Market Review, Commodities, Currencies, Economic & Corporate Update - 17.01.24

  • Market Overview

SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the red yesterday, weighed down by losses in mining sector stocks.
  • Platinum miners, Anglo American Platinum (JO: AMSJ ), Impala Platinum (JO: IMPJ ) and Northam Platinum (JO: NPHJ ) dropped 3.4%, 1.9% and 0.8%, respectively.
  • Diversified miners, Kumba Iron Ore (JO: KIOJ ), African Rainbow Minerals (JO: ARIJ ) and Exxaro Resources (JO: EXXJ ) declined 3.3%, 3.1% and 1.0%, respectively.
  • Gold miners, Harmony Gold Mining (JO: HARJ ), Gold Fields (JO: GFIJ ) and AngloGold Ashanti (JO: ANGJ ) shed 2.8%, 2.4% and 2.3%, respectively.
  • Retailers, Shoprite Holdings (JO: SHPJ ), Clicks Group (JO: CLSJ ), SPAR Group (JO: SPPJ ) and Mr Price Group (JO: MRPJ ) fell 2.6%, 2.4%, 2.1% and 1.0%, respectively.
  • Property developers, Resilient REIT (JO: RESJ ), Growthpoint Properties (JO: GRTJ ) and Burstone Group (JO: BTNJ ) eased 1.4%, 1.2% and 1.1%, respectively.
  • The JSE All Share index declined 0.9% to close at 73,007.63.

UK MARKET REVIEW

  • The UK market finished weaker yesterday, led by losses in mining sector stocks and as investors assessed hawkish remarks from major central banks.
  • Miners, Fresnillo (LON: FRES ) and Glencore (JO: GLNJ ) dropped 4.6% and 1.3%, respectively. Banking firms, Standard Chartered (LON: STAN ), Barclays (LON: BARC ), NatWest Group (LON: NWG ) and Lloyds Banking Group (LON: LLOY ) declined 2.6%, 2.5%, 1.7% and 1.6%, respectively.
  • Insurance companies, Legal & General Group (LON: LGEN ), Prudential (LON: PRU ) and Aviva (LON: AV ) shed 2.0%, 1.3% and 0.6%, respectively.
  • On the other hand, data analytics and consumer credit reporting company, Experian (LON: EXPN ) advanced 2.4%, after the company raised its annual outlook following a 9.0% rise in its 3Q24 revenue.
  • The FTSE 100 index declined 0.5% to close at 7,558.34.

US MARKET REVIEW

  • US markets ended lower yesterday, following hawkish remarks from Federal Reserve Governor Christopher Waller and a surge in Treasury yields.
  • Media and entertainment companies, Warner Bros Discovery (NASDAQ: WBD ) and Netflix (NASDAQ: NFLX ) dropped 2.8% and 2.2%, respectively.
  • Energy companies, Devon Energy Corporation (NYSE: DVN ), Chevron Corporation (NYSE: CVX ) and Exxon Mobil Corporation (NYSE: XOM ) shed 2.6%, 2.4% and 2.3%, respectively.
  • Technology companies, Apple (NASDAQ: AAPL ) and Salesforce (NYSE: CRM ) fell 1.2% and 1.0%, respectively.
  • On the contrary, financial services company, Goldman Sachs Group (NYSE: GS ) gained 0.7%, after the company reported higher profit and revenue in 4Q23.
  • The S&P 500 index fell 0.4% to settle at 4,765.98, while the DJIA index declined 0.6% to close at 37,361.12.
  • The NASDAQ index eased 0.2% to end the trading session at 14,944.35.

ASIA MARKET REVIEW

  • Asian markets are trading mostly lower this morning.
  • In Japan, electronics and automotive systems company, Furukawa Electric (TYO: 5801 ) has advanced 5.7%.
  • On the flipside, pharmaceutical company, Chugai Pharmaceutical (TYO: 4519 ) has declined 2.6%.
  • In Hong Kong, real estate company, Longfor Group Holdings (HK: 0960 ) has dropped 5.2%.
  • Sports products company, Anta Sports Products (HK: 2020 ) declined 4.9%.
  • In South Korea, chemical company, Hanwha Solutions (KS: 009830 ) has plunged 8.5%. logistics company, Dongbang Transport Logistics (KS: 004140 ) has surged 8.3%.
  • The Nikkei 225 index is trading 0.5% higher at 35,810.35.
  • The Hang Seng index is trading 2.7% lower at 15,430.86, while the Kospi index is trading 2.2% lower at 2,443.57.

