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Market Review, Commodities, Currencies, Economic & Corporate Update - 19.06.24

Published 2024/06/19, 08:51
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SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the green yesterday, as investors cheered the re-election of President Cyril Ramaphosa.
  • Property developers, Emira Property Fund (JO:EMIJ), Vukile Property Fund (JO:VKEJ), Attacq (JO:ATTJ) and Redefine Properties (JO:RDFJ) surged 9.9%, 8.6%, 8.1% and 5.1%, respectively.
  • Retailers, Foschini Group (JO:TFGJ), Clicks Group (JO:CLSJ), Mr Price Group (JO:MRPJ) and Cashbuild (JO:CSBJ) jumped 9.5%, 8.9%, 6.4% and 5.1%, respectively.
  • Lenders, Capitec Bank Holdings (JO:CPIJ), FirstRand (JO:FSRJ), Nedbank Group (JO:NEDJ) and Standard Bank Group (JO:SBKJ) advanced 9.1%, 8.1%, 7.1% and 6.6%, respectively.
  • Insurance companies, Sanlam (JO:SLMJ), Old Mutual (JO:OMUJ) and Discovery Holdings (JO:DSYJ) gained 8.9%, 8.0% and 6.0%, respectively.
  • Pharmaceutical companies, Life Healthcare (JO:LHCJ), Aspen Pharmacare (JO:APNJ), Netcare (JO:NTCJ) and Adcock Ingram Holdings (JO:AIPJ) rose 8.2%, 7.4%, 4.6% and 3.7%, respectively.
  • The JSE All Share index advanced 3.5% to close at 79,748.83.

UK MARKET REVIEW

  • The UK market finished firmer yesterday, as investors await key domestic inflation data and the Bank of England's (BoE) policy decision due this week.
  • Financial services company, Hargreaves Lansdown (LON:HRGV) advanced 5.3%, after the company stated that it would consider a GBP5.41bn ($6.87bn) takeover approach by a consortium led by CVC Capital Partners.
  • Energy utilities companies, SSE (LON:SSE), National Grid (LON:NG) and Centrica (LON:CNA) advanced 3.5%, 2.1% and 1.1%, respectively.
  • Travel and leisure company, Whitbread (LON:WTB) gained 1.8%, after the company announced confidence in its full-year outlook, despite flat first-quarter sales.
  • Peers, International Consolidated Airlines Group SA (LON:ICAG) and InterContinental Hotels Group (LON:IHG) added 1.9% and 1.6%, respectively.
  • The FTSE 100 index advanced 0.6% to close at 8,191.29.

US MARKET REVIEW

  • US markets ended higher yesterday, buoyed by gains in technology sector stocks.
  • Semiconductor chip companies, Micron Technology (NASDAQ:MU), Super Micro Computers, Nvidia Corporation (NASDAQ:NVDA) and Qualcomm (NASDAQ:QCOM) advanced 3.8%, 3.7%, 3.5% and 2.2%, respectively.
  • Financial services companies, Goldman Sachs Group (NYSE:GS), JPMorgan Chase (NYSE:JPM) and Visa (NYSE:V) gained 1.6%, 1.0% and 0.9%, respectively.
  • On the contrary, homebuilding companies, Lennar Corporation (NYSE:LEN) dropped 5.0%, after the company projected lower than expected home deliveries for 3Q24.
  • Food companies, Hormel Foods Corporation (NYSE:HRL) and Tyson Foods (NYSE:TSN) shed 1.2% and 0.8%, respectively.
  • The S&P 500 index rose 0.3% to settle at 5,487.03, while the DJIA index advanced 0.1% to close at 38,834.86.
  • The NASDAQ index marginally climbed to end the trading session at 17,862.23.

ASIA MARKET REVIEW

  • Asian markets are trading higher this morning, tracking overnight gains on Wall Street.
  • In Japan, automobile company, Mazda Motor Corporation (TYO:7261) has advanced 3.2%.
  • On the flipside, cement company, Taiheiyo Cement (TYO:5233) has declined 1.8%.
  • In Hong Kong, real estate company, Longfor Group Holdings (HK:0960) has gained 2.8%.
  • On the other hand, optical devices company, Sunny Optical Technology (HK:2382) has shed 2.8%.
  • In South Korea, steel pipes company, Nexteel (KS:092790) has surged 18.3%.
  • On the contrary, pharmaceutical company, Shin Poong Pharmaceutical (KS:002870) has plunged 8.2%.
  • The Nikkei 225 index is trading 0.6% higher at 38,707.21.
  • The Hang Seng index has gained 1.9% to trade at 18,261.34, while the Kospi index is trading 0.9% higher at 2,789.17.

