Market Review, Commodities, Currencies, Economic & Corporate Update - 31.08.23

  • Market Overview

South Africa Market Review

  • South African markets closed in the green yesterday, led by gains in mining and banking sector stocks.
  • Gold miners, Gold Fields (JO: GFIJ ) and AngloGold Ashanti (JO: ANGJ ) advanced 4.1% and 3.4%, respectively.
  • Lenders, RMB Holdings (JO: RMHJ ), Nedbank Group (JO: NEDJ ) and Standard Bank Group (JO: SBKJ ) gained 2.1%, 1.0% and 0.8%, respectively.
  • Retailers, SPAR Group (JO: SPPJ ), Cie Financiere Richemont S.A. (JO: CFRJ ) and Shoprite Holdings (JO: SHPJ ) rose 1.5%, 1.2% and 1.0%, respectively.
  • On the flipside, pharmaceutical company, Aspen Pharmacare (JO: APNJ ) shed 7.9%, after the company reported a 4% drop in annual profit.
  • Meanwhile, the company announced that it has signed a $41.50mn (R773.90mn) deal with Eli Lilly (NYSE: LLY ) to market and distribute a portfolio of its products in Sub-Saharan Africa.
  • The JSE All Share index advanced 0.6% to close at 75,256.19.

UK Market Review

  • The UK market finished firmer for a sixth consecutive session yesterday, boosted by gains in property sector stocks.
  • Real estate companies, Persimmon (LON: PSN ), Taylor Wimpey (LON: TW ), Barratt Developments (LON: BDEV ) and Berkeley Group Holdings (LON: BKGH ) advanced 2.3%, 2.0%, 1.5% and 1.4%, respectively.
  • Insurance company, Prudential (LON: PRU ) gained 1.5%, after the company reported a surge in its interim operating profit.
  • Paper and packaging companies, DS Smith (LON: SMDS ), Smurfit Kappa Group (LON: SKG ) and Mondi (LON: MNDI ) rose 1.2%, 0.9% and 0.7%, respectively.
  • On the other hand, retail companies, Kingfisher (LON: KGF ) and JD Sports Fashion (LON: JD ) eased 2.4% and 1.2%, respectively.
  • The FTSE 100 index advanced 0.1% to close at 7,473.67.

US Market Review

  • US markets ended higher yesterday, as investors assessed domestic economic data.
  • Technology companies, Apple (NASDAQ: AAPL ), Salesforce (NYSE: CRM ) and Intel (NASDAQ: INTC ) advanced 1.9%, 1.5% and 0.6%, respectively.
  • On the contrary, HP (NYSE: HPQ ) dropped 6.6%, after the company reported lower revenue and slashed its annual forecast amid slowing demand.
  • Drinks company, Brown-Forman (NYSE: BFb ) fell 4.5%, after the company reported less than expected sales and profit in 1Q24.
  • The S&P 500 index rose 0.4% to settle at 4,514.87, while the DJIA index advanced 0.1% to close at 34,890.24.
  • The NASDAQ index climbed 0.5% to end the trading session at 14,019.31.

Asia Market Review

  • Asian markets are trading mostly lower this morning, after China’s manufacturing PMI contracted for a fifth consecutive month in August.
  • In Japan, automobile company, Suzuki Motor Corporation (TYO: 7269 ) has advanced 2.4%.
  • On the flipside, pharmaceutical company, Sumitomo Pharma (TYO: 4506 ) has declined 3.7%.
  • In Hong Kong, consumer electronics company, Lenovo Group (HK: 0992 ) has gained 2.1%.
  • On the other hand, real estate company, Longfor Group Holdings (HK: 0960 ) had shed 3.5%.
  • In South Korea, biopharmaceutical company, GeneOne Life Science (KS: 011000 ) has dropped 4.7%.
  • On the contrary, construction company, Ilsung Construction has surged 13.3%.
  • The Nikkei 225 index is trading 0.6% higher at 32,517.23.
  • The Hang Seng index has declined 0.2% to trade at 18,442.83, while the Kospi index is trading 0.4% declined at 2,550.46.

Commodities

  • At 05:30 SAST today, Brent prices fell 0.1% to trade at $85.74/bl.
  • Yesterday, Brent prices rose 0.4% to settle at $85.86/bl, amid supply constraints. Additionally, the US Energy Information Administration (EIA) reported that the US crude inventories fell by 10.58mn bls in the week ended 25 August 2023.
  • At 05:30 SAST today, gold prices advanced 0.2% to trade at $1,945.55/oz. Yesterday, gold gained 0.3% to close at $1,942.24/oz, as a weaker dollar boosted demand for the safe haven yellow metal.
  • Yesterday, copper rose 0.9% to close at $8,445.40/mt. Aluminium closed 1.7% higher at $2,204.78/mt.

