Market Review, Commodities, Currencies, Economic & Corporate Update - 22.11.23

  • Market Overview

SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the red yesterday, ahead of domestic consumer inflation data and led by losses in mining sector stocks.
  • Platinum miners, Impala Platinum (JO: IMPJ ), Anglo American Platinum (JO: AMSJ ) and Northam Platinum (JO: NPHJ ) shed 7.3%, 6.1% and 3.0%, respectively.
  • Property developers, Emira Property Fund (JO: EMIJ ), Shaftesbury Capital, Redefine Properties (JO: RDFJ ) and Resilient REIT (JO: RESJ ) dropped 3.6%, 3.5%, 1.9% and 1.7%, respectively.
  • Pharmaceutical companies, Netcare (JO: NTCJ ) and Life Healthcare Group (JO: LHCJ ) eased 1.7% and 0.6%, respectively.
  • On the flipside, gold miners, Gold Fields (JO: GFIJ ) and AngloGold Ashanti (JO: ANGJ ) advanced 4.6% and 3.8%, respectively.
  • Retailers, Mr Price Group (JO: MRPJ ), Shoprite Holdings (JO: SHPJ ) and Clicks Group (JO: CLSJ ) gained 4.1%, 1.1% and 0.8%, respectively.
  • Lenders, both, Capitec Bank Holdings (JO: CPIJ ) and Standard Bank Group (JO: SBKJ ) added 1.0% each.
  • The JSE All Share index declined 0.1% to close at 74,270.74.

UK MARKET REVIEW

  • The UK market finished weaker yesterday, following strength in the British pound after the Bank of England (BoE) Governor Andrew Bailey’s hawkish stance.
  • Retailers, Ocado Group (LON: OCDO ) and Burberry Group (LON: BRBY ) dropped 4.8% and 2.2%, respectively.
  • Insurance companies, Prudential (LON: PRU ) and Legal & General (LON: LGEN ) Insurance declined 2.2% and 1.3%, respectively.
  • Paper and packaging companies, DS Smith (LON: SMDS ) and Smurfit Kappa Group (LON: SKG ) shed 1.8% and 1.1%, respectively.
  • Miners, Glencore (LON: GLEN ) (JO: GLNJ ) and Fresnillo (LON: FRES ) fell 1.8% and 1.0%, respectively.
  • Energy companies, Shell (LON: RDSa ) and BP (LON: BP ) eased 1.1% and 0.8%, respectively, tracking lower oil prices.
  • On the other hand, pharmaceutical companies, AstraZeneca (LON: AZN ) and GSK (LON: GSK ) advanced 0.9% and 0.7%, respectively.
  • The FTSE 100 index declined 0.2% to close at 7,481.99.

US MARKET REVIEW

  • US markets ended lower yesterday, amid major US corporate earnings results.
  • Home improvement company, Lowe’s Company (NYSE: LOW ) dropped 3.1%, after the company downgraded its annual sales outlook.
  • Technology companies, Intel (NASDAQ: INTC ), Microsoft (NASDAQ: MSFT ) and Cisco Systems (NASDAQ: CSCO ) shed 2.5%, 1.2% and 1.0%, respectively.
  • Financial services companies, Goldman Sachs Group (NYSE: GS ) and American Express (NYSE: AXP ) fell 1.3% and 1.0%, respectively.
  • Electronics retailer, Best Buy Company (NYSE: BBY ) declined 0.7%, after the company reported weaker than expected revenue in 3Q23 and lowered its annual guidance citing a choppy and uncertain environment.
  • The S&P 500 index fell 0.2% to settle at 4,538.19, while the DJIA index declined 0.2% to close at 35,088.29.
  • The NASDAQ index eased 0.6% to end the trading session at 14,199.98.

