SOUTH AFRICA MARKET REVIEW
- South African markets closed in the red yesterday, as investors assessed the US Federal Reserve’s (Fed) hawkish stance.
- Meanwhile, the South African Reserve Bank (SARB) kept its key interest rate unchanged.
- Platinum miners, Anglo American Platinum (JO:AMSJ), Northam Platinum (JO:NHMJ) and Impala Platinum (JO:IMPJ) dropped 5.5%, 3.7% and 2.7%, respectively.
- Diversified miners, Kumba Iron Ore (JO:KIOJ), Exxaro Resources (JO:EXXJ) and Anglo American (JO:AGLJ) declined 4.4%, 3.7% and 2.9%, respectively.
- Gold miners, Gold Fields (JO:GFIJ) and AngloGold Ashanti (JO:ANGJ) shed 3.4% and 1.5%, respectively.
- Retailers, Mr Price Group (JO:MRPJ) and Pick ‘n Pay Stores (JO:PIKJ) each fell 3.1%.
- Lenders, FirstRand (JO:FSRJ), Nedbank Group (JO:NEDJ), Capitec Bank Holdings (JO:CPIJ) and Standard Bank Group (JO:SBKJ) eased 2.8%, 1.6%, 1.2% and 1.0%, respectively.
- The JSE All Share index declined 2.1% to close at 73,238.13.
UK MARKET REVIEW
- The UK market finished weaker yesterday, after the Bank of England (BoE) held its key interest rates steady but signalled that rate will remain higher for longer.
- Miners, Antofagasta (LON:ANTO), Rio Tinto (LON:RIO), Glencore (LON:GLEN) (JO:GLNJ) and Fresnillo (LON:FRES) dropped 3.2%, 2.7%, 2.6% and 2.1%, respectively.
- Travel and leisure companies, International Consolidated Airlines Group S.A. (LON:ICAG) and Whitbread (LON:WTB) declined 2.1% and 1.2%, respectively.
- Banking firms, Barclays (LON:BARC) and NatWest Group (LON:NWG) shed 1.8% and 0.7%, respectively.
- On the other hand, sports retailer, JD Sports Fashion (LON:JD) jumped 9.0%, after the company reported upbeat interim results and projected a higher annual profit.
- Clothing retailer, Next (LON:NXT) advanced 3.4%, after the company raised its full-year profit outlook for the third time in four months.
- The FTSE 100 index declined 0.7% to close at 7,678.62.
US MARKET REVIEW
- US markets ended lower yesterday, amid increase in the US Treasury yields, fears of a potential government shutdown and concerns regarding the Federal Reserve's (Fed) hawkish stance.
- Semiconductor company, Broadcom (NASDAQ:AVGO) declined 2.7%, amid reports that Google (NASDAQ:GOOGL) plans to drop the company as artificial intelligence (AI) chips supplier as early as 2027.
- On the contrary, logistics and delivery company, FedEx Corporation (NYSE:FDX) advanced 4.5%, after the company reported higher profits in 1Q24.
- Media companies, Fox Corporation and News Corporation gained 3.0% and 1.3%, respectively, following news that Rupert Murdoch will step down as Chairman.
- The S&P 500 index fell 1.6% to settle at 4,330.00, while the DJIA index declined 1.1% to close at 34,070.42.
- The NASDAQ index eased 1.8% to end the trading session at 13,223.98.
ASIA MARKET REVIEW
- Asian markets are trading mostly lower this morning, after the Bank of Japan (BOJ) maintained its ultra-easy monetary policy.
- In Japan, transportation company, Kawasaki Kisen Kaisha (TYO:9107) has dropped 3.6%.
- On the flipside, automobile company, Yamaha Corporation (TYO:7951) has added 0.9%.
- In Hong Kong, pharmaceutical company, Hansoh Pharmaceutical (HK:3692) has advanced 1.6%.
- On the other hand, real estate company, Longfor Group Holdings (HK:0960) has declined 1.6%.
- In South Korea, entertainment company, Ascendio (KS:012170) has shed 8.5%. On the contrary, automotive parts company, THN Corporation has gained 8.5%.
- The Nikkei 225 index is trading 0.9% lower at 32,287.46.
- The Hang Seng index has advanced 1.1% to trade at 17,858.09, while the Kospi index is trading 0.3% lower at 2,508.92.
COMMODITIES
- At 05:30 SAST today, Brent prices rose 0.7% to trade at $93.93/bl.
- Yesterday, Brent prices fell 0.2% to settle at $93.3/bl, after the Russian government temporarily banned fuel exports to most countries with immediate effect amid domestic fuel shortages.
- At 05:30 SAST today, gold prices advanced 0.2% to trade at $1,923.05/oz. Yesterday, gold declined 0.5% to close at $1,919.57/oz, as a stronger dollar and a rise in the US Treasury yields dented demand for the safe haven yellow metal.
