Market Review, Commodities, Currencies, Economic & Corporate Update - 24.08.23

  • Market Overview

South Africa Market Review

  • South African markets closed in the green yesterday, after the country’s consumer inflation declined to a 2-year low in July.
  • Platinum miners, Impala Platinum (JO: IMPJ ), Northam Platinum (JO: NHMJ ) and Anglo American Platinum (JO: AMSJ ) climbed 5.1%, 5.0% and 3.4%, respectively.
  • Gold miners, Anglo Gold Ashanti (JO: ANGJ ) and Gold Fields (JO: GFIJ ) advanced 4.3% and 3.9%, respectively.
  • Lenders, RMB Holdings (JO: RMHJ ), Nedbank Group (JO: NEDJ ), Standard Bank (JO: SBKJ ) and FirstRand (JO: FSRJ ) gained 4.4%, 3.4%, 2.2% and 1.6%, respectively.
  • Diversified miners Pan African Resources (JO: PANJ ), Exxaro Resources (JO: EXXJ ) and Kumba Iron Ore (JO: KIOJ ) rose 4.0%, 3.8% and 2.2%, respectively.
  • Retailers, SPAR Group (JO: SPPJ ), Clicks Group (JO: CLSJ ) and Shoprite Holdings (JO: SHPJ ) added 2.5%, 1.5% and 1.3%, respectively.
  • The JSE All Share index advanced 1.0% to close at 74,022.56.

UK Market Review

  • The UK market finished firmer yesterday, after weak factory activity data stoked expectations for a slowdown in the interest rate hikes by the Bank of England (BoE).
  • Real estate companies, Land Securities Group (LON: LAND ), Barratt Development (LON: BDEV ) and Berkeley Group Holding (LON: BKGH ) advanced 2.6%, 1.9% and 1.1%, respectively.
  • Insurance companies, Prudential (LON: PRU ) and Aviva (LON: AV ) gained 2.3% and 1.2%, respectively.
  • Consumer goods company, Reckitt Benckiser Group (LON: PSN ) rose 0.9%, after the company announced that its Chief Financial Officer (CFO), Jeff Carr would retire in March 2024 and would be replaced by Nike's (NYSE: NKE ) Shannon Eisenhardt.
  • On the other hand, retailer, JD Sports Fashion (LON: JD ) dropped 5.4%, after US peer, Foot Locker (NYSE: FL ) lowered its annual forecast.
  • The FTSE 100 index advanced 0.7% to close at 7,320.53.

US Market Review

  • US markets ended higher yesterday, led by gains in technology sector stocks.
  • Pharmaceutical companies, Merck & Company (NYSE: MRK ) and Gilead Sciences (NASDAQ: GILD ) advanced 3.8% and 0.9%, respectively, after Swiss rival Roche inadvertently published positive lung cancer drug trial data.
  • Media and entertainment companies, Netflix (NASDAQ: NFLX ) and Warner Bros Discovery (NASDAQ: WBD ) gained 3.5% and 1.3%, respectively.
  • Technology companies, Intel (NASDAQ: INTC ), Nvidia Corporation (NASDAQ: NVDA ), Apple (NASDAQ: AAPL ) and Microsoft (NASDAQ: MSFT ) rose 3.3%, 3.2%, 2.2% and 1.4%, respectively.
  • Financial services companies, Goldman Sachs Group (NYSE: GS ) and Visa (NYSE: V ) added 1.1% and 0.7%, respectively.
  • The S&P 500 index rose 1.1% to settle at 4,436.01, while the DJIA index advanced 0.5% to close at 34,472.98.
  • The NASDAQ index climbed 1.6% to end the trading session at 13,721.03.

Asia Market Review

  • Asian markets are trading higher this morning, tracking overnight gains on Wall Street.
  • In Japan, consumer electronics company, Panasonic (TYO: 6752 ) has gained 1.5%.
  • On the flipside, chemical company, Sumitomo Chemical (TYO: 4005 ) has declined 1.2%.
  • In Hong Kong, consumer electronics company, Lenovo Group (HK: 0992 ) has advanced 5.0%.
  • On the other hand, real estate company, Longfor (HK: 0960 ) Group Holdings has shed 1.9%.
  • In South Korea, apparel company, Pan-Pacific Corporation (KS: 007980 ) has surged 9.9%.
  • On the contrary, automotive heat management systems company, Hanon System (KS: 018880 ) has dropped 4.2%.
  • The Nikkei 225 index is trading 0.4% higher at 32,146.33.
  • The Hang Seng index has gained 1.3% to trade at 18,084.52, while the Kospi index is trading 1.0% higher at 2,531.79.

Commodities

  • At 05:30 SAST today, Brent prices fell 0.3% to trade at $82.93/bl.
  • Yesterday, Brent prices fell 1.0% to settle at $83.21/bl, amid concerns over a rise in the US gasoline stocks and weak manufacturing data globally. Meanwhile, the US Energy Information Administration (EIA) reported that US crude inventories fell by 6.14mn bls in the week ended 18 August 2023.
  • At 05:30 SAST today, gold prices advanced 0.3% to trade at $1,920.97/oz. Yesterday, gold gained 0.9% to close at $1,914.31/oz, as a weaker dollar and a drop in the US Treasury yields boosted demand for the safe haven yellow metal.
  • Yesterday, copper rose 1.1% to close at $8,424.10/mt. Aluminium closed 0.1% lower at $2,177.50/mt.