Currencies

  • Yesterday, the South African rand weakened against the US dollar. In the US, gross domestic product (GDP) rose less than expected in 2Q23. Moreover, the ADP employment increased less than expected in August. Meanwhile, pending home sales increased at its fastest pace since January in July.
  • The yield on benchmark government bonds rose yesterday. The yield on 2030 bond rose to 10.20%. Further, the yield on the longer-dated 2040 issue rose to 12.34%.
  • At 05:30 SAST, the US dollar is trading 0.2% higher against the South African rand at R18.7098, while the euro is trading 0.1% higher at R20.4355. At 05:30 SAST, the British pound has gained 0.2% against the South African rand to trade at R23.8052.
  • Yesterday, the euro mostly advanced against most of the major currencies. In Germany, consumer price inflation declined to a 17-month low in August. In the eurozone, the economic sentiment index reached its lowest level since late 2020 in August.
  • At 05:30 SAST, the euro marginally slipped against the US dollar to trade at $1.0924, while it has marginally weakened against the British pound to trade at GBP0.8586.

Economic Updates

  • In Switzerland, the KOF leading indicator dropped to a level of 91.10 in August, more than market expectations and compared to a revised level of 92.10 recorded in the prior month.
  • In Switzerland, the ZEW economic expectations index unexpectedly dropped to a level of -38.60 in August, compared to a level of -32.60 recorded in the previous month.
  • In Italy, the consumer confidence index dropped to a level of 106.50 in August, compared to a level of 106.70 recorded in the prior month. Markets were anticipating the consumer confidence to drop to a level of 105.60.
  • In Germany, the CPI rose 0.3% on a MoM basis in August, in line with market expectations.
  • In the eurozone, the consumer confidence index dropped to a level of -16.00 in August, compared to a level of -15.10 recorded in the previous month.
  • In the eurozone, the economic sentiment indicator dropped to a level of 93.30 in August, more than market expectations and compared to a level of 94.50 in the prior month.
  • In the eurozone, the services sentiment indicator eased to a level of 3.90 in August, more than market expectations. In the previous month, the services sentiment indicator had recorded a revised level of 5.40.
  • In the US, the MBA mortgage applications rose 2.3% in the week ended 25 August 2023, compared to a drop of 4.2% recorded in the prior week.
  • In the US, the ADP employment rose by 177.0K in August, compared to a revised level of 371.00K jobs in the prior month.
  • In the US, trade deficit widened to $91.20bn in July, compared to a deficit of $88.20bn recorded in the previous month.
  • In the US, annualised gross domestic product (GDP) rose 2.1% in 2Q23, less than market expectations for a rise of 2.4%. GDP had advanced 2.0% in the previous quarter.
  • In the US, pending home sales unexpectedly rose 0.9% on a MoM basis in July, compared to a revised rise of 0.4% recorded in the previous month.
  • In Japan, industrial production dropped 2.5% on a YoY basis in July, compared to a flat reading in the previous month.
  • In China, the NBS manufacturing PMI rose to a level of 49.70 in August, more than market expectations and compared to a level of 49.30 in the prior month.

Corporate Updates

South Africa

  • Anglo American Plc (JO: AMSJ ): The mining company announced that the value of rough diamond sales (Global Sightholder Sales and Auctions) for De Beers’ seventh sales cycle of 2023, amounted $370.00mn.
  • Aspen Pharmacare Limited (JO: APNJ ): The pharmaceutical company, in its FY23 results, announced that its revenue increased to R40.71bn, compared with R38.61bn posted in the previous year. Its diluted EPS fell 17.8% from the prior year to R11.77.
  • Woolworths Holdings Limited (JO: WHLJ ): The retail company, in its annual results for the period ended 25 June 2023, indicated that revenue rose to R72.69bn from R65.74bn posted in the previous year. Its diluted EPS increased 42.1% from the prior year to 542.00c.
  • Murray & Roberts Holdings Limited (JO: MURJ ): The mining company, in its FY23 results, reported that its revenue from continuing operations advanced 42.3% from the preceding year to R12.46bn. Its diluted loss per share stood at 789.00c, compared with an EPS of 33.00c recorded in the previous year.
  • Harmony Gold Mining Company Limited (JO: HARJ ): The company, in its annual results for the year ended 30 June 2023, stated that its revenue increased to R49.28bn from R42.65bn posted in the previous year. Its diluted EPS stood at 777.00c, compared with a loss per share of 172.00c recorded in the previous year.
  • KAP Limited (JO: KAPJ ): The chemical and logistics company, in its FY23 results, reported that its revenue advanced 5.9% from the preceding year to R29.63bn. Its diluted EPS stood at 16.40c, compared with 68.50c recorded in the previous year.
  • Cashbuild Limited (JO: CSBJ ): The retail company, in its annual results for the period ended June 2023, indicated that its revenue decreased to R10.65bn, compared with R11.15bn posted in the previous year. Its diluted EPS fell 78.2% from the prior year to 455.60c.
  • Blue Label Telecoms Limited (JO: BLUJ ): The telecommunications company, in its FY23 results, revealed that its revenue rose 6.9% from the preceding year to R18.60bn. Its diluted EPS stood at 30.07c, compared with 114.14c recorded in the previous year.
  • Hurricane in Gulf of Mexico blows oil prices higher: Oil prices extended gains after industry data showed a large draw in crude inventories in the US, the world’s biggest fuel consumer, and as a hurricane in the Gulf of Mexico kept investors on edge.

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