SOUTH AFRICA MARKET REVIEW
- South African markets closed in the red yesterday, as investors await the US Federal Reserve’s (Fed) monetary policy decision.
- Telecommunications companies, Blue Label Telecoms (JO:BLUJ), MTN Group (JO:MTNJ) and Vodacom Group (JO:VODJ) dropped 5.0%, 4.2% and 3.9%, respectively.
- Platinum miners, Northam Platinum (JO:NPHJ), Anglo American Platinum (JO:AMSJ) and Impala Platinum (JO:IMPJ) declined 3.6%, 3.2% and 3.1%, respectively.
- Pharmaceutical companies, Aspen Pharmacare (JO:APNJ), Adcock Ingram Holdings (JO:AIPJ) and Life Healthcare Group (JO:LHCJ) shed 3.5%, 2.6% and 1.7%, respectively.
- Lenders, FirstRand (JO:FSRJ), Capitec Bank Holdings (JO:CPIJ) and Standard Bank Group (JO:SBKJ) fell 2.9%, 2.3% and 1.3%, respectively.
- Retailers, Pick ‘n Pay Stores (JO:PIKJ), SPAR Group (JO:SPPJ), Mr Price Group (JO:MRPJ) and Clicks Group (JO:CLSJ) eased 2.6%, 2.2%, 1.9% and 1.3%, respectively.
- The JSE All Share index declined 1.0% to close at 74,370.56.
UK MARKET REVIEW
- The UK market finished weaker yesterday, led by losses in insurance sector stocks.
- Paper and packaging companies, Mondi (LON:MNDI) and Smurfit Kappa Group (LON:SKG) plunged 10.4% and 1.5%, respectively.
- Insurance companies, Prudential (LON:PRU), Admiral Group (LON:ADML) and Legal & General Group (LON:LGEN) dropped 3.2%, 1.1% and 0.7%, respectively.
- Retailers, Ocado Group (LON:OCDO) and J Sainsbury (LON:SBRY) declined 1.8% and 0.8%, respectively.
- Energy companies, Shell (LON:RDSa) and BP (LON:BP) each eased 0.9%. On the other hand, Airlines company, Ryanair (NASDAQ:RYAAY) advanced 4.0%.
- The company cut its profit outlook for FY23, but indicated that it might end 4Q23 with an uplift due to Easter.
- The FTSE 100 index marginally declined to close at 7,632.74.
US MARKET REVIEW
- US markets ended higher yesterday, ahead of major corporate earnings, Fed rate decision and as the Treasury Department expects to borrow less in the first quarter than earlier anticipated.
- Restaurant companies, Domino’s Pizza (NYSE:DPZ), Darden Restaurants (NYSE:DRI) and Wendy’s (NASDAQ:WEN) jumped 3.4%, 1.6% and 1.2%, respectively.
- Technology companies, Salesforce (NYSE:CRM), NVIDIA Corporation (NASDAQ:NVDA) and Microsoft (NASDAQ:MSFT) advanced 2.8%, 2.4% and 1.4%, respectively.
- Media and entertainment companies, Walt Disney (NYSE:DIS) and Netflix (NASDAQ:NFLX) gained 2.2% and 0.9%, respectively.
- Financial services companies, Visa (NYSE:V) and Goldman Sachs Group (NYSE:GS) added 2.1% and 0.7%, respectively.
- The S&P 500 index rose 0.8% to settle at 4,927.93, while the DJIA index advanced 0.6% to close at 38,333.45.
- The NASDAQ index climbed 1.1% to end the trading session at 15,628.04.
ASIA MARKET REVIEW
- Asian markets are trading mostly higher this morning.
- In Japan, transportation company, Kawasaki Kisen Kaisha (TYO:9107) has advanced 2.4%.
- On the flipside, pharmaceutical company, Chugai Pharmaceutical (TYO:4519) has declined 1.6%.
- In Hong Kong, real estate company, Longfor Group Holdings (HK:0960) has plunged 7.6%.
