Market Review, Commodities, Currencies, Economic & Corporate Update - 20.09.23

  • Market Overview

SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the red yesterday, ahead of inflation data and the South African Reserve Bank’s (SARB) interest-rate decision due this week.
  • Food companies, RCL Foods (JO: RCLJ ), Tiger Brands (JO: TBSJ ) and Famous Brands (JO: FBRJ ) dropped 3.3%, 2.6% and 1.9%, respectively.
  • Property developers, Emira Property Fund (JO: EMIJ ), Growthpoint Properties (JO: GRTJ ) and NEPI Rockcastle N.V. (JO: NRPJ ) shed 3.0%, 1.6% and 1.1%, respectively.
  • Diversified miners, Exxaro Resources (JO: EXXJ ) and Anglo American (JO: AMSJ ) declined 2.3% and 0.7%, respectively.
  • Gold miners, Anglo Gold Ashanti (JO: ANGJ ) and Gold Fields (JO: GFIJ ) fell 2.1% and 1.1%, respectively.
  • On the flipside, retailers, Foschini Group (JO: TFGJ ) and Mr Price Group (JO: MRPJ ) climbed 8.3% and 6.5%, respectively.
  • The JSE All Share index declined 0.1% to close at 73,806.42.

UK MARKET REVIEW

  • The UK market finished firmer yesterday, as investors await domestic inflation data and the Bank of England’s policy meeting due this week.
  • Investment management company, Hargreaves Lansdown (LON: HRGV ) advanced 4.9%, after the company reported upbeat FY23 results.
  • Banking firms, Lloyd Banking Group (LON: LLOY ) and HSBC Holdings (LON: HSBA ) advanced 1.8% and 1.2% respectively.
  • Retailer, Ocado Group (LON: OCDO ) gained 1.6%, after the company registered revenue growth in 3Q23 and maintained its annual outlook.
  • Energy companies, BP (LON: BP ) and Shell (LON: RDSa ) rose 1.1% and 0.9%, respectively, amid rise in oil prices.
  • On the other hand, online retail company, Kingfisher (LON: KGF ) plunged 12.2%, after the company downgraded its annual profit forecast by 7%, citing lower sales in France and Poland.
  • The FTSE 100 index advanced 0.1% to close at 7,660.20.

US MARKET REVIEW

  • US markets ended lower yesterday, ahead of the US Federal Reserve’s much awaited two-day monetary policy meeting.
  • Technology companies, Intel (NASDAQ: INTC ) and Oracle Corporation (NYSE: ORCL ) dropped 4.3% and 1.5%, respectively.
  • Media and entertainment company, Walt Disney (NYSE: DIS ) dropped 3.6%, after the company announced plans to nearly double its capital expenditure for its parks business over the next 10 years.
  • Energy companies, Devon Energy Corporation (NYSE: DVN ) and Diamondback Energy (NASDAQ: FANG ) eased 1.0% and 0.6%. respectively.
  • The S&P 500 index fell 0.2% to settle at 4,443.95, while the DJIA index declined 0.3% to close at 34,517.73.
  • The NASDAQ index eased 0.2% to end the trading session at 13,678.19.

ASIA MARKET REVIEW

  • Asian markets are trading lower this morning, tracking overnight losses on Wall Street.
  • In Japan, pharmaceutical company, Sumitomo Pharma (TYO: 4506 ) has declined 3.5%.
  • On the flipside, financial services company, Sumitomo Mitsui Financial Group (TYO: 8316 ) has gained 1.1%.
  • In Hong Kong, real estate company, Longfor Group Holdings (HK: 0960 ) has shed 2.1%.
  • On the other hand, gaming and entertainment company, Galaxy Entertainment Group (HK: 0027 ) has added 0.8%.
  • In South Korea, pharmaceutical company, Hanmi Pharmaceutical (KS: 128940 ) has dropped 5.0%.
  • On the contrary, marine transportation services company, Pan Ocean (KS: 028670 ) has surged 10.2%.
  • The Nikkei 225 index is trading 0.6% lower at 33,050.08.
  • The Hang Seng index has declined 0.6% to trade at 17,894.74, while the Kospi index is trading 0.1% lower at 2,555.95.

COMMODITIES

  • At 05:30 SAST today, Brent prices fell 0.8% to trade at $93.56/bl.
  • Yesterday, Brent prices fell 0.1% to settle at $94.34/bl, amid profit booking. Meanwhile, the American Petroleum Institute (API) reported that crude oil inventories declined by 5.25mn bls in the week ended 15 September 2023.
  • At 05:30 SAST today, gold prices advanced 0% to trade at $1,931.12/oz. Yesterday, gold declined 0.1% to close at $1,930.94/oz.
  • Yesterday, copper declined 0.8% to close at $8,233.00/mt. Aluminium closed 0.5% higher at $2,221.85/mt.

CURRENCIES

  • Yesterday, the South African rand strengthened against the US dollar. In the US, housing starts declined to a 3-year low in August. Meanwhile building permits rose more than expected in August.
  • The yield on benchmark government bonds fell yesterday. The yield on 2030 bond fell to 10.49%. Further, the yield on the longer-dated 2040 issue fell to 12.64%.
  • At 05:30 SAST, the US dollar is trading 0.1% lower against the South African rand at R18.9188, while the euro is trading 0.1% lower at R20.2089. At 05:30 SAST, the British pound has declined 0.2% against the South African rand to trade at R23.4335.
  • Yesterday, the euro declined against most of the major currencies.
  • At 05:30 SAST, the euro advanced 0.1% against the US dollar to trade at $1.0689, while it has gained 0.1% against the British pound to trade at GBP0.8625.

ECONOMIC UPDATES

  • In Switzerland, trade surplus expanded to CHF4.05bn in August, compared to a revised surplus of CHF3.13bn recorded in the previous month.
  • In the eurozone, the seasonally adjusted current account surplus narrowed to EUR20.90bn in July, compared to a surplus of EUR35.84bn recorded in the previous month.
  • In the eurozone, the consumer price index rose 5.2% on a YoY basis in August, less than market forecast and compared to a rise of 5.3% n the previous month.
  • In the US, building permits advanced 6.9% on a MoM basis in August, compared to a rise of 0.1% recorded in the previous month.
  • In the US, housing starts dropped 11.3% on a MoM basis in August, compared to a revised rise of 2.0% recorded in the previous month.
  • In Canada, consumer price index (CPI) rose 0.4% on a MoM basis in August, more than market expectations for a rise of 0.2%. The CPI had advanced 0.6% in the previous month.
  • In Japan, the merchandise trade deficit widened to JPY930.50bn in August, compared to a revised deficit of JPY66.30bn recorded in the previous month.
  • The People’s Bank of China (PBoC) kept its benchmark interest rate unchanged at 3.45%, as expected.

CORPORATE UPDATES

SOUTH AFRICA

  • Grand Parade Investments Limited (JO: GPLJ ): The investment company, in its trading update for the year ended 30 June 2023, stated that it expects HEPS to be between 170.0% and 190.0%, higher compared to a loss per share of 3.20c recorded in the previous month. Also, it expects loss per share to be between 3.27c and 3.81c, compared to a loss per share of 2.73c recorded in the previous month.
  • Crude gains for fourth straight day on supply concerns: Oil prices rose for a fourth consecutive session as weak US shale output spurred further concerns about a supply deficit stemming from extended production cuts by Saudi Arabia and Russia.

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