SOUTH AFRICA MARKET REVIEW
- South African markets closed in the green yesterday, as investors await corporate earnings from artificial intelligence (AI) company Nvidia (NASDAQ:NVDA).
- Telecommunications companies, Telkom SA SOC (JO:TKGJ) and Blue Label Telecoms (JO:BLUJ) advanced 2.5% and 1.5%, respectively.
- Property developers, Resilient REIT (JO:RESJ), Burstone Group (JO:BTNJ), Growthpoint Properties (JO:GRTJ) and Emira Property Fund (JO:EMIJ) gained 2.2%, 2.1%, 1.7% and 1.1%, respectively.
- Banking companies, Absa Group (JO:ABGJ), Capitec Bank Holdings (JO:CPIJ), FirstRand (JO:FSRJ) and Standard Bank Group (JO:SBKJ) rose 1.3%, 1.1%, 0.8% and 0.7%, respectively.
- Retailers, Shoprite Holdings (JO:SHPJ) and Lewis Group (JO:LEWJ) added 1.1% and 0.9%, respectively.
- The JSE All Share index advanced 0.4% to close at 84,553.56.
UK MARKET REVIEW
- The UK market finished firmer yesterday, boosted by gains in travel and mining sector stocks.
- Business supplies distribution company, Bunzl (LON:BNZL) surged 8.0%, after the company reported growth in interim profits and raised its annual adjusted operating profit forecast.
- Travel and leisure companies, easyJet (LON:EZJ), International Consolidated Airlines S.A. (LON:ICAG) and Whitbread (LON:WTB) advanced 6.9%, 2.0% and 1.8%, respectively.
- Miners, Antofagasta (LON:ANTO) and Rio Tinto (LON:RIO) gained 1.7% and 1.1%, respectively.
- On the other hand, real estate companies, Barratt Developments (LON:BDEV), Berkeley Group Holdings (LON:BKGH) and Taylor Wimpey (LON:TW) dropped 6.6%, 4.3% and 3.1%, respectively.
- The FTSE 100 index advanced 0.2% to close at 8,345.46.
US MARKET REVIEW
- US markets ended higher yesterday, ahead of major corporate results as well as a slew of economic data due later this week.
- Cruise Line companies, Royal Caribbean Group (NYSE:RCL) and Norwegian Cruise Line Holdings (NYSE:NCLH) advanced 4.3% and 3.6%, respectively.
- On the contrary, media and entertainment companies, Paramount Global (NASDAQ:PARA) plunged 7.2%, after Edgar Bronfman Jr. withdrew his bid to acquire the company, paving the way for Skydance Media to take control.
- Electric vehicles company, Tesla (NASDAQ:TSLA) dropped 1.9%, after Canada announced a 100% tariff on imports of Chinese electric vehicles, including those made by the company.
- The S&P 500 index rose 0.2% to settle at 5,625.80, while the DJIA index marginally advanced to close at 41,250.50.
- The NASDAQ index climbed 0.2% to end the trading session at 17,754.82.
ASIA MARKET REVIEW
- Asian markets are trading lower this morning.
- In Japan, chemical company, Sumitomo Chemical (TYO:4005) has declined 3.3%.
- On the flipside, automobile company, Toyota Motor Corporation (TYO:7203) has gained 3.4%.
- In Hong Kong, automobile company, Li Auto (NASDAQ:LI) has shed 5.2%.
- On the other hand, sports products company, Anta Sports Products (HK:2020) has advanced 5.8%.
- In South Korea, engineering company, Sambu Engineering & Construction (KS:001470) has dropped 6.1%.
- On the contrary, pharmaceutical company, Daewoong Pharmaceutical (KS:069620) has jumped 6.0%.
- The Nikkei 225 index is trading 0.2% lower at 38,199.52.
- The Hang Seng index has shed 0.9% to trade at 17,705.97, while the Kospi index is trading 0.5% lower at 2,657.17.
COMMODITIES
- At 05:30 SAST today, Brent prices marginally rose to trade at $79.56/bl.
- Yesterday, Brent prices fell 2.3% to settle at $79.55/bl, amid worries that slower economic growth in the US and China might dampen energy demand. Additionally, the American Petroleum Institute (API) reported that crude oil inventories declined by 3.40mn bls in the week ended 23 August 2024.
