Market Review, Commodities, Currencies, Economic & Corporate Update - 30.11.23

  • Market Overview

SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the red yesterday, as investors assessed stronger than expected US economic data.
  • Retailers, Cashbuild (JO: CSBJ ) and Pick ‘n Pay Stores (JO: PIKJ ) dropped 3.8% and 2.8%, respectively.
  • Diversified miners, African Rainbow Minerals (JO: ARIJ ), Kumba Iron Ore (JO: KIOJ ), Pan African Resources (JO: PANJ ) and Exxaro Resources (JO: EXXJ ) declined 3.4%, 3.0%, 2.6% and 1.4%, respectively.
  • Pharmaceutical companies, Adcock Ingram Holdings (JO: AIPJ ), Life Healthcare Group (JO: LHCJ ) and Netcare (JO: NTCJ ) eased 2.7%, 0.8% and 0.7%, respectively.
  • On the flipside, gold miners, Gold Fields (JO: GFIJ ) and AngloGold Ashanti (JO: ANGJ ) advanced 3.7% and 1.9%, respectively.
  • Property developers, Growthpoint Properties (JO: GRTJ ), Vukile Property Fund (JO: VKEJ ) and Resilient REIT (JO: RESJ ) rose 3.6%, 2.4% and 1.6%, respectively.
  • The JSE All Share index declined 0.5% to close at 75,241.44.

UK MARKET REVIEW

  • The UK market finished weaker for a third consecutive session yesterday, following hawkish comments from Bank of England (BoE) Governor Andrew Bailey.
  • Insurance companies, Prudential (LON: PRU ) and Aviva (LON: AV ) dropped 3.5% and 2.1%, respectively.
  • Banking companies, Standard Chartered (LON: STAN ) and HSBC Holdings (LON: HSBA ) declined 3.3% and 2.0%, respectively.
  • Energy companies, Shell (LON: RDSa ) and BP (LON: BP ) eased 1.1% and 0.6%, respectively.
  • On the other hand, retailer, JD Sports Fashion (LON: JD ) jumped 5.7%, after the company’s US peer Foot Locker (NYSE: FL ) projected upbeat annual profit outlook.
  • Paper and packaging companies, Smurfit Kappa Group (LON: SKG ), DS Smith (LON: SMDS ) and Mondi (LON: MNDI ) advanced 2.9%, 1.5% and 1.4%, respectively.
  • Real estate companies, Berkeley Group Holdings (LON: BKGH ) and Land Securities Group (LON: LAND ) rose 1.2% and 1.1%, respectively.
  • The FTSE 100 index declined 0.4% to close at 7,423.46.

US MARKET REVIEW

  • US markets ended mostly lower yesterday, following hawkish comments from the US Federal Reserve (Fed) officials.
  • Energy companies, Constellation Energy Corporation (NASDAQ: CEG ), Exxon Mobil Corporation (NYSE: XOM ) and Chevron Corporation (NYSE: CVX ) dropped 3.1%, 1.5% and 1.1%, respectively.
  • On the contrary, cloud-based data management company, NetApp (NASDAQ: NTAP ) surged 14.3%, after the company reported better than expected 2Q23 results and raised its annual profit guidance.
  • Technology companies, Salesforce (NYSE: CRM ) and Intel (NASDAQ: INTC ) advanced 2.4% and 1.6%, respectively.
  • Financial services companies, Goldman Sachs Group (NYSE: GS ) and American Express (NYSE: AXP ) rose 1.6% and 1.1%, respectively.
  • The S&P 500 index fell 0.1% to settle at 4,550.58, while the DJIA index marginally advanced to close at 35,430.42.
  • The NASDAQ index eased 0.2% to end the trading session at 14,258.49.

ASIA MARKET REVIEW

  • Asian markets are trading mostly lower this morning, amid a drop in Chinese manufacturing activity.
  • In Japan, online electronics marketplace company, Mercari (TYO: 4385 ) has shed 3.0%.
  • On the flipside, transportation company, Kawasaki Kisen Kaisha (TYO: 9107 ) has advanced 1.8%.
  • In Hong Kong, insurance company, AIA Group (HK: 1299 ) has dropped 3.3%.
  • On the other hand, pharmaceutical company, Hansoh Pharmaceutical (HK: 3692 ) has jumped 4.2%.
  • In South Korea, trading company, STX Corporation (KS: 011810 ) has surged 13.6%.
  • On the contrary, engineering company, SC Engineering (KS: 023960 ) has declined 3.8%.
  • The Nikkei 225 index is trading 0.2% lower at 33,255.37.
  • The Hang Seng index is trading 0.3% higher at 17,039.83, while the Kospi index is trading marginally higher at 2,520.00.

