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Market Review, Commodities, Currencies, Economic & Corporate Update - 25.01.24

Published 2024/01/25, 08:58
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SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the green yesterday, after domestic inflation slowed for a second straight month in December.
  • Diversified miners, Kumba Iron Ore (JO:KIOJ), African Rainbow Minerals (JO:ARIJ) and Pan African Resources (JO:PANJ) jumped 5.9%, 4.3% and 3.8%, respectively.
  • Property developers, Burstone Group (JO:BTNJ), Attacq (JO:ATTJ), Vukile Property Fund (JO:VKEJ) and Growthpoint Properties (JO:GRTJ) advanced 5.1%, 4.6%, 2.1% and 1.2%, respectively.
  • Gold miners, AngloGold Ashanti (JO:ANGJ), Harmony Gold Mining (JO:HARJ) and Gold Fields (JO:GFIJ) gained 4.2%, 4.1% and 3.3%, respectively.
  • Platinum miners, Northam Platinum (JO:NPHJ), Anglo American Platinum (JO:AMSJ) and Impala Platinum (JO:IMPJ) rose 4.1%, 3.8% and 3.7%, respectively.
  • Retailers, Foschini Group (JO:TFGJ), Mr Price Group (JO:MRPJ) and Pick ‘n Pay Stores (JO:PIKJ) added 3.3%, 2.0% and 1.3%, respectively.
  • The JSE All Share index advanced 1.3% to close at 74,320.13.

UK MARKET REVIEW

  • The UK market finished firmer yesterday, as mining stocks gained after China announced stimulus to support the economy.
  • Miners, Antofagasta (LON:ANTO), Fresnillo (LON:FRES), Glencore (JO:GLNJ) and Rio Tinto (LON:RIO) jumped 5.3%, 4.2%, 3.0% and 1.6%, respectively.
  • Retailers, Burberry Group (LON:BRBY), B&M European Value Retail (LON:BMEB), Next (LON:NXT) and JD Sports Fashion (LON:JD) advanced 3.7%, 1.3%, 1.0% and 0.8%, respectively.
  • Travel and leisure companies, International Consolidated Airlines Group SA (LON:ICAG) and Whitbread (LON:WTB) gained 3.7% and 1.7%, respectively.
  • Insurance companies, Prudential (LON:PRU), Legal & General Group (LON:LGEN) and Admiral Group (LON:ADML) rose 2.2%, 1.3% and 0.7%, respectively.
  • Banking firms, NatWest Group (LON:NWG) and HSBC Holdings (LON:HSBA) added 1.7% and 1.0%, respectively.
  • The FTSE 100 index advanced 0.6% to close at 7,527.67.

US MARKET REVIEW

  • US markets ended mostly higher yesterday, supported by gains in technology sector stocks and following robust US corporate earnings reports.
  • Media and entertainment company, Netflix (NASDAQ:NFLX) surged 10.7%, after the company reported upbeat earnings in 4Q23.
  • Technology companies, Nvidia Corporation (NASDAQ:NVDA), Meta Platforms (NASDAQ:META) and Microsoft (NASDAQ:MSFT) advanced 2.5%, 1.4% and 0.9%, respectively.
  • Energy companies, Chevron Corporation (NYSE:CVX), Exxon Mobil Corporation (NYSE:XOM) and Devon Energy Corporation (NYSE:DVN) gained 2.0%, 1.7% and 0.8%, respectively.
  • On the contrary, telecommunications company, AT&T (NYSE:T) declined 3.0%, after the company issued a dismal FY23 guidance.
  • The S&P 500 index rose 0.1% to settle at 4,868.55, while the DJIA index declined 0.3% to close at 37,806.39.
  • The NASDAQ index climbed 0.4% to end the trading session at 15,481.92.

ASIA MARKET REVIEW

  • Asian markets are trading mostly lower this morning. In Japan, consumer electronics company, Panasonic (TYO:6752) Holdings has declined 1.6%.
  • On the flipside, paper company, Nippon Paper Industries (TYO:3863) has advanced 3.7%.
  • In Hong Kong, real estate company, Longfor Group Holdings (HK:0960) has gained 3.3%.
  • On the other hand, automobile company, Geely Automobile Holdings (HK:0175) has shed 1.8%.
  • In South Korea, pharmaceutical company, Samil Pharmaceutical (KS:000520) has dropped 6.1%.
  • On the contrary, software company, DuzonBizon has climbed 10.5%.
  • The Nikkei 225 index is trading 0.2% lower at 36,162.01.
  • The Hang Seng index is trading 1.2% lower at 16,094.69, while the Kospi index is trading 0.3% lower at 2,461.85.

