Market Review, Commodities, Currencies, Economic & Corporate Update - 18.10.23

  • Market Overview

SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the red yesterday, weighed down by losses in property and retail sector stocks.
  • Property developers, Delta Property Fund (JO: DLTJ ), Shaftesbury Capital, Attacq (JO: ATTJ ) and NEPI Rockcastle N.V. (JO: NRPJ ) edged down 11.1%, 3.8%, 2.5% and 1.1%, respectively.
  • Platinum miners, Northam Platinum (JO: NHMJ ), Anglo American Platinum (JO: AGLJ ) and Impala Platinum (JO: IMPJ ) dropped 3.3%, 2.2% and 1.0%, respectively.
  • Retailers, Clicks Group (JO: CLSJ ), Cashbuild (JO: CSBJ ), Shoprite Holdings and SPAR Group (JO: SPPJ ) declined 2.9%, 1.8%, 1.5% and 0.9%, respectively.
  • Food companies, Tiger Brands (JO: TBSJ ) and Famous Brands (JO: FBRJ ) shed 1.5% and 1.0%, respectively.
  • On the flipside, lenders, Standard Bank Group (JO: SBKJ ) and FirstRand (JO: FSRJ ) advanced 2.3% and 1.5%, respectively.
  • Gold miners, AngloGold Ashanti (JO: ANGJ ) and Gold Fields (JO: GFIJ ) rose 1.8% and 1.6%, respectively.
  • The JSE All Share index declined 0.4% to close at 72,831.80.

UK MARKET REVIEW

  • The UK market finished firmer yesterday, boosted by gains in pharmaceutical stocks.
  • Pharmaceutical companies, AstraZeneca (LON: AZN ) and GSK (LON: GSK ) advanced 2.7% and 0.7%, respectively.
  • Retailers, JD Sports Fashion (LON: JD ), Next (LON: NXT ) and Ocado Group (LON: OCDO ) gained 2.2%, 1.3% and 1.2%, respectively.
  • Aerospace company, Rolls Royce Holdings (LON: RR ) rose 1.0%. The company announced 2,000 to 2,500 job cuts across its global business as part of a cost-reduction drive.
  • Energy companies, BP (LON: BP ) and Shell (LON: RDSa ) added 1.1% and 0.8%, respectively, tracking higher crude prices.
  • On the other hand, investment management company, St James’s Place fell 0.5%, after the company said that it would revamp its fee structure.
  • The FTSE 100 index advanced 0.6% to close at 7,675.21.

US MARKET REVIEW

  • US markets ended mostly lower yesterday, amid surge in the US Treasury yields following robust US economic data and strong corporate earnings results.
  • Financial services company, Goldman Sachs Group (NYSE: GS ) dropped 1.6%, after the company reported a drop in 3Q23 profits.
  • Drug company, Johnson & Johnson (NYSE: JNJ ) shed 0.9%. The company posted better-than-expected earnings in 3Q23 and raised its annual profit guidance.
  • On the contrary, banking company, Bank of America Corporation (NYSE: BAC ) gained 2.3%, after the company reported higher 3Q23 profits boosted by a rise in clients and accounts across its business.
  • The S&P 500 index marginally fell to settle at 4,373.20, while the DJIA index marginally advanced to close at 33,997.65.
  • The NASDAQ index eased 0.3% to end the trading session at 13,533.75.

ASIA MARKET REVIEW

  • Asian markets are trading mostly higher this morning, following robust Chinese economic data.
  • In Japan, transportation company, Kawasaki Kisen Kaisha (TYO: 9107 ) has declined 3.4%.
  • On the flipside, pharmaceutical company, Sumitomo Pharma (TYO: 4506 ) has advanced 3.5%.
  • In Hong Kong, automobile company, Geely Automobile Holdings (HK: 0175 ) has gained 2.1%.
  • On the other hand, consumer electronics company, Lenovo Group (HK: 0992 ) has shed 6.5%.
  • In South Korea, engineering company, SC Engineering (KS: 023960 ) has edged down 10.9%.
  • On the contrary, shipping company, Heung-A-Shipping (KS: 003280 ) has surged 17.8%.
  • The Nikkei 225 indexis trading 0.2% lower at 31,974.29.
  • The Hang Seng index has added 0.1% to trade at 17,787.86, while the Kospi index is trading marginally higher at 2,461.17.