COMMODITIES

  • At 05:30 SAST today, Brent prices fell 0.5% to trade at $77.91/bl.
  • Yesterday, Brent prices rose 0.2% to settle at $78.29/bl, amid heightened Middle East tensions after the US military carried out a new strike in Yemen against four Houthi anti-ship ballistic missiles.
  • At 05:30 SAST today, gold prices marginally declined to trade at $2,026.90/oz. Yesterday, gold declined 1.3% to close at $2,027.59/oz, as a stronger dollar and a rise in the US Treasury yields dented demand for the safe haven yellow metal.
  • Yesterday, copper declined 0.2% to close at $8,267.85/mt. Aluminium closed 0.4% higher at $2,214.15/mt.

CURRENCIES

  • Yesterday, the South African rand weakened against the US dollar. In the US, the NY Empire State manufacturing index unexpectedly declined in January to its lowest since May 2020.
  • The yield on benchmark government bonds rose yesterday. The yield on the 2030 bond advanced to 9.81%, while that for the longer-dated 2040 issue rose to 12.29%.
  • At 05:30 SAST, the US dollar is trading 0.1% higher against the South African rand at R19.0013, while the euro is trading 0.1% higher at R20.648. At 05:30 SAST, the British pound has marginally gained against the South African rand to trade at R23.9843.
  • Yesterday, the euro mostly advanced against most of the major currencies. In Germany, the consumer price index (CPI) remained unchanged in December, in line with market expectations. Meanwhile, the ZEW economic sentiment index unexpectedly improved in January. In the eurozone, the ZEW economic sentiment declined less than expected in January. In the UK, the ILO unemployment rate remained unchanged in November.
  • At 05:30 SAST, the euro slipped 0.1% against the US dollar to trade at $1.087, while it has marginally gained against the British pound to trade at GBP0.8611.

ECONOMIC UPDATES

  • In the UK, the ILO unemployment rate remained steady at 4.2% in November, in line with market expectations.
  • In Italy, the CPI rose 0.2% on a MoM basis in December, in line with market expectations. The CPI had declined 0.5% in the previous month.
  • In Germany, the CPI rose 0.1% on a MoM basis in December, in line with market expectations. The CPI had declined 0.4% in the previous month.
  • In Germany, the ZEW economic sentiment unexpectedly rose to a level of 15.20 in January, compared to a level of 12.80 recorded in the previous month.
  • In Germany, the ZEW current situation index fell to -77.30 in January, compared to a level of -77.10 recorded in the previous month.
  • In the eurozone, the ZEW economic sentiment fell to a level of 22.70 in January, less than market expectations for a drop to a level of 21.90. The ZEW economic sentiment had recorded a level of 23.00 in the prior month.
  • In the US, the NY Empire State manufacturing index unexpectedly dropped to a level of -43.70 in January, compared to a level of -14.50 recorded in the previous month.
  • In Canada, the CPI dropped 0.3% on a MoM basis in December, in line with market expectations and compared to an advance of 0.1% recorded in the previous month.
  • In China, industrial production climbed 6.8% on a YoY basis in December, compared to a rise of 6.6% recorded in the prior month.
  • In China, gross domestic product (GDP) advanced 5.2% on a YoY basis in 4Q23, less than market expectations for a rise of 5.3%. GDP had advanced 4.9% in the previous quarter.
  • In China, retail sales rose 7.4% on a YoY basis in December, less than market expectations for a rise of 8.0%. Retail sales had advanced 10.1% in the prior month.

CORPORATE UPDATES

SOUTH AFRICA

  • Shareholder concerns about rights dilution sway Ninety One (JO: NY1J ): Shareholders of London and Cape Town-based asset manager Ninety One have raised concerns about the dilution of their rights and investments, with 20% of them voting against the general authority to issue ordinary shares for cash in terms of the listings requirements of the local bourse.

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