SOUTH AFRICA MARKET REVIEW
- South African markets closed in the red yesterday, amid dismal US corporate earnings results.
- Retailers, Mr Price Group (JO:MRPJ), Cie Financiere Richemont S.A. (JO:CFRJ) and SPAR Group (JO:SPPJ) dropped 2.5%, 2.4% and 1.8%, respectively.
- Property developers, Emira Property Fund (JO:EMIJ), Hammerson (JO:HMNJ), Shaftesbury Capital and Growthpoint Properties (JO:GRTJ) declined 2.4%, 2.2%, 2.1% and 1.3%, respectively.
- Lenders, Capitec Bank Holdings (JO:CPIJ) and FirstRand (JO:FSRJ) shed 1.6% and 0.9%, respectively.
- Insurance companies, Sanlam (JO:SLMJ) and Discovery Holdings (JO:DSYJ) eased 1.6% and 1.2%, respectively.
- On the flipside, retail pharmacy company, Clicks Group (JO:CLSJ) jumped 6.1%, after the company reported a jump in its FY23 sales.
- The JSE All Share index declined 0.5% to close at 69,930.52.
UK MARKET REVIEW
- The UK market finished weaker yesterday, amid disappointing UK corporate earnings.
- Banking firm, Standard Chartered (LON:STAN) edged down 12.4%, after the company reported a 33% drop in its 3Q23 pre-tax profit after a nearly $1.00bn hit from exposure to China's banking and troubled real estate sectors.
- Consumer goods company, Unilever (LON:ULVR) dropped 2.8%, after the company reported drop in its 3Q23 revenues.
- The company’s CEO, Hein Schumacher unveiled plans to boost growth.
- Media company, WPP (LON:WPP) eased 1.0%, after the company slashed its annual outlook.
- On the other hand, paper and packaging companies, DS Smith (LON:SMDS) and Smurfit Kappa Group (LON:SKG) advanced 1.2% and 0.7%, respectively.
- The FTSE 100 index declined 0.8% to close at 7,354.57.
US MARKET REVIEW
- US markets ended lower yesterday, amid disappointing tech earnings results and stronger than expected US GDP data that reinforced rate hike fears.
- Toy company, Mattel (NASDAQ:MAT) shed 7.6%, after the company cautioned of a slowdown in demand during the holiday season.
- Package delivery company, United Parcel Service (NYSE:UPS) dropped 5.9%, after the company reported lower revenues in 3Q23 and cut its full-year forecast.
- Automobile company, Ford Motor (NYSE:F) shed 1.7%, after the company reported dismal earnings in 3Q23. The company reached a pay agreement with the United Auto Workers (UAW).
- The S&P 500 index fell 1.2% to settle at 4,137.23, while the DJIA index declined 0.8% to close at 32,784.30.
- The NASDAQ index eased 1.8% to end the trading session at 12,595.61.
ASIA MARKET REVIEW
- Asian markets are trading higher this morning.
- In Japan, transportation company, Kawasaki Kisen Kaisha (TYO:9107) has advanced 3.7%.
- On the flipside, pharmaceutical company, Takeda Pharmaceutical (TYO:4502) has dropped 6.4%.
- In Hong Kong, real estate company, hang Lung Properties (HK:0101) has gained 4.3%.
- On the other hand, insurance company, China Life Insurance (HK:2628) has shed 3.0%.
- In South Korea, aluminium company, Sam-A Aluminium (KS:006110) has jumped 15.0%.
- On the contrary, elevator company, Hyundai Elevator (KS:017800) has declined 4.6%.
- The Nikkei 225 index is trading 1.5% higher at 31,072.93.
- The Hang Seng index has added 0.8% to trade at 17,178.60, while the Kospi index is trading 0.1% higher at 2,301.67.
COMMODITIES
- At 05:30 SAST today, Brent prices rose 1.3% to trade at $89.05/bl.
- Yesterday, Brent prices fell 2.4% to settle at $87.93/bl, on easing Middle East concerns.
- At 05:30 SAST today, gold prices advanced 0.1% to trade at $1,987.38/oz. Yesterday, gold gained 0.1% to close at $1,984.82/oz, as ongoing Middle East conflict boosted demand for the safe haven yellow metal.