COMMODITIES

  • At 05:30 SAST today, Brent prices rose 1.8% to trade at $91.54/bl.
  • Yesterday, Brent prices rose 0.3% to settle at $89.9/bl, ahead of US President Joe Biden’s visit to Israel. Additionally, the American Petroleum Institute (API) reported that the US crude oil inventories declined by 4.39mn bls in the week ended 13 October 2023.
  • At 05:30 SAST today, gold prices advanced 0.7% to trade at $1,936.53/oz. Yesterday, gold gained 0.2% to close at $1,922.46/oz, as the ongoing Israel-Hamas conflict in the Middle East lifted demand for the safe haven yellow metal.
  • Yesterday, copper declined 0.9% to close at $7,846.40/mt. Aluminium closed 0.2% lower at $2,175.31/mt.

CURRENCIES

  • Yesterday, the South African rand weakened against the US dollar. In the US, retail sales rose more than expected in September. Moreover, industrial production advanced in September. Meanwhile, the NAHB housing market index declined in October to its lowest level since January.
  • The yield on benchmark government bonds rose yesterday. The yield on the 2030 bond advanced to 10.76% while that for the longer-dated 2040 issue rose to 12.92%.
  • At 05:30 SAST, the US dollar is trading 0.3% lower against the South African rand at R18.7504, while the euro is trading 0.3% lower at R19.8249. At 05:30 SAST, the British pound has declined 0.3% against the South African rand to trade at R22.8243.
  • Yesterday, the euro advanced against most of the major currencies. In Germany, the ZEW economic sentiment index improved in October, amid hopes for an ease in inflation. In the eurozone, the ZEW economic sentiment index rose more than expected in October.
  • At 05:30 SAST, the euro marginally slipped against the US dollar to trade at $1.0574, while it has marginally gained against the British pound to trade at GBP0.8687.

ECONOMIC UPDATES

  • In Germany, the ZEW economic sentiment index rose to a level of -1.10 in October, more than market expectations for a rise to a level of -9.00. The ZEW economic sentiment index had recorded a level of -11.40 in the previous month.
  • In Germany, the ZEW current situation fell less-than-expected to -79.90 in October, compared to a level of -79.40 in the previous month.
  • In the eurozone, the ZEW economic sentiment index advanced to a level of 2.30 in October, more than market expectations and compared to a level of -8.90 in the previous month.
  • In China, gross domestic product (GDP) rose 4.9% on a YoY basis in 3Q23, more than market expectations for a rise of 4.4%. GDP had advanced 6.3% in the previous quarter.
  • In China, industrial production advanced 4.5% on a YoY basis in September, more than market expectations for a rise of 4.3%.
  • In China, retail sales climbed 5.5% on a YoY basis in September, more than market expectations for a rise of 4.9%. Retail sales had advanced 4.6% in the prior month.
  • In the US, retail sales rose 0.7% on a MoM basis in September, more than market expectations and compared to a revised rise of 0.8% recorded in the prior month.
  • In the US, industrial production rose 0.3% on a MoM basis in September, compared to a flat reading recorded in the previous month.
  • In the US, the NAHB housing market index fell to a level of 40.00 in October, compared to a revised level of 44.00 recorded in the previous month.
  • In Canada, the consumer price index (CPI) unexpectedly dropped 0.1% on a MoM basis in September, compared to a rise of 0.4% recorded in the previous month.

CORPORATE UPDATES

SOUTH AFRICA

  • Pick ‘n Pay Stores Limited (JO: PIKJ ): The retail company, in its 1H24 trading update, stated that it expects diluted loss per share to be between 127.79c and 108.95c as compared with an EPS of 94.23c recorded in the same period of the previous year.
  • Hyprop Investments Limited (JO: HYPJ ): The real estate investment trust company announced that it has concluded a sale agreement with the Trustees for the time being of ‘The Table Bay Mall Property Trust’ to acquire 100% of the commercial letting enterprise, including the property and lease agreements relating to it, known as ‘Table Bay Mall’. As part of the acquisition, the company would also acquire the solar panels that are in the process of being commissioned on the property.
  • Zeder Investments Limited (JO: ZEDJ ): The investment company, in its 1H23 results, indicated that investment income rose to R27.00mn from R22.00mn posted in the corresponding period of the previous year. Its diluted EPS stood at 2.10c, compared with a loss per share 15.10c recorded in the corresponding period of the previous year.
  • Oil steadies as traders weigh latest US moves: Oil prices steadied after sliding more than $1 on bets the US would ease sanctions on producer Venezuela and stepped up efforts to prevent an escalation of the war between Israel and Hamas.

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