Currencies

  • Yesterday, the South African rand strengthened against the US dollar. In South Africa, consumer price inflation fell more than expected in July, reaching its lowest level in two years. In the US, the S&P Global manufacturing PMI unexpectedly declined in August. Moreover, the S&P Global services PMI fell more than expected in August. Meanwhile, the nation’s new home sales advanced to a 17-month high in July.
  • The yield on benchmark government bonds fell yesterday. The yield on longer-dated 2030 bond fell to 10.28%. Further, the yield on the longer-dated 2040 issue fell to 12.40%.
  • At 05:30 SAST, the US dollar is trading 0.1% higher against the South African rand at R18.4882, while the euro is trading 0.2% higher at R20.0988. At 05:30 SAST, the British pound has marginally gained against the South African rand to trade at R23.5206.
  • Yesterday, the euro mostly advanced against most of the major currencies. In Germany, the private sector suffered the steepest contraction in more than three years in August. In the eurozone, private sector activity registered its biggest fall since November 2020 in August. In the UK, the S&P Global manufacturing and services PMI contracted in August ending a six-month period of expansion as sluggish domestic economic conditions as well as higher interest rates damped demand.
  • At 05:30 SAST, the euro advanced 0.1% against the US dollar to trade at $1.0871, while it has gained 0.1% against the British pound to trade at GBP0.8548.

Economic Updates

  • In South Africa, the consumer price index (CPI) rose 4.7% on a YoY basis in July, less than market expectations for a rise of 5.0%. The CPI had recorded a rise of 5.4% in the prior month.
  • In the UK, the S&P Global manufacturing PMI dropped to a level of 42.50 in August, more than market expectations for a drop to a level of 45.00. The S&P Global manufacturing PMI had recorded a level of 45.30 in the previous month.
  • In the UK, the S&P Global services PMI dropped to a level of 48.70 in August, more than market expectations for a drop to a level of 50.80. The S&P Global services PMI had recorded a level of 51.50 in the previous month.
  • In France, the HCOB manufacturing PMI unexpectedly rose to a level of 46.40 in August, compared to market expectations for a drop to a level of 45.00. The HCOB manufacturing PMI had recorded a level of 45.10 in the previous month.
  • In France, the HCOB services PMI unexpectedly dropped to a level of 46.70 in August, compared to market expectations for a rise to a level of 47.50. The HCOB services PMI had recorded a level of 47.10 in the previous month.
  • In Germany, the HCOB manufacturing PMI unexpectedly rose to a level of 39.10 in August, compared to market expectations for a drop to a level of 38.70. The HCOB manufacturing PMI had recorded a level of 38.80 in the previous month.
  • In Germany, the HCOB services PMI dropped to a level of 47.30 in August, more than market expectations for a drop to a level of 51.50. The HCOB services PMI had recorded a level of 52.30 in the previous month.
  • In the eurozone, the HCOB manufacturing PMI unexpectedly rose to a level of 43.70 in August, compared to market expectations for a drop to a level of 42.60. The HCOB manufacturing PMI had recorded a level of 42.70 in the previous month.
  • In the eurozone, the HCOB services PMI dropped to a level of 48.30 in August, more than market expectations for a drop to a level of 50.50. The HCOB services PMI had recorded a level of 50.90 in the previous month.
  • In the US, the number of MBA mortgage applications dropped 4.2% in the week ended 18 August 2023, compared to a drop of 0.8% recorded in the previous week.
  • In the US, the S&P Global manufacturing PMI unexpectedly dropped to a level of 47.00 in August, compared to market expectations for a rise to a level of 49.30. The S&P Global manufacturing PMI had recorded a level of 49.00 in the previous month.
  • In the US, the S&P Global services PMI dropped to a level of 51.00 in August, more than market expectations for a drop to a level of 52.20. The S&P Global services PMI had recorded a level of 52.30 in the previous month.
  • In the US, new home sales rose 4.4% on a MoM basis in July, compared to a drop of 2.8% recorded in the previous month.

Corporate Updates

South Africa

  • Adcock Ingram Holdings Limited (JO: AIPJ ): The pharmaceutical company, in its FY23 results, indicated that its revenue rose to R9.13bn from R8.71bn posted in the corresponding period of the previous year. Its diluted EPS increased 13.0% from the same period of the prior year to 548.60c.
  • RCL Foods Limited (JO: RCLJ ): The food company, in its further trading update for the year ended 30 June2023, revealed that it expects EPS from total operations to be at least 30.0% lower as compared with R1.14 recorded in the previous year. Also, it expects HEPS from total operations to be at least 30.0% lower as compared with R1.19 recorded in the previous year
  • Sasol Limited (JO: SOLJ ): The energy company, in its FY23 results, reported that its turnover advanced 6.2% from the same period of the preceding year to R289.70bn. Its diluted EPS stood at R13.02, compared with R61.36 recorded in the corresponding period of the previous year.
  • Harmony Gold Mining Company Limited (JO: HARJ ): The gold mining company, in its trading and operating update for the year ended 30 June 2023, revealed that it expects EPS to be between R7.63 and R7.98 as compared to a loss per share of R1.72 recorded in the previous year. Also, it expects HEPS to be between R7.47 and R8.50 as compared with R4.99 recorded in the previous year.
  • Omnia (JO: OMNJ ) banks on its agribio offerings: Chemicals, fertiliser and explosives group Omnia is upbeat about prospects in the agribio market, saying it aims to achieve double-digit profit growth over the next three years by expanding existing markets, unlocking new geographical markets and seeking new distribution partnerships.

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