Market Review, Commodities, Currencies, Economic & Corporate Update - 23.11.23

  • Market Overview

SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the green yesterday, ahead of the South African Reserve Bank (SARB) interest rate decision.
  • Diversified miners, Pan African Resources (JO: PANJ ), Kumba Iron Ore (JO: KIOJ ) and Exxaro Resources (JO: EXXJ ) jumped 6.3%, 5.7% and 1.3%, respectively.
  • Platinum miners, Anglo American Platinum (JO: AMSJ ) and Impala Platinum (JO: IMPJ ) advanced 6.1% and 2.5%, respectively.
  • Gold miners, Gold Fields (JO: GFIJ ) and AngloGold Ashanti (JO: ANGJ ) rose 3.0% and 1.1%, respectively.
  • Property developers, NEPI Rockcastle N.V. (JO: NRPJ ), Shaftesbury Capital and Growthpoint Properties (JO: GRTJ ) gained 1.9%, 1.0% and 0.8%, respectively.
  • On the flipside, lenders, RMB Holdings (JO: RMHJ ), Standard Bank Group (JO: SBKJ ) and FirstRand (JO: FSRJ ) dropped 1.9%, 1.0% and 0.7%, respectively.
  • Pharmaceutical companies, Netcare (JO: NTCJ ) and Life Healthcare Group (JO: LHCJ ) shed 1.2% and 0.7%, respectively.
  • The JSE All Share index advanced 0.7% to close at 74,763.94.

UK MARKET REVIEW

  • The UK market finished weaker for a third consecutive session yesterday, weighed down by losses in energy sector stocks.
  • Home improvement retailer, Kingfisher (LON: KGF ) shed 7.0%, after the company trimmed its annual profit forecast for the second time in three months.
  • Energy company, BP (LON: BP ) dropped 2.2%, tracking lower crude oil prices.
  • Banking company, NatWest Group (LON: NWG ) declined 1.4%, after British Finance Minister Jeremy Hunt said he would explore options for a NatWest retail share offer in the next 12 months.
  • On the flipside, software company, Sage Group (LON: SGE ) jumped 13.3%, after the company reported a rise in its annual underlying operating profit.
  • The FTSE 100 index declined 0.2% to close at 7,469.51.

US MARKET REVIEW

  • US markets ended higher yesterday, on hopes that the US Federal Reserve might pause its rate hikes.
  • Technology companies, HP, Microsoft (NASDAQ: MSFT ) and International Business Machines (NYSE: IBM ) gained 2.8%, 1.3% and 0.8%, respectively.
  • Financial services companies, Goldman Sachs Group (NYSE: GS ), American Express (NYSE: AXP ) and Visa (NYSE: V ) rose 1.1%, 0.9% and 0.6%, respectively.
  • On the contrary, Farm equipment company, Deere & Co. (NYSE: DE ) shed 3.1%, after the company issued a dismal profit guidance for FY24.
  • Chipmaking company, NVIDIA (NASDAQ: NVDA ) dropped 2.5%, after the company cautioned that the US export restrictions could lead to a steep drop in Chinese sales.
  • The S&P 500 index rose 0.4% to settle at 4,556.62, while the DJIA index advanced 0.5% to close at 35,273.03.
  • The NASDAQ index climbed 0.5% to end the trading session at 14,265.86.

ASIA MARKET REVIEW

  • Asian markets are trading lower this morning.
  • In Japan, markets are closed today on account of a public holiday.
  • In Hong Kong, consumer electronics company, Lenovo Group (HK: 0992 ) has declined 2.6%.
  • On the other hand, real estate company, Longfor Group Holdings (HK: 0960 ) has advanced 5.5%.
  • In South Korea, pharmaceutical company, Jeil Pharmaceutical (KS: 271980 ) has gained 13.3%.
  • On the contrary, electronics company, Daeduck Electronics (KS: 008060 ) has shed 4.0%.
  • Yesterday, the Nikkei 225 index advanced 0.3% to close at 33,451.83.
  • Today, the Hang Seng index has declined 0.3% to trade at 17,678.34, while the Kospi index is trading 0.7% lower at 2,509.73.

