SOUTH AFRICA MARKET REVIEW
- South African markets closed in the green yesterday, as investors await the US Federal Reserve’s policy meeting outcomes.
- Telecommunications companies, Telkom SA SOC (JO:TKGJ) and Vodacom Group (JO:VODJ) advanced 2.6% and 1.5%, respectively.
- Pharmaceutical companies, Netcare (JO:NTCJ), Life Healthcare Group (JO:LHCJ) and Aspen Pharmacare (JO:APNJ) gained 2.1%, 1.8% and 1.0%, respectively.
- Insurance companies, Old Mutual (JO:OMUJ), Discovery Holdings (JO:DSYJ) and Sanlam (JO:SLMJ) rose 2.1%, 1.4% and 1.0%, respectively.
- Lenders, FirstRand (JO:FSRJ), Nedbank Group (JO:NEDJ), Standard Bank Group (JO:SBKJ) and Absa Group (JO:ABGJ) increased 1.3%, 1.2%, 0.9% and 0.5%, respectively.
- Retailers, Shoprite Holdings (JO:SHPJ) and Clicks Group (JO:CLSJ) added 1.2% and 0.9%, respectively.
- The JSE All Share index advanced 0.2% to close at 81,198.64.
UK MARKET REVIEW
- The UK market finished weaker yesterday, weighed down by losses in beverages and mining sector stocks.
- Alcoholic beverages company, Diageo (LON:DGE) dropped 5.1%, after the company reported more than expected drop in its organic operating profit in FY24.
- Miners, Glencore (LON:GLEN) and Rio Tinto (LON:RIO) declined 2.5% and 1.1%, respectively, as a slowdown in global growth momentum and risk-off sentiment pushed base metals prices lower.
- On the other hand, banking firms, Standard Chartered (LON:STAN) and HSBC Holdings (LON:HSBA) advanced 5.9% and 1.0%, respectively.
- Insurance companies, Admiral Group (LON:ADML) and Aviva (LON:AV) gained 2.5% and 1.1%, respectively.
- The FTSE 100 index declined 0.2% to close at 8,274.41.
US MARKET REVIEW
- US markets ended mostly lower yesterday, weighed down by losses in semiconductor chip sector stocks.
- Semiconductor chip companies, Nvidia Corporation (NASDAQ:NVDA) and ON Semiconductor Corporation (NASDAQ:ON) dropped 7.0% and 5.5%, respectively.
- Consumer goods company, Procter & Gamble (NYSE:PG) shed 4.8%, after the company reported less than expected sales in 4Q24.
- Technology companies, Intel Corporation (NASDAQ:INTC) and Microsoft Corporation (NASDAQ:MSFT) declined 2.3% and 0.9%, respectively.
- On the contrary, financial services companies, Goldman Sachs Group (NYSE:GS), JPMorgan Chase & Co. (NYSE:JPM) and American Express (NYSE:AXP) advanced 2.6%, 2.1% and 1.9%, respectively.
- The S&P 500 index fell 0.5% to settle at 5,436.44, while the DJIA index advanced 0.5% to close at 40,743.33.
- The NASDAQ index eased 1.3% to end the trading session at 17,147.42.
ASIA MARKET REVIEW
- Asian markets are trading mostly higher this morning.
- In Japan, banking company, SoftBank Group (TYO:9984) has shed 4.0%.
- On the flipside, financial services company, Sumitomo Mitsui Financial Group (TYO:8316) has gained 3.1%.
- In Hong Kong, pharmaceutical company, Hansoh Pharmaceutical (HK:3692) has advanced 4.0%.
- On the other hand, power plants company, China Resources Power Holdings (HK:0836) has declined 2.1%.
- In South Korea, confectionary company, Crown Confectionery (KS:264900) has surged 9.7%.
- On the contrary, handbags company, JS Corporation (KS:194370) has dropped 6.2%.
- The Nikkei 225 index is trading 0.4% lower at 38,369.54.
- The Hang Seng index has gained 1.5% to trade at 17,250.09, while the Kospi index is trading 0.5% higher at 2,752.83.
COMMODITIES
- At 05:30 SAST today, Brent prices rose 1.1% to trade at $79.5/bl.
- Yesterday, Brent prices fell 1.4% to settle at $78.63/bl, as concerns about weakening Chinese demand and the OPEC+ plans to boost supplies weighed on the market. Additionally, the American Petroleum Institute (API) reported that crude oil inventories declined by 4.50mn bls in the week ended 26 July 2024.
- At 05:30 SAST today, gold prices advanced 0.3% to trade at $2,416.27/oz. Yesterday, gold gained 1.1% to close at $2,408.43/oz.
- Yesterday, copper declined 1.1% to close at $8,808.50/mt. Aluminium closed 1.2% lower at $2,224.50/mt.
CURRENCIES
- Yesterday, the South African rand strengthened against the US dollar. In the US, the JOLTs job openings eased in June. Meanwhile, the housing price index unexpectedly remained flat in May.
- The yield on benchmark government bonds rose yesterday. The yield on the 2030 bond advanced to 9.46%, while that for the longer-dated 2040 issue rose to 11.60%.
