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Market Review, Commodities, Currencies, Economic & Corporate Update - 22.05.24

Published 2024/05/22, 09:31
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SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the red yesterday, as investors assessed hawkish comments from the US Federal Reserve (Fed) officials.
  • Food companies, RCL Foods (JO:RCLJ), Famous Brands (JO:FBRJ) and Astral Foods (JO:ARLJ) dropped 3.8%, 3.0% and 1.5%, respectively.
  • Retailers, SPAR Group (JO:SPPJ), Clicks Group (JO:CLSJ) and Cie Financiere Richemont S.A. (JO:CFRJ) declined 2.5%, 2.2% and 2.0%, respectively.
  • Gold miners, Sibanye Stillwater (JO:SSWJ), AngloGold Ashanti (JO:ANGJ) and Gold Fields (JO:GFIJ) shed 2.1%, 1.7% and 1.1%, respectively.
  • Pharmaceutical companies, Aspen Pharmacare (JO:APNJ), Adcock Ingram Holdings (JO:AIPJ) and Netcare (JO:NTCJ) fell 1.4%, 1.2% and 1.1%, respectively.
  • On the flipside, property developers, Emira Property Fund (JO:EMIJ) and NEPI Rockcastle N.V. (JO:NRPJ) advanced 3.1% and 1.1%, respectively.
  • The JSE All Share index declined 0.3% to close at 79,808.07.

UK MARKET REVIEW

  • The UK market finished weaker yesterday, ahead of domestic consumer inflation data.
  • Telecommunications companies, BT Group (LON:BT) and Vodafone Group (LON:VOD) dropped 3.2% and 2.5%, respectively.
  • Retailers, JD Sports Fashion (LON:JD), Marks & Spencer Group (LON:MKS) and B&M European Value Retail SA (LON:BMEB) declined 2.6%, 1.1% and 1.0%, respectively.
  • Paper and packaging companies, DS Smith (LON:SMDS) and Mondi (LON:MNDI) shed 2.3% and 1.0%, respectively.
  • Travel and leisure companies, International Consolidated Airlines Group SA (LON:ICAG), Whitbread (LON:WTB) and InterContinental Hotels Group (LON:IHG) fell 1.6%, 1.3% and 1.2%, respectively.
  • On the other hand, pharmaceutical company, AstraZeneca (LON:AZN) advanced 2.2%, after the company announced ambitious plans to grow its revenue by 75.0% to $80.00bn by 2030.
  • The FTSE 100 index declined 0.1% to close at 8,416.45.

US MARKET REVIEW

  • US markets ended higher yesterday, as investors assessed the latest comments from US Fed officials for further cues on interest rates. Departmental store company, Macy’s (NYSE:M) jumped 5.1%, after the company raised its annual profit forecast.
  • Meanwhile, the company posted a drop in its 1Q24 sales.
  • Technology company, International Business Machines (NYSE:IBM) advanced 2.1%, after the company announced that it plans to release a family of artificial-intelligence models as open-source software and help Saudi Arabia train an AI system in Arabic.
  • Financial services companies, JPMorgan Chase (NYSE:JPM) and Goldman Sachs Group (NYSE:GS) gained 2.0% and 1.6%, respectively.
  • The S&P 500 index rose 0.3% to settle at 5,321.41, while the DJIA index advanced 0.2% to close at 39,872.99.
  • The NASDAQ index climbed 0.2% to end the trading session at 16,832.62.

ASIA MARKET REVIEW

  • Asian markets are trading mostly higher this morning.
  • In Japan, pharmaceutical company, Chugai Pharmaceutical (TYO:4519) has declined 3.7%.
  • On the flipside, pharmaceutical company, Astellas Pharma (TYO:4503) has gained 1.9%.
  • In Hong Kong, automobile company. Li Auto (NASDAQ:LI) has advanced 2.6%.
  • On the other hand, internet technology company, NetEase (NASDAQ:NTES) has shed 2.9%.
  • In South Korea, electric power and communication cables company, LS Eco Energy has surged 15.1%.
  • On the contrary, steel products company, Histeel Co. (KS:071090) has dropped 4.8%.
  • The Nikkei 225 index is trading 0.6% lower at 38,719.35.
  • The Hang Seng index has advanced 0.3% to trade at 19,269.30, while the Kospi index is trading 0.2% higher at 2,729.16.

