Market Review, Commodities, Currencies, Economic & Corporate Update - 28.08.23

  • Market Overview

South Africa Market Review

  • South African markets closed in the red on Friday, as investors assessed hawkish comments from US Federal Reserve (Fed) Chair Jerome Powell at the Jackson Hole Economic Policy Symposium.
  • Food companies, RFG Holdings (JO: RFGJ ), Tiger Brands (JO: TBSJ ) and Famous Brands (JO: FBRJ ) dropped 5.6%, 2.2% and 1.5%, respectively.
  • Lenders, Capitec Bank Holdings (JO: CPIJ ) and Standard Bank Group (JO: SBKJ ) shed 4.1% and 0.8%, respectively.
  • Gold miners, Gold Fields (JO: GFIJ ) and AngloGold Ashanti (JO: ANGJ ) declined 1.8% and 1.1%, respectively.
  • Retailers, Lewis Group (JO: LEWJ ), Clicks Group (JO: CLSJ ) and Mr Price Group (JO: MRPJ ) fell 1.6%, 1.3% and 1.2%, respectively.
  • On the flipside, platinum miners, Northam Platinum (JO: NHMJ ) and Impala Platinum (JO: IMPJ ) advanced 1.7% and 1.1%, respectively.
  • The JSE All Share index declined 0.6% to close at 73,836.01.

UK Market Review

  • The UK market finished firmer on Friday, buoyed by gains in retail sector stocks. Retailers, Tesco (LON: TSCO ) and J Sainsbury (LON: SBRY ) advanced 1.9% and 1.3%, respectively.
  • Paper and packaging companies, Smurfit Kappa Group (LON: SKG ), DS Smith (LON: SMDS ) and Mondi (LON: MNDI ) gained 1.8%, 1.1% and 0.8%, respectively.
  • On the other hand, travel and Leisure companies, International Consolidated Airlines Group S.A. (LON: ICAG ) and Whitbread (LON: WTB ) declined 1.6% and 0.5%, respectively.
  • Insurance companies, Prudential (LON: PRU ) and Legal & General Group (LON: LGEN ) shed 1.4% and 0.8%, respectively.
  • The FTSE 100 index advanced 0.1% to close at 7,338.58.

US Market Review

  • US markets ended higher on Friday, after US Fed Chair Jerome Powell signaled a potential rise in the interest rates to ease inflation.
  • Fashion retailer, Gap (NYSE: GPS ) jumped 7.2%, after the company reported higher profits in 2Q23.
  • Energy companies, Devon Energy Corporation (NYSE: DVN ) and Exxon Mobil Corporation (NYSE: XOM ) 2.0%, 1.9%, 1.3% and 0.9%, respectively.
  • On the contrary, media and entertainment companies, Warner Bros Discovery (NASDAQ: WBD ) and Paramount Global (NASDAQ: PARA ) declined 3.4% and 2.0%, respectively.
  • The S&P 500 index rose 0.7% to settle at 4,405.71, while the DJIA index advanced 0.7% to close at 34,346.90.
  • The NASDAQ index climbed 0.9% to end the trading session at 13,590.65.advanced 3.3% and 1.8%, respectively.
  • Technology companies, Intel (NASDAQ: INTC ), Salesforce (NYSE: CRM ), Apple (NASDAQ: AAPL ) and Microsoft (NASDAQ: MSFT ) gained.

Asia Market Review

  • Asian markets are trading higher this morning, after China slashed stamp duty on stock trades to boost investor confidence.
  • In Japan, electronics company, Renesas Electronics (TYO: 6723 ) has advanced 4.3%.
  • On the flipside, airlines company, Japan Airlines (TYO: 9201 ) had declined 1.5%.
  • In Hong Kong, insurance company, Ping An Insurance (HK: 2318 ) has gained 3.3%.
  • On the other hand, mining company, Zijin Mining Group (HK: 2899 ) has shed 1.5%.
  • In South Korea, fire truck company, Enplus (KS: 074610 ) has gained 15.1%.
  • On the contrary, pharmaceutical company, HanAll Biopharma (KS: 009420 ) has dropped 4.8%.
  • The Nikkei 225 index is trading 1.7% higher at 32,154.03.
  • The Hang Seng index has gained 1.9% to trade at 18,294.59, while the Kospi index is trading 0.8% higher at 2,538.42.