- At 05:30 SAST, the US dollar is trading 0.2% lower against the South African rand at R18.3023, while the euro is trading marginally lower at R19.8151. At 05:30 SAST, the British pound has slightly declined against the South African rand to trade at R23.5163.
- Yesterday, the euro mostly declined against most of the major currencies. In Germany, the consumer price index (CPI) rose more than expected in July. Meanwhile, gross domestic product (GDP) unexpectedly contracted in 2Q24. In the eurozone, GDP rose more than expected in 2Q24. Moreover, the economic sentiment indicator dropped slightly in July.
- At 05:30 SAST, the euro advanced 0.1% against the US dollar to trade at $1.0826, while it has marginally gained against the British pound to trade at GBP0.8429.
ECONOMIC UPDATES
- In Spain, the consumer price index (CPI) dropped 0.5% on a MoM basis in July, compared to a rise of 0.4% recorded in the previous month.
- In Italy, gross domestic product (GDP) rose 0.2% on a QoQ basis in 2Q24, in line with market expectations. GDP had recorded a rise of 0.3% in the previous quarter.
- In France, gross domestic product (GDP) advanced 0.3% on a QoQ basis in 2Q24, more than market expectations for a rise of 0.2%.
- In Germany, GDP unexpectedly fell 0.1% on a QoQ basis in 2Q24, compared to a rise of 0.2% recorded in the previous quarter.
- In Germany, the CPI rose 0.3% on a MoM basis in July, more than market expectations for a rise of 0.2%. The CPI had recorded a rise of 0.1% in the prior month.
- In the eurozone, the consumer confidence index rose to a level of -13.00 in July, in line with market expectations. The consumer confidence index had recorded a level of -14.00 in the prior month.
- In the eurozone, seasonally adjusted GDP rose 0.3% on a QoQ basis in 2Q24, more than market expectations for a rise of 0.2%. GDP had recorded a rise of 0.3% in the previous quarter.
- In the eurozone, the economic sentiment indicator dropped to a level of 95.80 in July, less than market expectations for a drop to a level of 95.40. The economic sentiment indicator had recorded a level of 95.90 in the prior month.
- In the US, the housing price index unexpectedly recorded a flat reading on a MoM basis in May, compared to a revised rise of 0.3% in the previous month.
- In the US, the JOLTs job openings eased to a level of 8.18mn in June, compared to an upwardly revised 8.23mn jobs recorded in the prior month.
- In the US, the CB consumer confidence index rose more than expected to a level of 100.30 in July, compared to a level of 97.80 recorded in the prior month.
- In Japan, industrial production dropped 7.3% on a YoY basis in June, compared to a rise of 1.1% recorded in the prior month.
- In China, the NBS manufacturing PMI fell to a level of 49.40 in July, less than market expectations for a drop to a level of 49.30. The NBS manufacturing PMI had recorded a level of 49.50 in the previous month.
- In Australia, the CPI remained unchanged at 1.0% on a QoQ basis in 2Q24, in line with market expectations.
- In Australia, retail sales rose 0.5% on a MoM basis in June, more than market expectations for a rise of 0.2%. Retail sales had advanced 0.6% in the prior month.
CORPORATE UPDATES
SOUTH AFRICA
- BHP Group Limited (JO:BHPJ): The mining company announced that it along with Lundin Mining Corporation have agreed to jointly acquire 100% of Filo Corporation, through a Canadian plan of arrangement. Filo Corporation owns 100% of the Filo del Sol (FDS) copper project. BHP and Lundin Mining have also agreed to form a 50/50 joint venture to hold the FDS and Josemaria projects located in the Vicuña district of Argentina and Chile. The JV will create a long-term partnership between BHP and Lundin Mining to jointly develop an emerging copper district with world-class potential. The company’s total cash payment for the proposed transaction is expected to be approximately $2.10bn.
- Glencore Plc (JO:GLNJ): The mining company, in its 1H24 production update, revealed that own sourced cobalt production plunged 27.0% to 15.90kt, reflecting planned lower run-rates at Mutanda in response to the current weak cobalt pricing environment and lower throughput and cobalt grades at KCC. Moreover, attributable ferrochrome production declined 16.0% to 599.00kt, as the Rustenburg smelter remains idled in response to weak market conditions and pending an improved price/cost environment. Also, steelmaking coal production dropped 8.0% to 3.40mt. Moreover, copper production fell 5.0% to 462.60kt. Own sourced nickel production declined 5.0% to 44.20kt. Energy coal production decreased 7.0% to 47.00mt.
- Shoprite Holdings Limited (JO:SHPJ): The retail company, in its FY24 operational update, revealed that total group sales from continuing operations increased 10.2% as compared with the previous year. The group’s core business, Supermarkets RSA, achieved sales growth of 12.3%, contributing 81.0% to group sales. Like-for-like sales increased 6.3%. Moreover, Supermarkets RSA opened a net 201 stores during the year to total 2,322 stores. Of these net new openings, 20 were Shoprite, 22 Usave, 25 Checkers and 71 LiquorShop stores. Additionally, the company intends to release its year-end results on 3 September 2024.
- Momentum (JO:MTMJ) sees strong demand for health insurance: SA is seeing strong growth in demand for cheap primary health insurance products, in stark contrast to the stagnant medical schemes market, Momentum Health Solutions Chief Marketing Officer Damian McHugh said.