COMMODITIES

  • At 05:30 SAST today, Brent prices marginally rose to trade at $85.36/bl.
  • Yesterday, Brent prices rose 1.3% to settle at $85.33/bl, as escalating geopolitical risk in Europe and the Middle East, continue to threaten global supply. Additionally, the American Petroleum Institute (API) reported that the US crude oil inventories rose by 2.26mn bls in the week ended 14 June 2024.
  • At 05:30 SAST today, gold prices advanced 0.1% to trade at $2,331.28/oz. Yesterday, gold gained 0.4% to close at $2,328.33/oz, as investors await US data and comments from the US Federal Reserve (Fed) officials for more clues on the interest rates path.
  • Yesterday, copper declined 0.5% to close at $9,425.85/mt. Aluminium closed 0.5% lower at $2,485.19/mt.

CURRENCIES

  • Yesterday, the South African rand strengthened against the US dollar. In the US, retail sales rose less than expected in May. Moreover, industrial production recorded its biggest gain since July 2023 in May.
  • The yield on benchmark government bonds were mixed yesterday. The yield on the 2030 bond advanced to 10.11%, while that for the longer-dated 2040 issue fell to 12.33%.
  • At 05:30 SAST, the US dollar is trading marginally lower against the South African rand at R18.0409, while the euro is trading slightly lower at R19.3713. At 05:30 SAST, the British pound has marginally declined against the South African rand to trade at R22.9297.
  • Yesterday, the euro declined against most of the major currencies. In Germany, the ZEW economic confidence improved marginally in June. In the eurozone, the consumer price inflation accelerated in May.
  • At 05:30 SAST, the euro slightly slipped against the US dollar to trade at $1.0741, while it has marginally weakened against the British pound to trade at GBP0.8450.

ECONOMIC UPDATES

  • In Germany, the ZEW economic sentiment index rose to a level of 47.50 in June, less than market expectations for a rise to a level of 50.00. The ZEW economic sentiment index had recorded a level of 47.10 in the previous month.
  • In Germany, the current situation index unexpectedly dropped to a level of -73.80 in June, compared to a level of -72.30 recorded in the previous month.
  • In the eurozone, the economic sentiment index advanced more than expected to a level of 51.30 in June, compared to a level of 47.00 recorded in the previous month.
  • In the eurozone, the consumer price index (CPI) rose 0.2% on a MoM basis in May, compared to a rise of 0.6% recorded in the previous month.
  • In the US, retail sales rose 0.1% on a MoM basis in May, less than market expectations for a rise of 0.2%. Retail sales had recorded a revised drop of 0.2% in the prior month.
  • In the US, industrial production advanced 0.9% on a MoM basis in May, more than market expectations for a rise of 0.3%. Industrial production had recorded a flat reading in the previous month.
  • In Japan, total merchandise trade deficit narrowed to JPY1.22bn in May, compared to a revised deficit of JPY465.60bn recorded in the prior month.

CORPORATE UPDATES

SOUTH AFRICA

  • Multichoice Group Limited (JO:MCGJ): The entertainment company announced that the company has entered into agreements with Sanlam in terms of which - Sanlam Life will acquire a 60% shareholding in the company’s insurance business, NMS Insurance Services (SA) Limited, from MultiChoice (Pty) Ltd, a South African subsidiary within the MCG group, for an upfront cash consideration of R1.20bn and a potential performance based cash earn-out, measured at 31 December 2026, of up to a maximum consideration of R1.50bn; and a long-term commercial arrangement has been entered into to expand insurance and related financial service offerings into MultiChoice’s extensive subscriber base of 21 million households across 50 countries on the African continent.
  • Thungela Resources Limited (JO:TGAJ): The coal mining company, in its trading update for the six-months ending 30 June 2024, revealed that total export saleable production in South Africa increased 28.0% to 7.80Mt. Export saleable production at Ensham for is expected to be 1.90Mt. Export equity sales from the South African operations are expected to decrease 4.8% to 6.00Mt. Moreover, export equity sales at Ensham are expected to be 2.00Mt. Moreover, the company expects EPS to be between 55.0% to 69.0%, lower as compared with R22.45 recorded in the previous year. Furthermore, it expects HEPS to be between 55.0% to 69.0%, lower as compared with R22.46 recorded in the prior year.
  • Telkom SA SOC Limited (JO:TKGJ): The telecommunications company, in its FY24 results, reported that its revenue rose to R42.46bn from R41.84bn posted in the previous year. Its diluted EPS stood at 376.70c, compared with a loss per share of 2,058.90c recorded in the previous year.
  • Stor-Age Property REIT Limited (JO:SSSJ): The real estate investment company, in its annual results for the year ended 31 March 2024, reported that its property revenue advanced 14.7% from the preceding year to R1.23bn. Its diluted EPS stood at 147.20c, compared with 151.35c recorded in the previous year.
  • PIC snaps up a larger chunk of Gold Fields (JO:GFIJ): The Public Investment Corporation (PIC) has bought further shares in Gold Fields, doubling its stake in the mining house in a space of a year.

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