Commodities

  • At 05:30 SAST today, Brent prices fell 0.1% to trade at $84.38/bl.
  • On Friday, Brent prices rose 1.3% to settle at $84.48/bl, after a fire broke out in a giant naphtha storage tank at Marathon Petroleum's (NYSE: MPC ) Garyville, Louisiana refinery. Moreover, the Baker Hughes reported that the US oil rigs count fell by 8 to 512 in the week ended 25 August 2023.
  • At 05:30 SAST today, gold prices advanced 0.1% to trade at $1,915.97/oz. On Friday, gold declined 0.1% to close at $1,914.53/oz, as strength in the greenback and a rise in the US Treasury yields dented demand for the safe haven yellow metal.
  • On Friday, copper rose 0.3% to close at $8,381.50/mt. Aluminium closed 0.1% lower at $2,155.85/mt.

Currencies

  • On Friday, the South African rand strengthened against the US dollar. In the US, the Fed Chair Jerome Powell at the Jackson Hole Economic Symposium assured to proceed carefully with future monetary policy decisions. Moreover, the Michigan consumer sentiment index declined in August.
  • The yield on benchmark government bonds rose on Friday. The yield on 2030 bond rose to 10.21%. Further, the yield on the longer-dated 2030 issue rose to 12.33%.
  • At 05:30 SAST, the US dollar is trading 0.1% lower against the South African rand at R18.6131, while the euro is trading 0.1% higher at R20.1107. At 05:30 SAST, the British pound has gained 0.1% against the South African rand to trade at R23.4397.
  • On Friday, the euro mostly declined against most of the major currencies. In Germany, gross domestic product (GDP) remained flat as expected in 2Q23. Meanwhile, the Ifo business confidence dropped for a fourth consecutive month in August.
  • At 05:30 SAST, the euro advanced 0.1% against the US dollar to trade at $1.081, while it has marginally weakened against the British pound to trade at GBP0.8581.

Economic Updates

  • In Germany, seasonally adjusted gross domestic product (GDP) recorded a flat reading on a QoQ basis in 2Q23, compared to a drop of 0.3% recorded in the prior quarter.
  • In Germany, the Ifo business climate index fell to a level of 85.70 in August, more than market expectations for a drop to a level of 86.70. The Ifo business climate index had recorded a revised level of 87.40 in the prior month.
  • In Germany, the Ifo business expectations index unexpectedly eased to a level of 82.60 in August, compared to a revised reading of 83.60 recorded in the prior month.
  • In Germany, the Ifo current assessment index eased to a level of 89.00 in August, compared to a revised level of 91.40 recorded in the prior month. Markets were expecting the index to fall to a level of 90.00.
  • In the US, the Michigan consumer sentiment index declined to a level of 69.50 in August, more than market expectations for a drop to a level of 71.20. The Michigan consumer sentiment index had recorded a reading of 71.60 in the prior month.
  • The US Federal Reserve (Fed) Chair Jerome Powell at the Jackson Hole symposium indicated that the central bank would “proceed carefully” on any further rate increases.
  • In Australia, seasonally adjusted retail sales rose 0.5% on a MoM basis in July, more than market expectations and compared to a drop of 0.8% recorded in the prior month.

Corporate Updates

South Africa

  • Northam Platinum Holdings Limited (JO: NPHJ ): The platinum mining company, in its FY23 results, indicated that its revenue rose to R39.55bn from R34.06bn posted in the previous year. Its diluted EPS stood at 654.50c, compared with 2,614.0c recorded in the previous year.
  • Grindrod Limited (JO: GNDJ ): The logistics company, in its 1H23 results, announced that revenues advanced 11.2% from the same period of the preceding year to R2.47bn. Its diluted EPS stood at 66.50c, compared with 57.70c recorded in the corresponding period of the previous year.
  • Oil leaps as dollar lifts: Oil prices jumped more than 1.0% as the dollar firmed ahead of an eagerly awaited speech by the head of the US Federal Reserve for hints on the outlook for interest rates.

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