC Steel Corporation (KS: 002710 ) has dropped 4.9%. The Nikkei 225 index is trading 2.0% higher at 33,341.56.
  • The Hang Seng index has advanced 2.8% to trade at 17,886.75, while the Kospi index is trading 2.0% firmer at 2,482.25.

COMMODITIES

  • At 05:30 SAST today, Brent prices rose 0.3% to trade at $82.73/bl.
  • Yesterday, Brent prices fell 0.1% to settle at $82.47/bl, amid rise in the US crude oil inventories. The American Petroleum Institute (API) reported that crude oil inventories rose by 1.34mn bls in the week ended 10 November 2023.
  • At 05:30 SAST today, gold prices advanced 0.2% to trade at $1,965.72/oz. Yesterday, gold gained 0.9% to close at $1,962.54/oz, as a weaker dollar and a drop in the US Treasury yields boosted demand for the safe haven yellow metal.
  • Yesterday, copper marginally declined to close at $8,080.50/mt. Aluminium closed 0.6% higher at $2,234.51/mt.

CURRENCIES

  • Yesterday, the South African rand strengthened against the US dollar. In South Africa, the unemployment rate declined in 3Q23. Separately, in the US, consumer price inflation slowed in October. Moreover, the NFIB business optimism index declined in October.
  • The yield on benchmark government bonds fell yesterday. The yield on 2030 bond declined to 10.21% while that for the longer-dated 2040 issue fell to 12.31%.
  • At 05:30 SAST, the US dollar is trading marginally lower against the South African rand at R18.2151, while the euro is trading marginally higher at R19.8292. At 05:30 SAST, the British pound has declined marginally against the South African rand to trade at R22.7688.
  • Yesterday, the euro mostly declined against most of the major currencies. In Germany, the ZEW economic sentiment index advanced more than expected in November. Moreover, the ZEW current situation index rose less than expected in November. In the eurozone, GDP declined in 3Q23. Meanwhile, in the UK, the ILO unemployment rate remained unchanged in September.
  • At 05:30 SAST, the euro marginally slipped against the US dollar to trade at $1.0879, while it has gained 0.1% against the British pound to trade at GBP0.8711.

ECONOMIC UPDATES

  • In South Africa, the unemployment rate fell to 31.9% in 3Q23, compared to a rate of 32.6% recorded in the previous month.
  • In the UK, the ILO unemployment rate remained unchanged at 4.2% in September.
  • In Spain, the consumer price index (CPI) rose 0.3% on a MoM basis in October, more than market expectations for a rise of 0.2%. The CPI had advanced 0.2% in the prior month.
  • In Germany, the ZEW current situation index rose to a level of -79.80 in November, less than market expectations for a rise to a level of -76.70. The ZEW current situation index had recorded a level of -79.90 in the previous month.
  • In Germany, the ZEW economic sentiment index advanced to a level of 9.80 in November, more than market expectations for a rise to a level of 5.00. The ZEW economic sentiment index had recorded a level of -1.10 in the prior month.
  • In the eurozone, gross domestic product (GDP) dropped 0.1% on a QoQ basis in 3Q23, in line with market expectations.
  • In the eurozone, the ZEW economic sentiment rose to a level of 13.80 in November, compared to a level of 2.30 recorded in the previous month.
  • In the US, the NFIB business optimism index fell to a level of 90.70 in October, compared to a level of 90.80 recorded in the previous month.
  • In the US, the CPI rose 3.2% on a YoY basis in October, compared to a rise of 3.7% recorded in the previous month.
  • In Japan, annualised GDP dropped 2.1% in 3Q23, more than market expectations for a drop of 0.6%. GDP had advanced 4.8% in the previous quarter.
  • In China, industrial production rose 4.6% on a YoY basis in October, more than market expectations for a rise of 4.5%. Industrial production had advanced 4.5% in the previous month.
  • In China, retail sales advanced 7.6% on a YoY basis in October, more than market expectations for a rise of 7.0%. Retail sales had recorded a rise of 5.5% in the prior month.

CORPORATE UPDATES

SOUTH AFRICA

  • Santam Limited (JO: SNTJ ): The insurance company, in its operational update for the nine months ended 30 September 2023, revealed that gross written premium increased 4.0% as compared with the previous year. Moreover, the conventional Insurance business achieved net earned premium growth of 7.0%, with strong contributions from all businesses apart from Santam Re. Furthermore, the Santam Client Solutions and Broker Solutions businesses achieved good growth in gross written premium and net earned premium. Santam’s results for the year ending 31 December 2023 are expected to be released on or about 29 February 2024.
  • Netcare Limited (JO: NTCJ ): The healthcare company, in its FY23 trading update, stated that it expects EPS to be between 29.0% to 32.0% higher compared to 72.30c recorded in the previous year. Also, it expects HEPS to be 35.0% to 38.0% higher compared to 74.00c recorded in the previous year.
  • Barloworld Limited (JO: BAWJ ): The industrial brand management company, in its FY23 trading update, stated that it expects basic EPS to be between 12.4% to 15.2% higher as compared with 1,051.90c recorded in the previous year. Also, it expects basic HEPS to be between 26.2% to 27.9% lower as compared with 1,770.80c recorded in the previous year.
  • Oil lifts as energy agency boosts demand growth forecast: Oil prices edged higher after the International Energy Agency (IEA) raised its demand growth forecasts, adding to bullish sentiment from the previous day’s OPEC guidance.

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