South Africa Market Review
- South African markets closed in the red for a sixth consecutive session on Friday, amid losses in mining sector stocks.
- Diversified miners, Exxaro Resources (JO:EXXJ), Anglo American (JO:AMSJ) and Kumba Iron Ore (JO:KIOJ) dropped 4.7%, 2.8% and 2.3%, respectively.
- Property developers, Redefine Properties (JO:RDFJ), Shaftesbury Capital and Growthpoint Properties (JO:GRTJ) declined 2.8%, 2.4% and 1.4%, respectively.
- Retailers, Cie Financiere Richemont S.A. (JO:CFRJ), Mr Price Group (JO:MRPJ) and Shoprite Holdings (JO:SHPJ) shed 2.7%, 1.8% and 1.0%, respectively.
- Pharmaceutical companies, Aspen Pharmacare (JO:APNJ), Netcare (JO:NTCJ) and Life Healthcare (JO:LHCJ) fell 2.5%, 2.1% and 1.9%, respectively.
- The JSE All Share index declined 1.7% to close at 73,080.87.
UK Market Review
- The UK market finished weaker on Friday, amid concerns over China’s economic recovery and weaker domestic retail sales data.
- Miners, Antofagasta (LON:ANTO), Glencore (LON:GLEN) and Fresnillo (LON:FRES) dropped 3.3%, 1.8% and 0.7%, respectively.
- Retailers, JD Sports Fashion (LON:JD), Burberry Group (LON:BRBY) and Ocado (LON:OCDO) Group shed 2.4%, 1.7% and 0.8%, respectively.
- Paper and packaging companies, Smurfit Kappa Group (LON:SKG), DS Smith (LON:SMDS) and Mondi (LON:MNDI) declined 1.9%, 1.2% and 0.8%, respectively.
- Banking firms, Standard Chartered (LON:STAN), HSBC Holdings (LON:HSBA) and Barclays (LON:BARC) fell 1.5%, 1.4% and 0.8%, respectively.
- Real estate companies, Berkeley Group Holdings (LON:BKGH) and Barratt Development (LON:BDEV) eased 1.5% and 1.1%, respectively.
- The FTSE 100 index declined 0.7% to close at 7,262.43.
US Market Review
- US markets ended mostly lower on Friday, amid a rise in the US Treasury yields and as investors await Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole economic symposium.
- Deere & Company (NYSE:DE) shed 5.3%, even though the company reported higher profits in 3Q23 and upgraded its 2023 guidance.
- Cosmetics company, Estée Lauder (NYSE:EL) dropped 3.3%, after the company projected weaker annual net sales and profit guidance.
- On the other hand, departmental store chain companies, Ross Stores (NASDAQ:ROST) and Walmart (NYSE:WMT) advanced 5.0% and 1.4%, respectively.
- The S&P 500 index marginally fell to settle at 4369.71, while the DJIA index advanced 0.1% to close at 34,500.66.
- The NASDAQ index eased 0.2% to end the trading session at 13,290.78.
Asia Market Review
- Asian markets are trading mostly higher this morning.
- Meanwhile, China cut its one-year loan prime rate by 10 basis points and kept its five-year rate unchanged.
- In Japan, pharmaceutical company, Sumitomo Pharma (TYO:4506) has advanced 3.7%.
- On the flipside, cement company, Taiheiyo Cement (TYO:5233) has declined 1.0%.
- In Hong Kong, insurance company, AIA Group (HK:1299) has shed 2.9%.
- On the other hand, consumer electronics company, Lenovo Group (HK:0992) has gained 2.9%.
- In South Korea, chemical company, Hyosung Chemical Corporation (KS:298000) jumped 14.9%.
- On the contrary, cosmetic company, Jayjun Cosmetic (KS:025620) has edged down 8.1%.
- The Nikkei 225 index is trading 0.9% higher at 31,748.88.
- The Hang Seng index has declined 1.2% to trade at 17,736.15, while the Kospi index is trading 0.5% higher at 2,516.26.
Commodities
- At 05:30 SAST today, Brent prices rose 0.8% to trade at $85.46/bl, amid global supply constraints.
- On Friday, Brent prices rose 0.8% to settle at $84.8/bl, amid drop in the US output. Moreover, Baker Hughes reported that the US oil rigs count fell by 5 to 520 in the week ended 18 August 2023.
- At 05:30 SAST today, gold prices advanced 0.2% to trade at $1,892.21/oz. On Friday, gold marginally declined to close at $1,888.19/oz.
- On Friday, copper rose 0.2% to close at $8,213.60/mt. Aluminium closed 0.3% lower at $2,138.15/mt.
Currencies
- On Friday, the South African rand strengthened against the US dollar.
- The yield on benchmark government bonds rose on Friday. The yield on 2030 bond rose to 10.47%. Further, the yield on the longer-dated 2040 issue rose to 12.54%.
- At 05:30 SAST, the US dollar is trading 0.1% lower against the South African rand at R18.9857, while the euro is trading 0.1% higher at R20.6608. At 05:30 SAST, the British pound has marginally gained against the South African rand to trade at R24.1879.
- On Friday, the euro advanced against most of the major currencies. In the eurozone, construction output declined in June. In the UK, retail sales fell more than expected in July, as rainy weather reduced footfall.
- At 05:30 SAST, the euro advanced 0.1% against the US dollar to trade at $1.0883, while it has gained 0.1% against the British pound to trade at GBP0.8543.
Economic Updates
- In the UK, retail sales dropped 1.2% on a MoM basis in July, more than market expectations for a drop of 0.5%. Retail sales had advanced by a revised 0.6% in the previous monthIn the UK, the Rightmove house price index fell 1.9% on a MoM basis in August, compared to a drop of 0.2% recorded in the previous month.
- In Switzerland, industrial production eased 0.8% on a YoY basis in 2Q23, compared to a revised rise of 4.2% recorded in the previous quarter.
- In the eurozone, construction output fell 1.0% on a MoM basis in June, compared to a rise of 0.2% recorded in the previous month.
- In the eurozone, the final consumer price index (CPI) recorded a drop of 0.1% on a MoM basis in July, in line with market expectations and compared to a rise of 0.3% recorded in the previous month.
Corporate Updates
South Africa
- Sibanye Stillwater Limited (JO:SSWJ): The mining company, in its trading and operational update for the six months ended 30 June 2023, revealed that it expects EPS to be between 249.00c and 275.00c, compared with 426.00c recorded in the previous year. Also, it expects HEPS to be between 198.00c and 218.00c, compared with 423.00c recorded in the previous year. Moreover, the company announced that 4E PGM production from the SA PGM operations stood at 848,723oz, reflecting another solid operational performance and commendable management of elevated levels of load curtailment during the period. Meanwhile, mined 2E PGM production from the US PGM operations declined 11.0% YoY from the previous year to 205,513oz due to the shaft incident at the Stillwater West mine and ongoing critical skills shortages, which continue to affect productivity. Further, the company intends to release its interim results on 29 August 2023
- Oil set to snap 7-week winning streak on China jitters: Oil prices looked set to close down this week after seven weeks of gains, as China’s economic woes eclipse signs of tight supply.