- Yesterday, copper declined 0.1% to close at $7,938.90/mt. Aluminium closed 0.8% lower at $2,197.35/mt.
CURRENCIES
- Yesterday, the South African rand strengthened against the US dollar. In South Africa, the producer price index (PPI) rose more than expected in September. In the US, gross domestic product (GDP) improved more than expected in 3Q23. Moreover, durable goods orders rose more than expected in September, due to rise in aircraft sales. Furthermore, pending home sales improved in September. Meanwhile, the number of people filing for initial jobless claims rose more than expected in the week ended 20 October 2023.
- The yield on benchmark government bonds rose yesterday. The yield on the 2030 bond advanced to 10.70% while that for the longer-dated 2040 issue rose to 12.82%.
- At 05:30 SAST, the US dollar is trading 0.1% lower against the South African rand at R18.9346, while the euro is trading 0.2% lower at R19.9986. At 05:30 SAST, the British pound has declined 0.2% against the South African rand to trade at R22.9702.
- Yesterday, the euro declined against most of the major currencies. In the eurozone, the European Central Bank (ECB) kept its key interest rates unchanged.
- At 05:30 SAST, the euro marginally slipped against the US dollar to trade at $1.0563, while it has marginally weakened against the British pound to trade at GBP0.8708.
ECONOMIC UPDATES
- In South Africa, the PPI rose 1.5% on a MoM basis in September, more than market expectations for a rise of 1.1%. The PPI had advanced 1.0% in the previous month.
- In South Africa, the PPI advanced 5.1% on a YoY basis in September. The PPI had climbed 4.3% in the previous month.
- The European Central Bank (ECB) kept its interest rate unchanged at 4.0%, in line with market expectations.
- In the US, durable goods orders rose 4.7% in September, more than market expectation for a rise of 1.5%. Durable good orders had declined 0.1% in the prior month.
- In the US, goods trade deficit widened to $85.80bn in September, compared to $84.50bn recorded in the previous month.
- In the US, annualised GDP rose 4.9% on a QoQ basis in 3Q23, more than market expectations for a rise of 4.2%. The GDP had advanced 2.1% in the prior quarter.
- In the US, initial jobless claims rose to a level of 210.00K in the week ended 20 October 2023, more than market expectations for a rise to a level of 208.00K. Initial jobless claims had recorded a revised level of 200.00K in the prior week.
- In the US, pending home sales unexpectedly rose 1.1% on a MoM basis in September, compared to a drop of 7.1% recorded in the previous month.
- In the US, the Kansas Fed Manufacturing Activity rose to a level of -8.00 in October, compared to a level of -13.00 recorded in the previous month.
- In Japan, the consumer price index (CPI) rose 3.3% on a YoY basis in October, compared to a rise of 2.8% recorded in the prior month.
- In Australia, the PPI rose 3.8% on a YoY basis in 3Q23, compared to a rise of 3.9% recorded in the previous month.
CORPORATE UPDATES
SOUTH AFRICA
- Afrimat Ltd (JO:AFTJ): The mining and materials company, in its 1H24 results, reported that revenues advanced 9.6% from the same period of the preceding year to R2.84bn. Its diluted EPS stood at 251.50c, compared with 246.90c recorded in the corresponding period of the previous year.
- Clicks Group Plc (JO:CLSJ): The retail company, in its FY23 results, indicated that revenue rose to R44.56bn from R42.50bn posted in the previous year. Its diluted EPS decreased 3.5% from the prior year to R10.42.
- Oceana Group Limited (JO:OCEJ): The cold storage and shipping company, in its FY23 trading update, revealed that it expects basic EPS to be 76% to 86% higher as compared to 603.00c reported in the previous year. Also, it expects HEPS to be 24% to 34% higher as compared to 606.20c recorded in the previous year. The group intends to release its annual results on 27 November 2023.
- Oil slips on rising US stockpiles and strong dollar: Oil prices fell after a rise in US crude stockpiles and a climb in the dollar index, giving up some ground gained a day earlier when prices jumped on Middle East tensions.