- At 05:30 SAST today, gold prices declined 0.4% to trade at $2,515.03/oz. Yesterday, gold gained 0.3% to close at $2,525.30/oz, as a weaker greenback boosted demand for the safe haven yellow metal.
- Yesterday, copper rose 1.7% to close at $9,326.35/mt. Aluminium closed 0.3% higher at $2,549.42/mt.
CURRENCIES
- Yesterday, the South African rand weakened against the US dollar. In the US, the housing price index unexpectedly dropped in June. Moreover, the Richmond Fed manufacturing activity slowed in August.
- The yield on benchmark bonds were unchanged yesterday. The yield on the 2034 generic bond stood at 10.42%, while that for the longer-dated 2044 generic issue stood at 11.28%.
- At 05:30 SAST, the US dollar is trading 0.3% higher against the South African rand at R17.7555, while the euro is trading 0.1% higher at R19.8246. At 05:30 SAST, the British pound has gained 0.2% against the South African rand to trade at R23.5193.
- Yesterday, the euro mostly declined against most of the major currencies. In Germany, gross domestic product (GDP) fell in 2Q24, in line with market expectations.
- At 05:30 SAST, the euro slipped 0.2% against the US dollar to trade at $1.1167, while it has weakened 0.1% against the British pound to trade at GBP0.8431.
ECONOMIC UPDATES
- In Germany, gross domestic product (GDP) fell 0.1% on a QoQ basis in 2Q24, in line with market expectations. GDP had recorded a rise of 0.2% in the previous quarter.
- In the US, the consumer confidence index rose more than expected to a level of 103.30 in August, compared to a level of 101.90 recorded in the previous month.
- In the US, the housing price index unexpectedly dropped 0.1% on a MoM basis in June, compared to a flat reading recorded in the prior month.
- In the US, the Richmond Fed manufacturing index unexpectedly dropped to a level of -19.00 in August, compared to a level of -17.00 recorded in the previous month.
CORPORATE UPDATES
SOUTH AFRICA
- Pick ‘n Pay Stores Limited (JO:PIKJ): The retail company, in its trading update for the 21 weeks ended 21 July 2024, revealed that group sales increased 4.5%, with notable performance from the Boxer segment, which grew 13.5% in sales. Clothing sales growth in standalone stores (reported within the Pick n Pay segment) stood at 10.3% (0.7% like-for-like), with like-for-like growth being impacted by the late arrival of winter weather as well as port delays. Moreover, the company expects EPS and HEPS to decrease by more than 20% as compared with the prior year. This decline is attributed to increased bank finance costs and a lower gross profit margin due to higher promotional activities. Despite these short-term challenges, the group anticipates overall profit improvement for FY25.
- Wilson-Bayly Holmes-Ovcon Limited (JO:WBOJ): The construction company, in its FY24 trading update, revealed that it expects attributable EPS to be 15.0% to 25.0%, higher as compared with 1,490.00c recorded in the previous year. Also, it expects HEPS to be 25.0% to 35.0%, higher as compared with 1,515.00c recorded in the previous year. The company intends to release its results for the year ended 30 June 2024 on 10 September 2024.
- Stor-Age Property REIT Limited (JO:SSSJ): The real estate investment trust company, in its trading update for the four-month period ended 31 July 2024, reported strong trading performance in the UK, with occupancy in the owned portfolio increasing by 4.7% to close at 86.5%. In South Africa, occupancy increased by 2.3% to close at 91.4%. Moreover, the achieved average rental rate increased by 8.4% and 1.9%, in SA and the UK, respectively. Notably, it acquired the Extra Attic property in Cape Town for R73.00mn and completed developments at Kramerville and Century City.
- Impairments devour Master Drilling’s (JO:MDIJ) profit: Master Drilling’s profit fell by three-quarters for the six months to end-June, hit by impairment losses related to its mobile tunnel-boring equipment, property and plant.
- Top court agrees to hear Vodacom’s appeal in Please Call Me case: The Constitutional Court would hear Vodacom (JO:VODJ) SA’s application for leave to appeal in the long-running Please Call Me matter, the company said.