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Market Review, Commodities, Currencies, Economic & Corporate Update - 23.05.24

Published 2024/05/23, 09:04
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SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the red yesterday, led by losses in mining and property sector stocks.
  • Meanwhile, domestic consumer inflation eased slightly in April.
  • Gold miners, Sibanye Stillwater (JO:SSWJ), Harmony Gold Mining (JO:HARJ), AngloGold Ashanti (JO:ANGJ) and Gold Fields (JO:GFIJ) dropped 4.5%, 2.4%, 1.4% and 1.2%, respectively.
  • Property developers, Redefine Properties (JO:RDFJ), Vukile Property Fund (JO:VKEJ) and Attacq (JO:ATTJ) shed 4.4%, 1.4% and 1.1%, respectively.
  • Platinum miners, Northam Platinum (JO:NPHJ), Impala Platinum (JO:IMPJ) and Anglo American Platinum (JO:AMSJ) declined 4.2%, 3.9% and 1.9%, respectively.
  • On the flipside, pharmaceutical companies, Life Healthcare Group (JO:LHCJ), Netcare (JO:NTCJ) and Adcock Ingram Holdings (JO:AIPJ) jumped 6.3%, 1.9% and 0.7%, respectively.
  • The JSE All Share index declined 0.4% to close at 79,492.56.

UK MARKET REVIEW

  • The UK market finished weaker yesterday, as higher than expected British inflation data dampened hopes for a rate cut in June.
  • Miners, Antofagasta (LON:ANTO), Glencore (LON:GLEN) (JO:GLNJ), Rio Tinto (LON:RIO) and Fresnillo (LON:FRES) dropped 6.4%, 3.4%, 2.3% and 1.8%, respectively.
  • Real estate companies, Barratt Developments (LON:BDEV) and Berkeley Group Holdings (LON:BKGH) declined 2.1% and 1.3%, respectively.
  • Energy companies, BP (LON:BP) and Shell (LON:RDSa) shed 1.9% and 1.5%, respectively, tracking lower oil prices.
  • Insurance companies, Prudential (LON:PRU) and Legal & General Group (LON:LGEN) fell 1.9% and 1.5%, respectively.
  • On the other hand, retailer, Marks & Spencer Group (LON:MKS) jumped 5.2%, after the company reported a 58% rise in annual profit, beating market expectations.
  • The FTSE 100 indexdeclined 0.5% to close at 8,370.33.

US MARKET REVIEW

  • US markets ended lower yesterday, as investors assessed FOMC meeting minutes.
  • Retailer, Target Corporation (NYSE:TGT) plunged 8.0%, after the company missed 1Q24 earnings expectations and issued dismal 2Q24 forecast.
  • Financial services companies, Goldman Sachs Group (NYSE:GS) and American Express (NYSE:AXP) shed 1.7% and 1.2%, respectively.
  • On the contrary, pharmaceutical companies, Moderna (NASDAQ:MRNA) and Pfizer (NYSE:PFE) soared 13.7% and 3.6%, respectively.
  • Semiconductor company, Analog Devices (NASDAQ:ADI) surged 10.9%, after the company projected higher revenue for 3Q24, helped by a rise in demand for its industrial chips.
  • Peers, ON Semiconductor Corporation (NASDAQ:ON) and Microchip Technology (NASDAQ:MCHP) dropped 4.8% and 3.9%, respectively.
  • The S&P 500 index fell 0.3% to settle at 5,307.01, while the DJIA index declined 0.5% to close at 39,671.04.
  • The NASDAQ index eased 0.2% to end the trading session at 16,801.54.

ASIA MARKET REVIEW

  • Asian markets are trading mostly higher this morning.
  • In Japan, banking company, Softbank Group (TYO:9984) has advanced 3.4%.
  • On the flipside, chemical company, Sumitomo Chemical (TYO:4005) has declined 2.2%.
  • In Hong Kong, e-commerce company. Alibaba Group (NYSE:BABA) Holdings has shed 3.9%.
  • On the other hand, transport and logistics company, Orient Overseas (HK:0316) has added 1.0%.
  • In South Korea, electric cable company, LS Corporation (KS:006260) has dropped 5.4%.
  • On the contrary, infrastructure support services company, Doosan Corporation (KS:000157) has surged 8.4%.
  • The Nikkei 225 index is trading 0.8% higher at 38,913.48.
  • The Hang Seng index has declined 1.2% to trade at 18,960.38, while the Kospi index is trading 0.1% higher at 2,727.36.

COMMODITIES

  • At 05:30 SAST today, Brent prices fell 0.5% to trade at $81.45/bl.
  • Yesterday, Brent prices fell 1.2% to settle at $81.9/bl, as US Federal Reserve (Fed) officials’ comments reignited concerns over oil demand. Additionally, the US Energy Information Administration (EIA) reported that the US crude inventories advanced by 1.83mn bls in the week ended 17 May 2024.
  • At 05:30 SAST today, gold prices declined 0.4% to trade at $2,369.56/oz. Yesterday, gold declined 1.8% to close at $2,378.25/oz, as a stronger greenback dented demand for the safe haven yellow metal.
  • Yesterday, copper declined 3.0% to close at $10,447.00/mt. Aluminium closed 2.0% lower at $2,679.51/mt.

