Market Review, Commodities, Currencies, Economic & Corporate Update - 16.10.23

  • Market Overview

SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the red on Friday, amid sell-off in industrial sector stocks.
  • Retailer, Pick ‘n Pay (JO: PIKJ ) dropped 5.4%, to its lowest level since 2009, ahead of its financial results.
  • Peers, SPAR Group (JO: SPPJ ), Shoprite Holdings (JO: SHPJ ) and Clicks Group (JO: CLSJ ) shed 3.9%, 2.6% and 1.3%, respectively.
  • Lenders, Capitec Bank Holdings (JO: CPIJ ), FirstRand (JO: FSRJ ) and Standard Bank Group (JO: SBKJ ) eased 1.7%, 0.6% and 0.5%, respectively.
  • On the flipside, platinum miners, Impala Platinum (JO: IMPJ ), Anglo American Platinum (JO: AGLJ ) and Northam Platinum (JO: NHMJ ) advanced 6.1%, 4.4% and 4.3%, respectively.
  • Gold miners, Gold Fields (JO: GFIJ ) and AngloGold Ashanti (JO: ANGJ ) gained 5.3% and 3.1%, respectively.
  • The JSE All Share index declined 0.6% to close at 72,919.72.

UK MARKET REVIEW

  • The UK market finished weaker on Friday, amid concerns over global economic growth and led by losses in financial sector stocks.
  • Investment management company, St James’s Place plummeted 21.8%, following reports that it is under pressure from regulators to change its client fee structure to comply with the UK's new Consumer Duty rules.
  • Tobacco company, British American Tobacco (LON: BATS ) (JO: SNHJ ) dropped 3.6%, after the US Food and Drug Administration banned the sale of six flavours of its main vape brand, Vuse Alto.
  • On the other hand, energy companies, BP (LON: BP ) and Shell (LON: RDSa ) advanced 2.2% and 1.5%, respectively, on higher crude prices.
  • Retailer, Next (LON: NXT ) fell 1.1%, after the company agreed to buy FatFace fashion chain for GBP115.20mn ($140.00mn).
  • The FTSE 100 index declined 0.6% to close at 7,599.60.

US MARKET REVIEW

  • US markets ended mostly lower on Friday, on elevated concerns over ongoing geopolitical tensions in the Middle East.
  • Airplane company, Boeing (NYSE: BA ) dropped 3.3%, after the company said it is scrutinising the issues affecting 737 Max 8 aircraft.
  • Investment management company, BlackRock (NYSE: BLK ) eased 1.3%, after the company reported a decline in net inflows in 3Q23.
  • On the contrary, discount chain company, Dollar General Corporation (NYSE: DG ) jumped 9.2%, after it reappointed former Chief Executive Officer (CEO) Todd Vasos to replace CEO Jeff Owen.
  • Healthcare company, United Health Group (NYSE: UNH ) advanced 2.6%, after the company reported upbeat 3Q23 results.
  • The S&P 500 index fell 0.5% to settle at 4,327.78, while the DJIA index advanced 0.1% to close at 33,670.29.
  • The NASDAQ index eased 1.2% to end the trading session at 13,407.23.

ASIA MARKET REVIEW

  • Asian markets are trading lower this morning, amid ongoing Middle East conflict.
  • In Japan, pharmaceutical company, Astellas Pharma (TYO: 4503 ) has shed 3.6%.
  • On the flipside, cement company, Taiheiyo Cement (TYO: 5233 ) has added 0.6%.
  • In Hong Kong, real estate company, Longfor Group Holdings (HK: 0960 ) has declined 3.6%.
  • On the other hand, insurance company, AIA Group (HK: 1299 ) has gained 1.1%.
  • In South Korea, robotics company, Doosan Robotics (KS: 454910 ) has dropped 6.9%.
  • On the contrary, petrochemical company, Korea Petroleum Industrial (KS: 004090 ) has surged 15.8%.
  • The Nikkei 225 index is trading 1.6% lower at 31,786.78.
  • The Hang Seng index has declined 0.5% to trade at 17,721.66, while the Kospi index is trading 1.3% lower at 2,424.88.

COMMODITIES

  • At 05:30 SAST today, Brent prices marginally rose to trade at $90.90/bl.
  • On Friday, Brent prices rose 5.7% to settle at $90.89/bl, as geo-political concerns rose after Israel began ground raids inside the Gaza Strip. Meanwhile, Baker Hughes reported that the US oil rigs count rose by 4 to 501 in the week ended 13 October 2023.
  • At 05:30 SAST today, gold prices declined 0.6% to trade at $1,919.33/oz. On Friday, gold gained 3.3% to close at $1,931.70/oz, as elevated Middle East tensions boosted demand for the safe haven yellow metal.
  • On Friday, copper declined 1.5% to close at $7,875.85/mt. Aluminium closed 0.3% lower at $2,194.00/mt.

CURRENCIES

  • On Friday, the South African rand strengthened against the US dollar. In the US, the Michigan consumer sentiment index sharply declined in October.
  • The yield on benchmark government bonds rose on Friday. The yield on the 2030 bond advanced to 10.73% while that for the longer-dated 2040 issue rose to 12.88%.
  • At 05:30 SAST, the US dollar is trading 0.1% lower against the South African rand at R18.9996, while the euro is trading marginally higher at R19.9897. At 05:30 SAST, the British pound has declined 0.2% against the South African rand to trade at R23.0866.
  • On Friday, the euro mostly declined against most of the major currencies. In the eurozone, seasonally adjusted industrial production rose more than expected in August, amid rebound in capital goods and durable consumer goods output.
  • At 05:30 SAST, the euro advanced 0.1% against the US dollar to trade at $1.0523, while it has marginally gained against the British pound to trade at GBP0.8658.

ECONOMIC UPDATES

  • In the UK, the Rightmove house price index rose 0.5% on a MoM basis in October, compared to a rise of 0.4% recorded in the previous month.
  • In Spain, the consumer price index (CPI) rose 0.2% on a MoM basis in September, in line with market expectations.
  • In the eurozone, seasonally adjusted industrial production rose 0.6% on a MoM basis in August, more than market expectations for a rise of 0.1%. Industrial production had declined 1.1% in the prior month.
  • In the US, the Michigan consumer sentiment index dropped to a level of 63.00 in October, more than market expectations and compared to a level of 68.10 recorded in the previous month.

CORPORATE UPDATES

SOUTH AFRICA

  • Oil rises after US tightens sanctions on Russian crude: Oil prices jumped $2 after the US tightened its sanctions programme against Russian crude exports, raising supply concerns in an already tight market, and global inventories are forecast to decline through the fourth quarter.

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