Market Review, Commodities, Currencies, Economic & Corporate Update - 28.12.23

  • Market Overview

SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the green yesterday, boosted by gains in technology stocks.
  • Technology companies, Prosus N.V. (JO: PRXJn ) and Naspers (JO: NPNJn ) rallied 9.9% and 9.6%, respectively, after Chinese regulators pledged to make improvements to proposed rules aimed at curbing excessive online gaming and spending.
  • Platinum miners, Impala Platinum (JO: IMPJ ), Anglo American Platinum (JO: AMSJ ) and Northam Platinum (JO: NPHJ ) jumped 7.7%, 5.5% and 3.2%, respectively.
  • Retailers, Shoprite Holdings (JO: SHPJ ), SPAR Group (JO: SPPJ ), Clicks Group (JO: CLSJ ) and Mr Price Group (JO: MRPJ ) advanced 3.9%, 2.8%, 2.6% and 1.8%, respectively.
  • Gold miners, AngloGold Ashanti (JO: ANGJ ) and Gold Fields (JO: GFIJ ) gained 3.3% and 1.5%, respectively.
  • Lenders, Standard Bank (JO: SBKJ ), Nedbank Group (JO: NEDJ ) and Capitec Bank Holdings (JO: CPIJ ) rose 2.9%, 1.9% and 0.7%, respectively.
  • The JSE All Share index advanced 3.1% to close at 76,657.94.

UK MARKET REVIEW

  • The UK market finished firmer yesterday, supported by gains in automobile sector stocks and amid optimism that major central banks, including the Bank of England (BoE), might initiate interest rate cuts early next year.
  • Retailers, Ocado Group (LON: OCDO ), JD Sports Fashion (LON: JD ) and Tesco (LON: TSCO ) advanced 3.9%, 1.8% and 0.9%, respectively.
  • Miners, Fresnillo (LON: FRES ) and Glencore (LON: GLEN ) (JO: GLNJ ) gained 2.0% and 1.2%, respectively.
  • Banking firms, NatWest Group (LON: NWG ), Barclays (LON: BARC ) and Standard Chartered (LON: STAN ) added 1.3%, 1.2% and 1.1%, respectively.
  • Insurance companies, Prudential (LON: PRU ), Admiral Group (LON: ADML ) and Legal & General Group (LON: LGEN ) increased 1.2%, 1.0% and 0.5%, respectively.
  • Pharmaceutical company, AstraZeneca (LON: AZN ) rose 0.9%, following an agreement to acquire Gracell Biotechnologies (NASDAQ: GRCL ) for a consideration of $1.20bn.
  • The FTSE 100 index advanced 0.4% to close at 7,724.95.

US MARKET REVIEW

  • US markets ended higher yesterday, amid drop in the US treasury yields and hopes that the US Federal Reserve (Fed) could begin its rate cut as soon as March 2024.
  • Pharmaceutical company, Coherus Biosciences (NASDAQ: CHRS ) surged 23.4%, after the US FDA approved its drug delivery device for infection-fighting treatment.
  • Peers, Moderna (NASDAQ: MRNA ) and Regeneron Pharmaceuticals (NASDAQ: REGN ) advanced 3.5% and 2.9%, respectively.
  • Financial services companies, Goldman Sachs Group (NYSE: GS ) and JP Morgan Chase (NYSE: JPM ) gained 0.8% and 0.6%, respectively.
  • On the contrary, oilfield services companies, Schlumberger (NYSE: SLB ) and Halliburton (NYSE: HAL ) shed 1.2% and 0.7%, respectively.
  • The S&P 500 index rose 0.1% to settle at 4,781.58, while the DJIA index advanced 0.3% to close at 37,656.52.
  • The NASDAQ index climbed 0.2% to end the trading session at 15,099.18.

ASIA MARKET REVIEW

  • Asian markets are trading mostly higher this morning, tracking overnight gains on Wall Street.
  • In Japan, transportation company, Kawasaki Kisen Kaisha (TYO: 9107 ) has dropped 4.1%.
  • On the flipside, automobile company, Suzuki Motor Corporation (TYO: 7269 ) has gained 1.6%.
  • In Hong Kong, automobile company, Geely Automobile Holdings (HK: 0175 ) jumped 6.4%.
  • On the other hand, consumer electronics company, Xiaomi Corporation (HK: 1810 ) has eased 0.9%.
  • In South Korea, engineering company, Taeyoung Engineering and Construction (KS: 009410 ) has surged 11.6%.
  • On the contrary, footwear company, Hwaseung Enterprise (KS: 241590 ) has shed 3.1%.
  • The Nikkei 225 index is trading 0.5% lower at 33,503.94.
  • The Hang Seng index has gained 1.6% to trade at 16,890.70, while the Kospi index is trading 1.1% higher at 2,642.64.

COMMODITIES

  • At 05:30 SAST today, Brent prices rose 0.2% to trade at $79.81/bl.
  • Yesterday, Brent prices fell 1.8% to settle at $79.65/bl, as shipping firms initiated the scheduling of container vessels to navigate through the Suez Canal and Red Sea, notwithstanding additional assaults by Yemen's Houthi militia. Moreover, the American Petroleum Institute (API) reported that crude oil inventories rose by 1.84mn bls in the week ended 22 December 2023.
  • At 05:30 SAST today, gold prices advanced 0.3% to trade at $2,086.70/oz. Yesterday, gold increased 0.6% to close at $2,079.57/oz, as a weaker dollar and a drop in the US Treasury yields boosted demand for the safe haven yellow metal.
  • Yesterday, copper rose 0.3% to close at $8,511.25/mt. Aluminium closed 3% higher at $2,387.00/mt.

CURRENCIES

  • Yesterday, the South African rand strengthened against the US dollar. In the US, the Richmond Fed manufacturing index declined more than expected in December.
  • The yield on benchmark government bonds fell yesterday. The yield on 2030 bond declined to 9.74% while that for the longer-dated 2040 issue fell to 12.11%.
  • At 05:30 SAST, the US dollar is trading 0.3% lower against the South African rand at R18.3509, while the euro is trading 0.1% lower at R20.4007. At 05:30 SAST, the British pound has declined 0.1% against the South African rand to trade at R23.5109.
  • Yesterday, the euro mostly declined against most of the major currencies.
  • At 05:30 SAST, the euro advanced 0.1% against the US dollar to trade at $1.1117, while it has marginally gained against the British pound to trade at GBP0.8678.

ECONOMIC UPDATES

  • In the US, the Richmond Fed manufacturing index dropped to a level of -11.00 in December, more than market expectations for a drop to a level of -7.00. The Richmond Fed manufacturing index had recorded a level of -5.00 in the previous month.
  • In Japan, housing starts dropped 8.5% on a YoY basis in November, more than market expectations for a drop of 4.3%. Housing starts had declined 6.3% in the previous month.
  • In Japan, industrial production rose 5.3% on a YoY basis in November, compared to a rise of 1.1% recorded in the previous month.

CORPORATE UPDATES

UK AND US

  • AstraZeneca Plc (LON: AZN ): The company announced that it has entered into a definitive agreement to acquire Gracell Biotechnologies Inc for an upfront cash consideration of approximately $1.00bn.
  • HgCapital Trust Plc (LON: HGT ): The investment company announced that it has agreed a partial sale of IRIS Software Group (IRIS) for a consideration of approximately GBP42.10mn.

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