- On the other hand, pharmaceutical company, Sinopharm Group (HK:1099) has added 0.5%.
- In South Korea, logistics services company, Kukbo (KQ:066620) has surged 13.9%.
- On the contrary, shipping company, Heung-A-Shipping (KS:003280) has plummeted 7.4%.
- The Nikkei 225 index is trading 0.2% higher at 36,113.83.
- The Hang Seng index is trading 2.0% lower at 15,750.79, while the Kospi index is trading 0.2% higher at 2,503.86.
COMMODITIES
- At 05:30 SAST today, Brent prices rose 0.3% to trade at $82.64/bl, on supply concerns.
- Yesterday, Brent prices fell 1.4% to settle at $82.4/bl, as growing concerns over weaker Chinese property sector raised demand concerns.
- At 05:30 SAST today, gold prices marginally advanced to trade at $2,032.19/oz. Yesterday, gold gained 0.7% to close at $2,031.75/oz, as rising tensions in the Middle East boosted demand for the safe haven yellow metal.
- Yesterday, copper declined 0.3% to close at $8,420.60/mt. Aluminium closed 1.1% lower at $2,250.65/mt.
CURRENCIES
- Yesterday, the South African rand weakened against the US dollar. In the US, the Dallas Fed manufacturing business index declined in January.
- The yield on benchmark government bonds were mixed yesterday. The yield on the 2030 bond advanced to 9.77%, while that for the longer-dated 2040 issue remained unchanged at 12.20%.
- At 05:30 SAST, the US dollar is trading marginally higher against the South African rand at R18.8166, while the euro is trading 0.1% higher at R20.3899. At 05:30 SAST, the British pound has gained 0.1% against the South African rand to trade at R23.9237.
- Yesterday, the euro declined against most of the major currencies.
- At 05:30 SAST, the euro marginally slipped against the US dollar to trade at $1.0834, while it has slightly gained against the British pound to trade at GBP0.8526.
ECONOMIC UPDATES
- In the US, the Dallas Fed manufacturing business index fell to a level of -27.40 in January, compared to a revised level of -10.40 recorded in the prior month.
- In Japan, the unemployment rate dropped to 2.4% in December, compared to 2.5% recorded in the previous month.
- In Australia, seasonally adjusted retail sales dropped 2.7% on a MoM basis in December, more than market expectations for a drop of 0.9%. Retail sales had advanced 2.0% in the previous month.
CORPORATE UPDATES
SOUTH AFRICA
- Truworths International Limited (JO:TRUJ): The clothing retail company, in its 1H24 business update, revealed that group retail sales increased by 8.2% to R12.20bn. Retail sales for Truworths Africa (comprising mainly of the Truworths businesses in South Africa) decreased by 0.3% to R8.40bn. Retail sales for the UK-based Office segment increased by 15.6% to GBP162.00mn. Moreover, the company expects EPS to be between 1.0% to 5.0% higher as compared with 509.50c recorded in the previous year. The group’s interim results are scheduled to be released on or about 29 February 2024
- ArcelorMittal South Africa Limited (JO:ACLJ): The steel company, in its trading and business update for the year ended 31 December 2023, revealed that it expects loss per share to be between R3.25 and R3.80, as compared with an EPS of R2.36 recorded in the previous year. Also, it expects headline loss per share to be between R1.55 and R1.85, as compared with HEPS of R2.34 recorded in the previous year. Moreover, it stated that as a result of challenging trading environment, earnings levels were severely pressurised, aggravated further by a substantial impairment charge of R2.10bn recognised against the property plant and equipment and other intangible assets of the Longs Business only. Furthermore, the company intends release its reviewed condensed consolidated financial statements for the year ended 31 December 2023 on 8 February 2024.
- Oil price affected by news of drone attack on US troops in Jordan: Oil prices dipped as China’s ailing property sector took another hit, while a drone attack on US forces in Jordan added to supply disruption concerns in the Middle East and Houthi militants stepped up attacks on vessels in the Red Sea.