ASIA MARKET REVIEW

  • Asian markets are trading mostly lower this morning.
  • In Japan, chemicals company, Mitsui Chemicals (TYO: 4183 ) has advanced 3.3%.
  • On the flipside, electronics company, Sharp Corporation (TYO: 6753 ) has shed 4.4%.
  • In Hong Kong, real estate company, Longfor Group Holdings (HK: 0960 ) has gained 2.9%.
  • On the other hand, consumer electronics company, Xiaomi Corporation (HK: 1810 ) has declined 1.6%.
  • In South Korea, pharmaceutical company, Yuyu Pharma (KS: 000220 ) has dropped 4.3%.
  • On the contrary, automotive parts company, Korea Flange (KS: 010100 ) has gained 12.9%.
  • The Nikkei 225 index is trading 0.6% higher at 33,560.01.
  • The Hang Seng index has declined 0.1% to trade at 17,725.00, while the Kospi index is trading 0.3% lower at 2,502.39.

COMMODITIES

  • At 05:30 SAST today, Brent prices fell 0.2% to trade at $82.27/bl.
  • Yesterday, Brent prices rose 0.2% to settle at $82.45/bl, amid hopes for a possible supply cuts by the OPEC+. Meanwhile, the American Petroleum Institute (API) reported that the US crude oil inventories rose by 9.05mn bls in the week ended 17 November 2023.
  • At 05:30 SAST today, gold prices declined 0.1% to trade at $1,996.60/oz. Yesterday, gold gained 1.1% to close at $1,998.37/oz, as a weaker dollar boosted demand for the safe haven yellow metal.
  • Yesterday, copper declined 0.2% to close at $8,323.50/mt. Aluminium closed 0.7% higher at $2,258.65/mt.

CURRENCIES

  • Yesterday, the South African rand weakened against the US dollar. In the US, existing home sales declined in October to its lowest level in 13 years. Moreover, the Chicago Fed National Activity Index fell in October.
  • The yield on benchmark government bonds fell yesterday. The yield on the 2030 bond declined to 9.91% while that for the longer-dated 2040 issue fell to 12.05%.
  • At 05:30 SAST, the US dollar is trading 0.1% lower against the South African rand at R18.6166, while the euro is trading marginally lower at R20.3211. At 05:30 SAST, the British pound has marginally declined against the South African rand to trade at R23.3451.
  • Yesterday, the euro mostly advanced against most of the major currencies.
  • At 05:30 SAST, the euro marginally advanced against the US dollar to trade at $1.0916, while it has marginally gained against the British pound to trade at GBP0.8707.

ECONOMIC UPDATES

  • In Switzerland, trade surplus narrowed to CHF4.60bn in October, compared to a revised surplus of CHF6.28bn recorded in the previous month.
  • In the US, the Chicago Fed National Activity Index fell to a level of -0.49 in October, compared to a rise to a level of 0.02 recorded in the previous month.
  • In the US, existing home sales dropped 4.1% on a MoM basis in October, compared to a revised drop of 2.2% recorded in the previous month.
  • In Canada, the consumer price index (CPI) rose 0.1% on a MoM basis in October, in line with expectations. The CPI had declined 0.1% in the previous month.
  • In Canada, new housing price index recorded a flat reading on a MoM basis in October, in line with expectations. New housing price index had declined 0.2% in the prior month.
  • In Australia, the Westpac leading index dropped 0.03% on a MoM basis in October, compared to a rise of 0.07% recorded in the prior month.

CORPORATE UPDATES

SOUTH AFRICA

  • Telkom SA SOC Limited (JO: TKGJ ): The telecommunications company, in its 1H23 results, indicated that its revenue rose to R21.41bn from R20.88bn posted in the corresponding period of the previous year. Its diluted EPS increased 53.5% from the same period of the prior year to 194.80c.
  • Coronation Fund Managers Limited (JO: CMLJ ): The fund management company, in its FY23 results, reported that revenues declined 2.4% from the preceding year to R3.65bn. Its diluted EPS stood at 182.90c, compared with 366.30c recorded in the previous year.
  • Oil prices retreat as critical OPEC+ meeting looms large: Oil fell, reversing the past two sessions’ steep gains, as investors turned cautious ahead of an OPEC+ meeting when the producer group may discuss deepening supply cuts due to slowing global growth.

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