- Yesterday, copper declined 1.8% to close at $8,129.55/mt. Aluminium closed 1.4% lower at $2,223.15/mt.
CURRENCIES
- Yesterday, the South African rand weakened against the US dollar. In South Africa, the SARB kept its interest rates unchanged for a second consecutive meeting but warned about persistent inflation risks. In the US, the number of people filing for initial jobless claims unexpectedly declined in the week ended 15 September 2023. Moreover, existing home sales declined in August. Furthermore, the leading economic index eased for a 17th consecutive month in August.
- The yield on benchmark government bonds rose yesterday. The yield on 2030 bond rose to 10.57%. Further, the yield on the longer-dated 2040 issue rose to 12.74%.
- At 05:30 SAST, the US dollar is trading 0.1% lower against the South African rand at R18.9273, while the euro is trading 0.3% lower at R20.1591. At 05:30 SAST, the British pound has declined 0.3% against the South African rand to trade at R23.2376.
- Yesterday, the euro advanced against most of the major currencies. In the eurozone, the consumer confidence index declined more than expected in September. In the UK, the BoE kept its benchmark rate unchanged following ease in inflation to an 18-month low.
- At 05:30 SAST, the euro slipped 0.1% against the US dollar to trade at $1.0653, while it has marginally gained against the British pound to trade at GBP0.8676.
ECONOMIC UPDATES
- The SARB kept its benchmark interest rates unchanged at 8.25%, in line with market expectations.
- In the UK, the GfK consumer confidence index unexpectedly rose to a level of -21.00 in September, compared to a level of -25.00 recorded in the previous month.
- The Swiss National Bank (SNB) kept its key interest rates unchanged at 1.75%.
- The BoE kept its benchmark interest rate unchanged at 5.25%, on easing inflation.
- In the eurozone, the consumer confidence index dropped to a level of -17.80 in September, more than market expectations for a drop to a level of 16.50. The consumer confidence index had recorded a level of -16.00 in the previous month.
- In the US, the number of initial jobless claims unexpectedly dropped to a level of 201.00K in the week ended 15 September 2023, compared to a revised level of 221.00K recorded in the previous week.
- In the US, current account deficit unexpectedly narrowed to $212.10bn in 2Q23, compared to a revised deficit of $214.50bn recorded in the previous quarter.
- In the US, existing home sales dropped 0.7% on a MoM basis in August, compared to a drop of 2.2% recorded in the previous month.
- In the US, the Philadelphia Fed manufacturing index dropped to a level of -13.50 in September, compared to a level of 12.00 recorded in the previous month.
- In Canada, the new housing price index rose 0.1% on a MoM basis in August, compared to a drop of 0.1% recorded in the previous month.
- In Japan, the consumer price index (CPI) rose 3.2% on a YoY basis in August, compared to a rise of 3.3% recorded in the previous month.
- In Japan, the Jibun Bank manufacturing PMI unexpectedly dropped to a level of 48.60 in September, compared to a level of 49.60 recorded in the previous month.
- In Japan, the Jibun Bank services PMI fell to a level of 53.30 in September, compared to a level of 54.30 recorded in the previous month.
- The BoJ kept its key interest rate unchanged at -0.1%, in line with market expectations.
- In Australia, the S&P Global manufacturing PMI dropped to a level of 48.20 in September, compared to a level of 49.60 recorded in the previous month.
- In Australia, the S&P Global services PMI rose to a level of 50.50 in September, compared to a level of 47.80 recorded in the previous month.
CORPORATE UPDATES
SOUTH AFRICA
- Discovery Limited (JO:DSBPp): The insurance company, in its FY23 results, reported that its insurance premium revenue advanced 2.3% from the preceding year to R59.67bn. Its diluted EPS stood at 781.50c, compared with 817.80c recorded in the previous year.
- Remgro Limited (JO:REMJ): The investment holding company, in its FY23 results, indicated that its revenue rose to R48.15bn from R41.88bn posted in the previous year. Its diluted EPS from continuing operations decreased 53.1% from the prior year to R10.27.
- Astral Foods Limited (JO:ARLJ): The food company, in its voluntary trading update for the year ending 30 September 2023, revealed that it expects EPS and HEPS to decrease by as much as 165%, compared with 2,781.00c and 2,762.00c, respectively recorded in the previous year.
- Vodacom (JO:VODJ) launches digital wallet with Bidvest Bank (JO:BVTJ): Vodacom has partnered with Bidvest Bank to offer a new digital wallet for its VodaPay platform, the latest move by SA’s biggest mobile operator to revive its mobile payment efforts locally after the failure of M-Pesa between 2010 and 2016.