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Market Review, Commodities, Currencies, Economic & Corporate Update - 31.07.23

Published 2023/07/31, 08:52
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South Africa Market Review

  • South African markets closed in the green on Friday, as investors assessed softer US inflation data.
  • Property developers, Accelerate Property Fund (JO:APFJ), Delta Property Fund (JO:DLTJ) and Dipula Income Fund (JO:DIBJ) jumped 7.5%, 5.9% and 0.6%, respectively.
  • Platinum miners, Northam Platinum (JO:NHMJ), Impala Platinum Holdings (JO:IMPJ) and Anglo American Platinum (JO:AMSJ) climbed 3.1%, 1.3% and 1.1%, respectively.
  • Retailers, Pick n Pay Stores (JO:PIKJ), Clicks Group (JO:CLSJ) and Shoprite Holdings (JO:SHPJ) advanced 1.9%, 1.3% and 1.0%, respectively.
  • On the flipside, financial services companies, Transaction Capital (JO:TCPJ) and Coronation Fund Managers (JO:CMLJ) edged down 8.1% and 1.0%, respectively.
  • Diversified miners, Anglo American (JO:AGLJ), African Rainbow Minerals (JO:ARIJ) and Merafe Resources (JO:MRFJ) shed 3.1%, 1.2% and 0.8%, respectively.
  • The JSE All Share index advanced 0.3% to close at 78,506.90.

UK Market Review

  • The UK market finished firmer on Friday, amid robust corporate results.
  • Airlines company, International Consolidated Airlines Group S.A. (LON:ICAG) climbed 6.6%, after the company reported better than expected results in 2Q23.
  • Standard Chartered (LON:STAN) gained 4.0%, after the banking firm reported a surge in its interim profits supported by rising interest rates and announced a share buyback of $1.00bn.
  • Pharmaceutical company, AstraZeneca (LON:AZN) advanced 3.4%, after the company reported higher profits in 2Q23.
  • Bank, NatWest (LON:NWG) added 2.3%, following a surge in its interim profits.
  • On the contrary, miners, Anglo American (LON:AAL), Rio Tinto (LON:RIO) and Fresnillo (LON:FRES) eased 1.8%, 1.7% and 1.3%, respectively.
  • Oil companies, Shell (LON:RDSa) and BP (LON:BP) fell 1.0% and 0.9%, respectively.
  • The FTSE 100 index marginally advanced to close at 7,694.27.

US Market Review

  • US markets ended higher on Friday, boosted by signs of easing inflationary pressures and following upbeat corporate results.
  • Intel Corporation (NASDAQ:INTC) jumped 6.6%, after the company reported upbeat quarterly results buoyed by higher PC and data-center sales.
  • Consumer goods company, Procter & Gamble (NYSE:PG) advanced 2.8%, after the company reported better than expected sales in 2Q23.
  • On the other hand, automaker, Ford Motor (NYSE:F) shed 3.4%, after the company’s Chief Executive Jim Farley outlined a change in its product strategy.
  • Exxon Mobil Corporation (NYSE:XOM) eased 1.2%, after the oil company reported a drop in its quarterly profits.
  • The S&P 500 index rose 1.0% to settle at 4,582.23, while the DJIA index advanced 0.5% to close at 35,459.29.
  • The NASDAQ index climbed 1.9% to end the trading session at 14,316.66.

Asia Market Review

  • Asian markets are trading higher this morning, tracking gains in the US peers.
  • In Japan, adhesive manufacturing company, Nitto Denko Corporation (TYO:6988) has advanced 3.8%.
  • On the flipside, factory automation equipment company, Keyence Corporation (TYO:6861) has declined 3.7%.
  • In Hong Kong, technology company, Lenovo Group (HK:0992) has gained 5.2%.
  • On the contrary, pharmaceutical company, Hansoh Pharmaceutical Group (HK:3692) has eased 2.4%.
  • In South Korea, chemical company, Cosmo Chemical (KS:005420) has advanced 4.4%.
  • On the other hand, Hanmi Pharmaceutical Company (KS:128940) has shed 3.5%.
  • The Nikkei 225 index is trading 1.5% higher at 33,262.74.
  • The Hang Seng index has advanced 1.3% to trade at 20,170.89, while the Kospi index is trading 0.8% higher at 2,629.71.

