SOUTH AFRICA MARKET REVIEW
- South African markets closed in the red yesterday, after the South African Reserve Bank (SARB) kept its repo rate unchanged but warned about sticky inflation being a barrier for rate cuts.
- Retailer, Woolworths Holdings (JO:WHLJ) shed 7.2%, after the company issued dismal trading update indicating a drop in annual earnings.
- Peers, the Foschini Group (JO:TFGJ), Pepkor Holdings (JO:PPHJ), Pick ‘n Pay Stores (JO:PIKJ) and Mr Price Group (JO:MRPJ) declined 6.9%, 6.4%, 5.2% and 4.3%, respectively.
- Platinum miners, Northam Platinum Holdings (JO:NPHJ), Impala Platinum Holdings (JO:IMPJ) and Anglo American Platinum (JO:AMSJ) dropped 6.9%, 6.6% and 5.0%, respectively.
- Financial services companies, Standard Bank Group (JO:SBKJ), FirstRand (JO:FSRJ), Absa Group (JO:ABGJ) and Nedbank Group (JO:NEDJ) eased 5.1%, 5.0%, 3.5% and 2.7%, respectively.
- The JSE All Share index closed 1.8% lower at 77,161.71.
UK MARKET REVIEW
- The UK market finished firmer yesterday, boosted by gains in Auto Trader.
- Online car marketplace company, Auto Trader Group (LON:AUTOA) jumped 12.9%, after the company said full-year profits rose driven by a double-digit revenue growth across all its segments.
- Peers, Ocado Group (LON:OCDO), Frasers Group and JD Sports Fashion (LON:JD) gained 6.5%, 6.1% and 5.6%, respectively.
- Real estate companies, British Land Co. (LON:BLND), Land Securities Group (LON:LAND) and Segro (LON:SGRO) advanced 3.4%, 3.2% and 3.0%, respectively.
- Travel and leisure companies, Whitbread (LON:WTB), InterContinental Hotels Group (LON:IHG) and International Consolidated Airlines Group SA (LON:ICAG) added 1.9%, 0.9% and 0.8%, respectively.
- Tobacco companies, British American Tobacco (JO:SNHJ) and Imperial Brands (LON:IMB) gained 1.4% and 1.0%, respectively.
- On the flipside, miners, Antofagasta (LON:ANTO) and BHP Group (LON:BHPB) (JO:BHPJ) shed 2.9% and 1.6%, respectively.
- The FTSE 100 index advanced 0.6% to close at 8,231.05.
US MARKET REVIEW
- US markets ended in the red yesterday, led by losses in technology sector stocks.
- Technology company, Salesforce (NYSE:CRM) edged down 19.7%, after the company forecasted lower than expected second-quarter profits and revenues amid weaker client spending on its cloud and enterprise business products.
- Peers, Microsoft (NASDAQ:MSFT) and International Business Machines Corporation (NYSE:IBM) shed 3.4% and 0.9%, respectively.
- Dell Technologies (NYSE:DELL) shed 5.2%, even after the reported upbeat results in 1Q25. On the contrary, HP (NYSE:HPQ) gained 17.0%, after the company reported better-than-expected revenues in 2Q24.
- The S&P 500 index declined 0.6% to settle at 5,235.48, while the DJIA index declined 0.9% to close at 38,111.48.
- The NASDAQ index shed 1.1% to end the trading session at 16,737.08.
ASIA MARKET REVIEW
- Asian markets are trading higher this morning, after Chinese manufacturing activity unexpectedly fell in May, securing hopes for fresh stimulus as a protracted property crisis continues to weigh.
- In Japan, e-commerce company, Mercari (TYO:4385) has advanced 3.5%.
- On the flipside, IT security company, Trend Micro (TYO:4704) has eased 1.2%.
- In Hong Kong, sportswear company, Li Ning Co. (HK:2331) has added 1.9%.
- On the other hand, food company, WH Group (HK:0288) has shed 1.1%.
- In South Korea, electronics company, Daidong Electronics (KS:008110) has declined 3.5%.
- On the contrary, cosmetics company, Hankook Cosmetics (KS:003350) Company has jumped 5.9%.
- The Nikkei 225 index is trading 0.2% higher at 38,119.96.
- The Hang Seng index has advanced 0.9% to trade at 18,398.95, while the Kospi index is trading 0.5% higher at 2,649.16.
COMMODITIES
- At 05:30 SAST today, Brent prices fell 0.4% to trade at $81.55/bl.
- Yesterday, Brent prices fell 2.1% to settle at $81.86/bl, amid weak fuel demand in the US and a surprise jump in gasoline and distillate fuel stockpiles.
- At 05:30 SAST today, gold prices declined 0.1% to trade at $2,339.81/oz. Yesterday, gold gained 0.2% to close at $2,343.00/oz.
- Yesterday, copper declined 2.7% to close at $10,016.50/mt. Aluminium closed marginally lower at $2,767.50/mt.