COMMODITIES

  • At 05:30 SAST today, Brent prices fell 0.6% to trade at $82.35/bl.
  • Yesterday, Brent prices fell 1.0% to settle at $82.88/bl, as possibilities of higher for longer interest rates weighed on fuel demand. Meanwhile, the American Petroleum Institute (API) reported that the US crude oil inventories declined by 3.10mn bls in the week ended 17 May 2024.
  • At 05:30 SAST today, gold prices declined 0.1% to trade at $2,419.14/oz. Yesterday, gold declined 0.2% to close at $2,421.78/oz, as a stronger dollar dented demand for the safe haven yellow metal.
  • Yesterday, copper declined 0.8% to close at $10,772.35/mt. Aluminium closed 4.2% higher at $2,735.02/mt.

CURRENCIES

  • Yesterday, the South African rand strengthened against the US dollar.
  • The yield on benchmark government bonds fell yesterday. The yield on the 2030 bond declined to 10.29%, while that for the longer-dated 2040 issue fell to 12.50%.
  • At 05:30 SAST, the US dollar is trading 0.1% lower against the South African rand at R18.0594, while the euro is trading 0.1% lower at R19.6062. At 05:30 SAST, the British pound has declined 0.1% against the South African rand to trade at R22.9633.
  • Yesterday, the euro declined against most of the major currencies. In Germany, producer price inflation advanced at the same pace of increase as seen in previous month. In the eurozone, trade surplus widened in March.
  • At 05:30 SAST, the euro marginally advanced against the US dollar to trade at $1.0857, while it has slightly weakened against the British pound to trade at GBP0.8538.

ECONOMIC UPDATES

  • In Germany, the producer price index advanced 0.2% on a MoM basis in April, in line with market expectations and compared to a similar rise in the prior month.
  • In the eurozone, seasonally adjusted current account surplus widened to EUR35.80bn in March, compared to a revised surplus of EUR28.90bn recorded in the previous month.
  • In the eurozone, seasonally adjusted trade surplus widened to EUR17.30bn in March, compared to a revised surplus of EUR16.70bn recorded in the prior month.
  • In Canada, the consumer price index (CPI) rose 0.5% on a MoM basis in April, in line with market expectations. The CPI had recorded a rise of 0.6% recorded in the previous month.
  • In Japan, merchandise trade balance recorded a deficit of JPY462.50bn in April, compared to a revised surplus of JPY387.00bn recorded in the previous month.
  • The Reserve Bank of New Zealand kept its key interest rate unchanged at 5.5%, in line with market expectations.

CORPORATE UPDATES

SOUTH AFRICA

  • Hosken Consolidated Investments Limited (JO:HCIJ): The investment company, in its trading update for the year ended 31 March 2024, indicated that it expects EPS to be 74.7% to 84.7%, lower as compared with 3,965.70c recorded in the previous year. Also, it expects HEPS to be between 24.1% to 34.1%, lower as compared with 2,050.70c recorded in the previous year. The company intends to release its financial results on or about 23 May 2024.
  • Coronation Fund Managers Limited (JO:CMLJ): The fund management company, in its 1H24 results, reported that its revenue increased to R1.89bn from R1.82bn posted in the corresponding period of the previous year. Its diluted EPS stood at 200.50c.
  • Alexander Forbes Group Holdings Limited (JO:AFHJ): The financial services company, in its trading statement for the twelve months ended 31 March 2024, indicated that it expects basic EPS to be between 51.40c and 57.10c, compared with 57.10c recorded in the prior year. Its HEPS is expected to be 23.0% to 33.0%, higher as compared with 47.70c recorded in the previous year.
  • Tharisa Plc (JO:THAJ): The mining company, in its trading update for the six months ended 31 March 2024, stated that it expects EPS to be 22.4% to 28.2%, lower as compared with 17.40 US cents recorded in the prior year. Also, it expects HEPS to be between 23.3% to 29.0%, lower as compared with 17.60 US cents recorded in the previous year.
  • Transaction Capital Limited (JO:TCPJ): The investment holding company, in its interim results for the six months ended 31 March 2024, reported that its revenue declined to R981.00mn from R1,295.00mn posted in the same period of the previous year. Its diluted loss per share stood at 178.30c.

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