COMMODITIES

  • At 05:30 SAST today, Brent prices fell 0.2% to trade at $82.91/bl.
  • Yesterday, Brent prices rose 1.7% to settle at $83.1/bl, amid expectations of further supply cuts by the OPEC+ ahead of its policy meeting. Moreover, the US Energy Information Administration (EIA) reported that the US crude inventories advanced by 1.85mn bls in the week ended 24 November 2023.
  • At 05:30 SAST today, gold prices marginally advanced to trade at $2,045.14/oz. Yesterday, gold gained 0.2% to close at $2,044.59/oz.
  • Yesterday, copper rose 1.3% to close at $8,383.60/mt. Aluminium closed 0.4% lower at $2,213.65/mt.

CURRENCIES

  • Yesterday, the South African rand weakened against the US dollar. In the US, gross domestic product (GDP) rose more than expected in 3Q23.
  • The yield on benchmark government bonds fell yesterday. The yield on the 2030 bond declined to 9.92% while that for the longer-dated 2040 issue fell to 12.09%.
  • At 05:30 SAST, the US dollar is trading 0.2% lower against the South African rand at R18.716, while the euro is trading 0.1% lower at R20.54. At 05:30 SAST, the British pound has declined 0.2% against the South African rand to trade at R23.7694.
  • Yesterday, the euro mostly declined against most of the major currencies. In Germany, the consumer price index (CPI) eased to its lowest levels in November. In the eurozone, both. the economic confidence index and consumer confidence index improved in November.
  • At 05:30 SAST, the euro advanced 0.1% against the US dollar to trade at $1.0976, while it has marginally weakened against the British pound to trade at GBP0.8642.

ECONOMIC UPDATES

  • In the UK, mortgage approvals rose to a level of 47.38K in October, more than market expectations for a rise to a level of 45.00K. Mortgage approvals had recorded a revised level of 43.68K in the previous month.
  • In Germany, the CPI dropped 0.4% on a MoM basis in November, more than market expectations for a drop of 0.2%.
  • In the eurozone, the business climate index dropped to a level of -0.39 in November, compared to a level of -0.33 recorded in the prior month.
  • In the eurozone, the consumer confidence index remained advanced to a level of -16.90 in November, in line with market expectations. The consumer confidence index recorded a level of -17.90 in the prior month.
  • In the eurozone, the economic sentiment index rose to a level of 93.80 in November, more than market expectations for a rise to a level of 93.70. The economic sentiment index had recorded a revised level of 93.50 in the previous month.
  • In the US, the MBA mortgage applications rose 0.3% in the week ended 24 November 2023, compared to a rise of 3.0% in the prior week.
  • In the US, goods trade deficit widened to $89.80bn in October, compared to a deficit of $86.30bn recorded in the previous month.
  • In the US, annualised GDP rose 5.2% on a QoQ basis in 3Q23, more than market expectations for a rise of 5.0%. Annualised GDP had advanced 2.1% in the previous quarter.
  • In Canada, current account deficit widened to C$3.22bn in 3Q23, compared to a revised deficit of C$7.32bn in the previous quarter.
  • In Japan, industrial production rose 0.9% on a YoY basis in October, compared to a drop of 4.4% recorded in the prior month.
  • In China, the NBS manufacturing PMI unexpectedly fell to a level of 49.40 in November, compared to a level of 49.50 recorded in the previous month.

CORPORATE UPDATES

SOUTH AFRICA

  • Naspers Limited (JO: NPNJn ): The technology company, in its 1H24 results, revealed that its revenue advanced 9.0%, from the same period of the previous year to $3.01bn. Its diluted EPS advanced to 736.00 US cents from 477.00 US cents posted in the corresponding period.
  • Vukile Property Fund Limited (JO: VKEJ ): The real estate company, in its interim results, announced that its property revenue advanced to R2.02bn from R1.76bn posted in the same period of the prior year. Its basic and diluted EPS stood at 113.43c as compared with 108.65c reported in the corresponding period of the prior year.
  • Grindrod Limited (JO: GNDJ ): The shipping company, in its 3Q23 results, indicated that revenues rose 4.9% from the same period of the prior year to $112.46mn. Its diluted loss per share stood at $0.44.
  • Delta Property Fund Limited (JO: DLTJ ): The real estate investment trust company announced that it has entered into a sale agreement with Goldview Africa Proprietary Limited, to dispose of its property situated at 5 Walnut Road, Durban, Kwa-Zulu-Natal and as more commonly known as ‘Smartxchange’, including immovable assets, for a cash consideration of R46.00mn.
  • Shoprite (JO: SHPJ ) says its crime fighters help reduce robberies at its shops: A command centre staffed by a specialist team of investigators, data and crime analysts and law experts at the Shoprite group has led to a drop in armed robberies and burglaries at its shops nationwide, the retailer says.

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