CURRENCIES

  • Yesterday, the South African rand weakened against the US dollar. In South Africa, the consumer price index (CPI) slightly eased on an annual basis in April. In the US, the number of MBA mortgage applications increased in the week ended 17 May 2024. Meanwhile, existing home sales unexpectedly declined in April.
  • The yield on benchmark government bonds fell yesterday. The yield on the 2030 bond declined to 10.27%, while that for the longer-dated 2040 issue fell to 12.45%.
  • At 05:30 SAST, the US dollar is trading 0.2% higher against the South African rand at R18.3033, while the euro is trading 0.3% higher at R19.8358. At 05:30 SAST, the British pound has gained 0.2% against the South African rand to trade at R23.2986.
  • Yesterday, the euro mostly declined against most of the major currencies. In the UK, consumer price inflation weakened in April to its lowest since July 2021.
  • At 05:30 SAST, the euro advanced 0.1% against the US dollar to trade at $1.0832, while it has marginally gained against the British pound to trade at GBP0.8512.

ECONOMIC UPDATES

  • In South Africa, the CPI rose 0.3% on a MoM basis in April, compared to a rise of 0.8% recorded in the prior month.
  • In South Africa, the CPI rose 5.2% on a YoY basis in April, compared to 5.3% recorded in the prior month.
  • In the UK, the CPI rose 0.3% on a MoM basis in April, more than market expectations for a rise of 0.2%. The CPI had recorded a rise of 0.6% in the prior month.
  • In the US, the MBA mortgage applications rose 1.9% in the week ended 17 May 2024, compared to a rise of 0.5% recorded in the previous week.
  • In the US, existing home sales dropped 1.9% on a MoM basis in April, compared to a revised drop of 3.7% recorded in the previous month.
  • In Japan, the Jibun Bank manufacturing PMI rose to a level of 50.50 in May, more than market expectations for a rise to a level of 49.70. The manufacturing PMI had recorded a level of 49.60 in the prior month.
  • In Japan, the Jibun Bank services PMI fell to a level of 53.60 in May, compared to a level of 54.30 recorded in the prior month.
  • In New Zealand, retail sales unexpectedly rose 0.5% on a QoQ basis in 1Q24, compared to a revised drop of 1.8% recorded in the previous quarter.
  • In Australia, the Judo Bank manufacturing PMI remained unchanged at a level of 49.60 in May.
  • In Australia, the Judo Bank services PMI fell to a level of 53.10 in May, compared to a level of 53.60 recorded in the prior month.

CORPORATE UPDATES

SOUTH AFRICA

  • Life Healthcare Group Holdings Limited (JO:LHCJ): The pharmaceutical company, in its 1H24 results, reported that revenue advanced 7.8% from the same period of the preceding year to R11.74bn. Its diluted EPS from continuing operations stood at 46.70c, compared with 35.90c recorded in the corresponding period of the previous year.
  • Reunert Limited (JO:RLOJ): The engineering and technology company, in its interim results for the six months ended 31 March 2024, indicated that its revenue increased to R6.64bn, compared with R6.20bn posted in the corresponding period of the previous year. Its diluted EPS rose 7.4% from the same period of the prior year to 277.00c.
  • Pick ‘n Pay Stores Limited (JO:PIKJ): The retail company, in its FY24 sales and trading update, revealed that group sales increased 5.4% as compared with the previous year, with like-for-like sales growth of 2.9%. Moreover, it expects diluted loss per share to be between 684.23c to 635.73c, as compared with an EPS of 242.54c recorded in the previous year. Also, it expects headline loss per share to be between 228.38c to 176.70c, as compared with 258.36c recorded in the previous year. Furthermore, the company expects to release its annual results on 27 May 2024.
  • Southern Sun Holdings Limited (JO:SSUJ): The hospitality company, in its FY24 results, reported that income increased to R6.05bn from R5.39bn posted in the previous year. Its diluted EPS fell 10.5% from the prior year to 60.50c.
  • Burstone Group Limited (JO:BTNJ): The real estate investment trust company, in its annual results for the year ended 31 March 2024, revealed that revenue rose 12.9% from the preceding year to R2.05bn. Its diluted EPS stood at 28.90c, compared with 24.22c recorded in the previous year.
  • RFG Holdings Limited (JO:RFGJ): The food company, in its 1H24 results, indicated that revenue rose to R3.90bn from R3.78bn posted in the corresponding period of the previous year. Its diluted EPS increased 19.9% from the same period of the prior year to 99.60c.
  • Harmony Gold (JO:HARJ) reports fatality at Free State mine: Harmony Gold reported a fatality following a blasting accident at its Phakisa mine in the Free State. The incident took place on May 21 and all blasting operations at the mine have been temporarily suspended ahead of an investigation into the cause of the incident, Harmony Gold said in a statement. The relevant authorities had been informed, including the department of mineral resources & energy.

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