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Market Review, Commodities, Currencies, Economic & Corporate Update - 24.05.24

Published 2024/05/24, 08:59
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SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the red for a third consecutive session yesterday, on weaker mining sector stocks following softening commodity prices.
  • Diversified miners, Kumba Iron Ore (JO:KIOJ), Pan African Resources (JO:PANJ) and Exxaro Resources (JO:EXXJ) dropped 5.1%, 1.9% and 1.1%, respectively.
  • Gold miners, Harmony Gold Mining (JO:HARJ), Sibanye Stillwater (JO:SSWJ), Gold Fields (JO:GFIJ) and AngloGold Ashanti (JO:ANGJ) declined 4.9%, 4.0%, 2.8% and 2.5%, respectively.
  • Platinum miners, Impala Platinum (JO:IMPJ) and Northam Platinum (JO:NPHJ) shed 4.6% and 1.6%, respectively.
  • Food companies, Famous Brands (JO:FBRJ) and RCL Foods (JO:RCLJ) fell 4.6% and 3.9%, respectively.
  • On the flipside, property developers, Emira Property Fund (JO:EMIJ), Growthpoint Properties (JO:GRTJ) and Resilient REIT (JO:RESJ) advanced 3.8%, 2.6% and 1.7%, respectively.
  • The JSE All Share index declined 0.7% to close at 78,956.06.

UK MARKET REVIEW

  • The UK market finished weaker yesterday, ahead of the UK elections in July and as a slower growth across businesses in May weighed on investor sentiment.
  • Energy utilities company, National Grid (LON:NG) plunged 10.9%, after the company announced plans to raise about GBP7.00bn ($8.90bn) in the largest UK rights issue since 2009.
  • Insurance companies, Aviva (LON:AV), Admiral Group (LON:ADML), Prudential (LON:PRU) and Legal & General Group (LON:LGEN) dropped 2.7%, 1.9%, 1.8% and 1.4%, respectively.
  • On the other hand, defense and aerospace companies, Rolls Royce Holdings (LON:RR) and BAE Systems (LON:BAES) advanced 2.9% and 1.7%, respectively.
  • Homebuilding companies, Persimmon (LON:PSN) and Taylor Wimpey (LON:TW) gained 2.6% and 1.9%, respectively.
  • Retailers, Ocado Group (LON:OCDO) and Marks & Spencer Group (LON:MKS) rose 2.5% and 1.6%, respectively.
  • The FTSE 100 index declined 0.4% to close at 8,339.23.

US MARKET REVIEW

  • US markets ended lower yesterday, as dismal domestic economic data raised concerns over inflation.
  • Cruise line companies, Carnival (NYSE:CCL), Norwegian Cruise Line Holdings (NYSE:NCLH) and Royal Caribbean Group (NYSE:RCL) dropped 5.6%, 4.2% and 0.7%, respectively.
  • Technology companies, Intel (NASDAQ:INTC), Apple (NASDAQ:AAPL), Salesforce (NYSE:CRM) and Cisco Systems (NASDAQ:CSCO) declined 4.3%, 2.1%, 1.9% and 1.8%, respectively.
  • Financial services companies, American Express (NYSE:AXP), Goldman Sachs Group (NYSE:GS) and JPMorgan Chase (NYSE:JPM) shed 1.9%, 0.9% and 0.7%, respectively.
  • On the contrary, semiconductor chips company, Nvidia Corporation (NASDAQ:NVDA) surged 9.3%, after the company reported better than expected revenue in 1Q25, raised its quarterly forecast and announced a stock split.
  • The S&P 500 index fell 0.7% to settle at 5,267.84, while the DJIA index declined 1.5% to close at 39,065.26.
  • The NASDAQ index eased 0.4% to end the trading session at 16,736.03.

ASIA MARKET REVIEW

  • Asian markets are trading lower this morning, tracking overnight losses on Wall Street.
  • In Japan, automobile company, Yamaha Corporation (TYO:7951) has declined 3.4%.
  • On the flipside, consumer electronics company, Hitachi (TYO:6501) has gained 2.2%.
  • In Hong Kong, real estate company, Hang Lung Properties (HK:0101) has shed 3.8%.
  • On the other hand, internet technology company, NetEase (NASDAQ:NTES) has advanced 2.4%.
  • In South Korea, industrial construction company, KCC Corporation (KS:344820) has dropped 4.3%.
  • On the contrary, seafood products company, Hansung Enterprise (KS:003680) has surged 11.4%.
  • The Nikkei 225 index is trading 1.2% lower at 38,649.15.
  • The Hang Seng index has declined 1.0% to trade at 18,679.78, while the Kospi index is trading 1.0% lower at 2,695.61.

COMMODITIES

  • At 05:30 SAST today, Brent prices rose 0% to trade at $81.39/bl.
  • Yesterday, Brent prices fell 0.7% to settle at $81.36/bl, as likelihood of higher-for-longer US interest rates raised concerns over demand growth.
  • At 05:30 SAST today, gold prices advanced 0.1% to trade at $2,330.48/oz. Yesterday, gold declined 2.1% to close at $2,328.37/oz, as robust US business activity strengthened the dollar.
  • Yesterday, copper declined 1.5% to close at $10,290.50/mt. Aluminium closed marginally lower at $2,679.51/mt.