Commodities

  • At 05:30 SAST today, Brent prices fell 0.5% to trade at $84.54/bl.
  • On Friday, Brent prices rose 0.9% to settle at $84.99/bl, amid optimism surrounding higher demand and supply constraints. Additionally, Baker Hughes reported that the US oil rigs dropped by 1 to 529 in the week ended 28 July 2023.
  • At 05:30 SAST today, gold prices declined 0.1% to trade at $1,957.12/oz. On Friday, gold gained 0.7% to close at $1,959.20/oz, as a weaker greenback boosted demand for the safe haven yellow metal.
  • On Friday, copper rose 0.2% to close at $8,591.50/mt. Aluminium closed 0.3% higher at $2,211.92/mt.

Currencies

  • On Friday, the South African rand strengthened against the US dollar. In the US, the Michigan consumer sentiment index rose less than expected in July.
  • The yield on benchmark government bonds fell on Friday. The yield on 2026 bond fell to 8.89%. Further, the yield on the longer-dated 2030 issue declined to 10.19%.
  • At 05:30 SAST, the US dollar is trading 0.1% lower against the South African rand at R17.6162, while the euro is trading marginally higher at R19.4085. At 05:30 SAST, the British pound has marginally gained against the South African rand to trade at R22.6513.
  • On Friday, the euro declined against most of the major currencies. In Germany, gross domestic product recorded a flat reading in 2Q23, amid weak purchasing power, higher interest rates and low factory orders. In the eurozone, the economic confidence index deteriorated in July.
  • At 05:30 SAST, the euro marginally slipped against the US dollar to trade at $1.1016, while it has weakened 0.1% against the British pound to trade at GBP0.857.

Economic Updates

  • In France, the preliminary gross domestic product (GDP) rose 0.50% on a QoQ basis in 2Q23, more than market expectations and compared to a rise of 0.2% recorded in the prior quarter.
  • In France, the EU normalised consumer price index (CPI) recorded a flat reading on a MoM basis in July, less than market expectations for a rise of 0.1%. The CPI had registered a rise of 0.2% in the prior month.
  • In Germany, the GDP recorded a flat reading on a QoQ basis in 2Q23, compared to market expectations for a rise of 0.1%. GDP had declined 0.3% in the prior quarter.
  • In Germany, the CPI rose 0.3% on a MoM basis in July, in line with market expectations.
  • In the eurozone, the economic sentiment index dropped to a level of 94.50 in July, more than market expectations for a drop to a level of 95.00. The economic sentiment index had recorded a level of 95.30 in the prior month.
  • In the eurozone, the consumer confidence index rose to a level of -15.10 in July, in line with market expectations and compared to a level of -16.10 recorded in the prior month.
  • In the eurozone, the business climate index dropped to a level of -0.09 in July, compared to a level of 0.06 recorded in the previous month.
  • In the US, the Michigan consumer sentiment index climbed to a level of 71.60 in July, less than market expectations and compared to a level of 64.40 recorded in the prior month.
  • In Canada, the GDP rose 0.3% on a MoM basis in May, in line with market expectations. GDP had recorded a revised rise of 0.1% in the previous month.
  • In Japan, industrial production eased 0.4% on a YoY basis in June, compared to a rise of 4.2% recorded in the prior month.
  • In China, the NBS manufacturing PMI rose to a level of 49.30 in July, more than market expectations for a rise to a level of 49.20. The NBS manufacturing PMI had recorded a level of 49.00 in the previous month.

Corporate Updates

South Africa

  • Woolworths Holdings Limited (JO:WHLJ): The retail company, in its annual trading update for 52 weeks ended 25 June 2023, stated that turnover and concession sales from continuing operations (excluding David Jones) increased by 10.8% for the year and by 9.3% in comparable stores. On a total basis, group turnover and concession sales increased by 6.9% and by 4.4% in constant currency terms as compared with the previous year. Moreover, EPS is expected to be between 401.70c and 438.20c, compared with 365.20c reported in the prior year. Whereas HEPS is expected to be between 405.60c and 442.40c, compared with 368.70 reported in the prior year. The company expects to release its FY23 results on or about the 30 August 2023.
  • Delta Property Fund Limited (JO:DLTJ): The real estate investment trust company announced the cancellation of the agreement relating to the Capital Towers Disposal and therefore the Capital Towers disposal will no longer be proceeding. Moreover, the company also announced the termination of the agreement in respect of the DMFT Property Developers Proprietary Limited (DMFT) four property disposals due to DMFT seeking to significantly alter the salient parameters of the transaction (including but not limited to reducing the purchase price) in a manner which was unacceptable to Delta. Accordingly, the DMFT Four Property Disposals will no longer be proceeding.
  • Omnia (JO:OMNJ) ramps up buying of rail wagons as infrastructure crumbles: Fertiliser and explosives group Omnia has flagged SA’s crumbling infrastructure as the No 2 risk to its business, higher than the misfiring economy, climate change and cyber security.

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