COMMODITIES

  • At 05:30 SAST today, Brent prices rose 0.4% to trade at $80.33/bl.
  • Yesterday, Brent prices rose 0.6% to settle at $80.04/bl, amid drop in the US crude oil inventories and following Chinese economic stimulus. The US Energy Information Administration (EIA) reported that the US crude inventories fell by 9.23mn bls in the week ended 19 January 2024.
  • At 05:30 SAST today, gold prices advanced 0.2% to trade at $2,016.20/oz. Yesterday, gold declined 0.7% to close at $2,012.60/oz, following strong US business activity data.
  • Yesterday, copper rose 1.9% to close at $8,472.34/mt. Aluminium closed 0.3% lower at $2,230.15/mt.

CURRENCIES

  • Yesterday, the South African rand strengthened against the US dollar. In South Africa, the consumer price inflation eased for a second straight month in December. In the US, the number of MBA mortgage applications rose in the week ended 19 January 2024. Moreover, the S&P Global manufacturing PMI advanced in January. Also, the S&P Global services PMI unexpectedly rose in January.
  • The yield on benchmark government bonds fell yesterday. The yield on the 2030 bond declined to 9.75%, while that for the longer-dated 2040 issue fell to 12.18%.
  • At 05:30 SAST, the US dollar is trading 0.1% higher against the South African rand at R18.9096, while the euro is trading 0.1% higher at R20.5722. At 05:30 SAST, the British pound has slightly declined against the South African rand to trade at R24.0419.
  • Yesterday, the euro mostly declined against most of the major currencies. In Germany, manufacturing PMI rose in January. Meanwhile, the services PMI dropped in January. In the eurozone, the HCOB manufacturing PMI advanced more than expected in January. Meanwhile, the HCOB services PMI unexpectedly declined in January. In the UK, the S&P Global manufacturing PMI rose more than expected in January. Moreover, the S&P Global services PMI unexpectedly improved in January.
  • At 05:30 SAST, the euro marginally slipped against the US dollar to trade at $1.0882, while it has marginally gained against the British pound to trade at GBP0.8558.

ECONOMIC UPDATES

  • In South Africa, the consumer price index (CPI) rose 5.1% on a YoY basis in December, less than market expectations for a rise of 5.2%. The CPI had registered a rise of 5.5% in the previous month.
  • In South Africa, the CPI recorded a flat reading on a MoM basis in December. The CPI had registered a drop of 0.1% in the previous month.
  • In the UK, the S&P Global manufacturing PMI rose to a level of 47.30 in January, compared to a level of 46.20 recorded in the previous month. Markets were expecting manufacturing PMI to rise to a level of 46.70.
  • In the UK, the S&P Global services PMI unexpectedly rose to a level of 53.80 in January, compared to a level of 53.40 recorded in the previous month.
  • In France, the preliminary HCOB manufacturing PMI rose to a level of 43.20 in January, more than market expectations for a rise to a level of 42.50. The HCOB manufacturing PMI had recorded a level of 42.10 in the previous month.
  • In France, the preliminary HCOB services PMI unexpectedly declined to a level of 45.00 in January, compared to a level of 45.70 recorded in the previous month.
  • In Germany, the preliminary HCOB manufacturing PMI climbed to a level of 45.40 in January, more than market expectations and compared to a level of 43.30 in the previous month.
  • In Germany, the preliminary HCOB services PMI unexpectedly declined to a level of 47.60 in January, compared to a level of 49.30 recorded in the previous month.
  • In the eurozone, the HCOB manufacturing PMI advanced to a level of 46.60 in January, more than market expectations for a rise to a level of 44.80. The preliminary HCOB manufacturing PMI had recorded a level of 44.40 in the previous month.
  • In the eurozone, the preliminary HCOB services PMI unexpectedly declined to a level of 48.40 in January, compared to a level of 48.80 recorded in the previous month.
  • In the US, the MBA mortgage applications rose 3.7% in the week ended 19 January 2024, compared to a rise of 10.4% recorded in the previous week.
  • In the US, the preliminary S&P Global manufacturing PMI unexpectedly rose to a level of 50.30 in January, compared to a level of 47.90 recorded in the previous month.
  • In the US, the preliminary S&P Global services PMI unexpectedly advanced to a level of 52.90 in January, compared to a level of 51.40 recorded in the previous month.
  • The Bank of Canada (BoC) kept its benchmark interest rate unchanged at 5.0%, in line with market expectations.

CORPORATE UPDATES

SOUTH AFRICA

  • The Foschini Group Limited (JO:TFGJ): The retail company, in its 3Q24 trading update, revealed that group turnover increased 4.5% as compared with the previous year. The company’s Africa turnover advanced 5.1%, with like-for-like turnover growth of 0.7%. Group online turnover increased 29.2%, contributing 9.1% to total Group turnover for the quarter. Moreover, TFG Africa opened 42 new stores during the period.
  • Ninety One (JO:NY1J) makes the case for investment in Tencent (HK:0700): Ninety One, SA’s largest money manager, says the investment case of Chinese multinational technology conglomerate Tencent is still appealing and believes the recent moves by the company position it to deliver high returns in the future.

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