CURRENCIES
- Yesterday, the South African rand weakened against the US dollar. In South Africa, the producer price index (PPI) rose more than expected in April, amid increase in fuel and food prices. In the US, economy grew at a slower pace in the 1Q24 than previously expected, reflecting softer consumer spending on goods. The number of initial jobless claims rose more than expected in the week ended 24 May 2024.
- The yield on benchmark government bonds were mixed yesterday. The yield on the 2030 bond remained unchanged at 10.51%, while that for the longer-dated 2040 issue fell to 12.63%.
- At 05:30 SAST, the US dollar is trading marginally higher against the South African rand at R18.7577, while the euro is trading 0.1% lower at R20.2994. At 05:30 SAST, the British pound has declined 0.1% against the South African rand to trade at R23.8589.
- Yesterday, the euro mostly advanced against most of the major currencies. In the eurozone, economic confidence improved in May, as the economy recovered from a recession. Moreover, the unemployment rate slightly dropped in April.
- At 05:30 SAST, the euro slipped 0.1% against the US dollar to trade at $1.0818, while it has marginally weakened against the British pound to trade at GBP0.8506.
ECONOMIC UPDATES
- South African Reserve Bank (SARB) kept its interest rate unchanged at 8.25%, in line with market expectations.
- In South Africa, the producer price index (PPI) climbed 0.5% on a MoM basis in April. The PPI had climbed 1.1% in the previous month.
- In South Africa, the PPI registered a rise of 5.1% on a YoY basis, in April. In the prior month, the PPI had recorded a rise of 4.6%.
- In Switzerland, seasonally adjusted gross domestic product (GDP) rose 0.5% on a QoQ basis in 1Q24, more than market expectations for an advance of 0.3%. In the previous quarter, GDP had recorded a rise of 0.3%.
- In Spain, the preliminary consumer price index registered a rise of 0.3% on a MoM basis in May, in line with market expectations and compared to a rise of 0.7% recorded in the prior month.
- In the eurozone, the final consumer confidence index improved to a level of -14.30 in May, in line with market expectations and compared to a level of -14.30 recorded in the previous month.
- In the eurozone, the economic sentiment indicator advanced to a level of 96.00 in May, compared to a level of 95.60 in the previous month. Market expectations were for the economic sentiment indicator to advance to a level of 96.20.
- In the eurozone, business climate index improved to a level of -0.39 in May, compared to a revised -0.51 recorded in the previous month.
- In the US, the annualized GDP registered a rise of 1.3% on a QoQ basis in 1Q24, in line with market expectations and compared to a rise of 3.4% recorded in the previous quarter.
- In the US, seasonally adjusted initial jobless claims advanced to a level of 219.00K in week ended 25 May 2024, more than market expectations of a rise to a level of 218.00K. In the prior week, initial jobless claims had registered a revised reading of 216.00K.
- In the US, pending home sales in registered a drop of 7.7% on a MoM basis in April, more than market expectations for a drop of 0.6%. In the prior month, pending home sales had climbed by a revised 3.6%.
- In Japan, the unemployment rate remained unchanged at a level of 2.6% in April, in line with market expectations and compared to a similar reading in the prior month.
- In Japan, the Tokyo consumer price index (CPI) rose 2.2% on a YoY basis in May. The Tokyo CPI had registered a rise of 1.8% in the previous month.
- In Japan, the preliminary industrial production registered a drop of 1.0% on a YoY basis in April. In the prior month, industrial production had fallen 6.2%.
- In China, the NBS manufacturing PMI unexpectedly eased to a level of 49.50 in May, compared to a level of 50.40 recorded in the prior month.
CORPORATE UPDATES
SOUTH AFRICA
- Woolworths Holdings Limited (JO:WHLJ): The retail company, in its FY24 trading update, revealed that it expects EPS and HEPS to drop more than 20% as compared with the previous year, in part as a result of the inclusion of the David Jones business, as well as the profit on disposal, in the Group’s 2023 results. The company intends to release its results for the year on or about 4 September 2024.
- Old Mutual Limited (JO:OMUJ): The insurance company, in its trading update for the quarter ended 31 March 2024, revealed that Life APE sales recorded robust growth of 10.0% from the prior period. Sales in the current period benefitted from strong risk sales across all channels in Mass and Foundation Cluster. Gross flows increased by 4.0% from the prior period, driven by higher inflows in the offshore business in Wealth Management and strong inflows in Old Mutual Africa Regions following the acquisition of a large new mandate in Malawi as well as higher unit trust sales in East Africa. Gross written premiums grew by 7% from the prior period, driven by strong new business growth in Retail and Specialty businesses in Old Mutual Insure.
- Emira Property Fund Limited (JO:EMIJ): The real estate investment trust company, in its FY24 results, reported that revenue advanced 46.1% from the preceding year to R1.89bn. Its diluted EPS stood at 105.70c, compared with 168.71c recorded in the previous year.