CURRENCIES

  • Yesterday, the South African rand weakened against the US dollar. In the US, both, manufacturing and services PMI advanced more than expected in May. Moreover, the Kansas Fed manufacturing activity index climbed more than expected in May. Further, initial jobless claims declined more than expected in the week ended 17 May 2024. Meanwhile, the new home sales dropped more than expected in April.
  • The yield on benchmark government bonds rose yesterday. The yield on the 2030 bond advanced to 10.28%, while that for the longer-dated 2040 issue rose to 12.48%.
  • At 05:30 SAST, the US dollar is trading 0.1% higher against the South African rand at R18.4924, while the euro is trading slightly higher at R19.9867. At 05:30 SAST, the British pound has marginally gained against the South African rand to trade at R23.4702.
  • Yesterday, the euro mostly advanced against most of the major currencies. In Germany, the HCOB manufacturing PMI rose to a 4-month high in May. Moreover, the services PMI advanced to a 11-month high in May. In the eurozone, the consumer confidence index strengthened to its highest level since early 2022 in May. Moreover, manufacturing activity improved to a 15-month high in May. Meanwhile, the services PMI remained unchanged in May. In the UK, the manufacturing PMI advanced to a 22-month high in May. Meanwhile, the services PMI declined in May.
  • At 05:30 SAST, the euro slipped 0.1% against the US dollar to trade at $1.0808, while it has slightly gained against the British pound to trade at GBP0.8519.

ECONOMIC UPDATES

  • In the UK, the GfK consumer confidence index rose to a level of -17.00 in May, more than market expectations and compared to a level of -19.00 recorded in the previous month.
  • In the UK, S&P Global manufacturing PMI rose to a level of 51.30 in May, more than market expectations for a rise to a level of 49.50. The manufacturing PMI had recorded a level of 49.10 in the previous month.
  • In the UK, the S&P Global services PMI fell to a level of 52.90 in May, more than market expectations and compared to a level of 55.00 recorded in the previous month.
  • In France, the HCOB manufacturing PMI rose to a level of 46.70 in May, more than market expectations for a rise to a level of 45.80. The manufacturing PMI had recorded a level of 45.30 in the previous month.
  • In France, the HCOB services PMI unexpectedly fell to a level of 49.40 in May, compared to a level of 51.30 recorded in the previous month.
  • In Germany, the HCOB manufacturing PMI rose to a level of 45.40 in May, more than market expectations and compared to a level of 42.50 recorded in the previous month.
  • In Germany, the HCOB services PMI advanced to a level of 53.90 in May, more than market expectations for a rise to a level of 53.50. The manufacturing PMI had recorded a level of 53.20 in the previous month.
  • In the eurozone, the HCOB manufacturing PMI climbed to a level of 47.40 in May, more than market expectations for a rise to a level of 46.20. The manufacturing PMI had recorded a level of 45.70 in the previous month.
  • In the eurozone, the HCOB services PMI unexpectedly remained unchanged at a level of 53.30 in May.
  • In the eurozone, the consumer confidence index advanced to a level of -14.30 in May, less than market expectations for a rise to a level of -14.20. The consumer confidence index had recorded a level of -14.70 in the previous month.
  • In the US, the preliminary Markit manufacturing PMI unexpectedly climbed to a level of 50.90 in in May, compared to a level of 50.00 in the previous month.
  • In the US, the preliminary Markit services PMI registered an unexpected rise to a level of 54.80 in May, compared to market expectations of an unchanged reading of 51.30.
  • In the US, new home sales dropped 4.7% on a MoM basis in April, compared to a revised rise of 5.4% recorded in the prior month.
  • In the US, the Kansas Fed manufacturing activity index rose to a level of -1.00 in May, compared to a level of -13.00 recorded in the previous month.
  • In the US, initial jobless claims fell to a level of 215.00K in the week ended 17 May 2024, more than market expectations for a drop to a level of 220.00K. Initial jobless claims had recorded a revised level of 223.00K in the previous week.
  • In Japan, the consumer price index (CPI) rose 2.5% on a YoY basis in April, compared to a rise of 2.7% recorded in the prior month.
  • In New Zealand, the trade surplus narrowed to N$91.00mn in on a MoM basis in April, compared to a revised surplus of N$476.00mn recorded in the previous month.

CORPORATE UPDATES

SOUTH AFRICA

  • Anglo American Plc (JO:AGLJ): The mining company announced that the value of rough diamond sales (Global Sightholder Sales and Auctions) for De Beers’ fourth sales cycle of 2024 amounted to $380.00mn.
  • Investec Limited (JO:INLJ): The financial services company, in its FY24 results, stated that net interest income increased to GBP1.34bn from GBP1.27bn posted in the previous year. Its diluted EPS rose 22.4% from the same period of the prior year to 101.00p.
  • Tsogo Sun Holdings Limited (JO:TSGJ): The hotels and entertainment company, in its annual results for the year ended 31 March 2024, reported that income rose to R11.50bn from R11.32bn posted in the previous year. Its basic and diluted EPS fell 12.0% from the prior year to 147.00c.
  • Tharisa Plc (JO:THAJ): The integrated resource company, in its 1H24 results, reported that revenue advanced 10.1% from the same period of the preceding year to $369.13mn. Its diluted EPS stood at 12.60 US cents, compared with 17.30 US cents recorded in the corresponding period of the previous year.
  • Emira Property Fund Limited (JO:EMIJ): The real estate investment trust company, in its trading update for the year ended 31 March 2024, revealed that distribution per share (DPS) is expected to be between 19.86% to 21.93%, higher as compared with 96.78c recorded in the prior period.
  • Oil falls after Fed hints at rate hikes: Oil prices eased for a fourth consecutive session after the minutes of a US Federal Reserve meeting revealed discussions of a further tightening of interest rates if inflation remained sticky, a move that could hurt oil demand.

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