COMMODITIES

  • At 05:30 SAST today, Brent prices fell 1.5% to trade at $80.76/bl.
  • Yesterday, Brent prices fell 0.6% to settle at $81.96/bl, after OPEC+ producers delayed a meeting on production cuts. Moreover, the US Energy Information Administration (EIA) reported that the US crude inventories advanced by 8.70mn bls in the week ended 17 November 2023. Meanwhile, Baker Hughes reported that the US oil rigs remained unchanged at 500 this week.
  • At 05:30 SAST today, gold prices advanced 0.2% to trade at $1,994.20/oz. Yesterday, gold declined 0.4% to close at $1,990.51/oz, as a stronger dollar and rise in the US Treasury yields dented demand for the safe haven yellow metal.
  • Yesterday, copper declined 0.8% to close at $8,252.84/mt. Aluminium closed 1.6% lower at $2,223.15/mt.

CURRENCIES

  • Yesterday, the South African rand weakened against the US dollar. In South Africa, the consumer price index (CPI) rose in October, reinforcing expectations that the South African Reserve Bank (SARB) could maintain its tighter policy stance for longer. In the US, durable goods orders declined more than expected in October. Further, the Michigan Consumer Sentiment Index dropped in November. Meanwhile, the initial jobless claims fell in the week ended 17 November 2023.
  • The yield on benchmark government bonds rose yesterday. The yield on the 2030 bond advanced to 10.14% while that for the longer-dated 2040 issue rose to 12.25%.
  • At 05:30 SAST, the US dollar is trading 0.2% lower against the South African rand at R18.8548, while the euro is trading marginally lower at R20.5606. At 05:30 SAST, the British pound has declined 0.1% against the South African rand to trade at R23.5763.
  • Yesterday, the euro mostly advanced against most of the major currencies.
  • At 05:30 SAST, the euro advanced 0.1% against the US dollar to trade at $1.0903, while it has gained 0.1% against the British pound to trade at GBP0.8722.

ECONOMIC UPDATES

  • In South Africa, the consumer price index (CPI) rose 5.9% on a YoY basis in October, more than market expectations and compared to a rise of 5.4% in the prior month.
  • In South Africa, the CPI climbed 0.9% on a MoM basis in October, more than market expectations for a rise of 0.5%. The CPI had advanced 0.6% in the prior month.
  • In the US, MBA mortgage applications rose 3.0% in the week ended 17 November 2023, compared to a rise of 2.8% recorded in the previous week.
  • In the US, initial jobless claims fell to a level of 209.00K in the week ended 17 November 2023, more than market expectations for a drop to a level of 225.00K. Initial jobless claims had recorded a revised level of 233.00K in the previous week.
  • In the US, durable goods orders dropped 5.4% in October, more than market expectations for a drop of 3.1%. Durable goods orders had recorded a revised rise of 4.6% in the previous month.
  • In the US, the Michigan consumer sentiment index rose to a level of 61.30 in November, compared to a level of 63.80 recorded in the previous month.
  • In the eurozone, the consumer confidence index rose to a level of -16.90 in November, compared to a revised level of -17.80 recorded in the prior month.
  • In Australia, the Judo Bank manufacturing PMI fell to a level of 47.70 in November, compared to a level of 48.20 recorded in the previous month.
  • In Australia, the Judo Bank services PMI dropped to a level of 46.30 in November, compared to a level of 47.90 recorded in the previous month.

CORPORATE UPDATES

SOUTH AFRICA

  • Nedbank Group Limited (JO: NEDJ ): The banking company announced the appointment of Jason Quinn as Group Chief Executive (CE) -designate of Nedbank Group and Nedbank.
  • Old Mutual Limited (JO: OMUJ ): The banking and insurance company, in its trading update for the period ended 30 September 2023, revealed that gross flows increased 8.0% to R146.55bn. Moreover, gross written premiums advanced to R19.31bn from R16.86bn recorded in the previous year.
  • Reunert Limited (JO: RLOJ ): The engineering company, in its FY23 results, indicated that its revenue rose to R13.78bn from R11.13bn posted in the previous year. Its diluted EPS increased 10.4% from the prior year to 571.00c.
  • Pan African Resources Limited (JO: PANJ ): The mining company, in its 1H24 production update, revealed that it expects gold production to be between 2.0% to 6.0%, higher as compared with 92,307oz recorded in the previous year. For FY24, the company has raised its production guidance to be in the range of 180,000oz to 190,000oz, from the previously communicated range of 178,000oz to 190,000oz.
  • RFG Holdings Limited (JO: RFGJ ): The food company, in its annual results for the period ended 1 October 2023, indicated that its revenue rose to R7.89bn from R7.26bn posted in the previous year. Its diluted EPS increased 32.3% from the prior year to 181.60c.
  • Oil prices fall as OPEC+ delays meeting: Oil prices fell nearly 1.0% in a volatile session as OPEC+ producers unexpectedly delayed a meeting on production cuts, raising questions about global crude supplies.

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