Market Review, Corporate Updates, Commodities & Currencies - 03.08.21

  • Market Overview
  • Editor's Pick

SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the red yesterday, pulled down by losses in mining sector stocks and amid increasing cases of coronavirus infections.
  • Gold mining companies, AngloGold Ashanti (JO: ANGJ ), Sibanye-Stillwater and Gold Fields (JO: GFIJ ) declined 1.7%, 1.2% and 0.9%, respectively.
  • Platinum mining stocks, Anglo American (JO: AMSJ ) Platinum, Northam (JO: NHMJ ) Platinum and Impala Platinum (JO: IMPJ ) Holdings shed 1.3%, 1.1% and 1.0%, respectively.
  • Real estate sector stocks, Arrowhead Properties plunged 6.5%.
  • Banking stocks, RMB Holdings (JO: RMHJ ), Nedbank Group (JO: NEDJ ) and Absa Group (JO: ABGJ ) dropped 1.4%, 0.7% and 0.5%, respectively.
  • On the flipside, retail sector stocks, Massmart Holdings (JO: MSMJ ), Cashbuild (JO: CSBJ ) and Lewis Group (JO: LEWJ ) rose 2.6%, 0.8% and 0.7%, respectively.
  • The JSE All Share index declined 0.2% to close at 68,822.75.

UK MARKET REVIEW

  • The UK market finished firmer yesterday, buoyed by broad-based gains in mining sector stocks.
  • Anglo American, Antofagasta (LON: ANTO ) and BHP Group (JO: BHPJ ) advanced 3.4%, 1.7% and 1.1%, respectively.
  • SSE (LON: SSE ) rose 1.3%, after the company agreed to sell its stake in Scotia Gas Networks for a cash consideration of GBP1.23bn.
  • Travel company, International Consolidated Airlines Group (LON: ICAG ) SA advanced 3.2%.
  • Banking sector stocks, Lloyds Banking Group (LON: LLOY ), NatWest Group (LON: NWG ) and Barclays (LON: BARC ) added 1.3%, 1.0% and 0.8%, respectively.
  • On the flipside, HSBC Holdings (LON: HSBA ) dipped 0.3%, despite reinstatement of dividends following an upbeat 1H21 profit.
  • The FTSE 100 index advanced 0.7% to close at 7,081.72.

US MARKET REVIEW

  • US markets ended mostly lower yesterday, amid concerns over the Delta variant of coronavirus and amid a less than expected rise in the domestic factory data output.
  • Investment banking companies, JPMorgan Chase (NYSE: JPM ) and Wells Fargo (NYSE: WFC ) shed 0.4% and 0.3%, respectively.
  • On the flipside, ON Semiconductor soared 11.7%, after the company reported upbeat 1H21 sales and profit.
  • News advanced 0.6%, following an agreement to takeover Oil Price Information Service from S&P Global and IHS Markit for a cash consideration of $1.15bn.
  • The S&P 500 index fell 0.2% to settle at 4,387.16, while the DJIA index declined 0.3% to close at 34,838.16.
  • The NASDAQ index climbed 0.1% to end the trading session at 14,681.07.

ASIA MARKET REVIEW

  • Asian markets are trading lower this morning, tracking overnight losses on Wall Street.
  • In Japan, Asahi Group Holdings has shed 3.4%. On the contrary, vehicle manufacturing company, Hino Motors (T: 7205 ) has gained 2.9%.
  • In Hong Kong, technology companies, NetEase (NASDAQ: NTES ) and Tencent Holdings (HK: 0700 ) have dropped 10.8% and 9.8%, respectively.
  • Online services company, Meituan has plummeted 6.0%.
  • On the contrary, pharmaceuticals company, Sino Biopharmaceutical Ltd (HK: 1177 ) has added 2.2%.
  • In South Korea, electronics company, LG Electronics (KS: 066570 ) has shed 0.6%, while peer, Samsung Electronics (KS: 005930 ) has added 1.8%.
  • The Nikkei 225 index is trading 0.7% lower at 27,577.17.
  • The Hang Seng index is trading 0.7% weaker at 26,041.45, while the Kospi index is trading 0.1% lower at 3,220.48.

COMMODITIES

  • At 06:00 SAST today, Brent spot prices fell 0.5% to trade at $72.99/bl, amid concerns over the surge in the Delta variant of COVID-19 and a slow-down in factory activities in China and the US.
  • Yesterday, Brent spot prices fell 2.7% to settle at $73.37/bl, amid a slower pace of growth in China’s factory activities, following a decline in demand. Meanwhile, Iran will respond promptly to any threat against its security, after the US, the UK and Israel blamed Tehran for an attack on an Israeli-managed tanker off the coast of Oman.
  • Yesterday, the Illinois North Central No.2 Yellow corn spot prices marginally rose to $6.16/bushel.
  • At 06:00 SAST today, gold prices declined 0.1% to trade at $1,810.77/oz. Yesterday, gold marginally declined to close at $1,813.47/oz, amid cautious investor sentiment ahead of US jobs data releases.
  • Yesterday, copper declined 0.3% to close at $9,674.70/mt. Aluminium closed 0.6% higher at $2,612.75/mt.

CURRENCIES

  • Yesterday, the South African rand strengthened against the US dollar. In the US, manufacturing activity jumped in July to its highest in 14 years, despite supply chain constraints and inflation pressures. Meanwhile, ISM manufacturing data reported a slower growth in manufacturing activity, amid continued material shortages and labour constraints. The ISM manufacturing employment data declined in July, as labour force shortages lead to delay in production, thus impacting the economic rebound.
  • The yield on benchmark government bonds fell yesterday. The yield on 2026 bond fell to 7.26%. Further, the yield on 2023 bond declined to 4.94%, while that for the longer-dated 2030 issue fell to 8.75%.
  • At 06:00 SAST, the US dollar is trading 0.2% lower against the South African rand at R14.4459, while the euro is trading 0.2% lower at R17.1503. At 06:00 SAST, the British pound has declined 0.1% against the South African rand to trade at R20.0740.
  • Yesterday, the euro declined against most of the major currencies. In Germany, retail sales surged more than expected in June, amid easing in lockdown restrictions. Factory activities in Germany grew faster, amid growth in new orders and employment. In the eurozone, factory activity accelerated, despite shortages of raw material and an increase in costs.
  • At 06:00 SAST, the euro marginally advanced against the US dollar to trade at $1.1871, while it has weakened 0.1% against the British pound to trade at GBP0.8545.

ECONOMIC UPDATES

  • In July, the manufacturing PMI registered a drop to 43.50 in South Africa, compared with a reading of 57.40 in the previous month.
  • The final manufacturing PMI in the UK registered a drop to 60.40 in July, at par with market expectations of a fall to 60.40. The preliminary figures had also indicated a fall to 60.40. In the prior month, the manufacturing PMI had recorded a reading of 63.90.
  • On a MoM basis, the consumer price index ( CPI ) dropped 0.1% in Switzerland, in July. In the previous month, the CPI had climbed 0.1%.
  • The manufacturing PMI eased to 59.00 in July, in Spain, more than market expectations for a fall to 59.50. The manufacturing PMI had recorded a reading of 60.40 in the previous month.
  • The manufacturing PM I in Italy recorded a drop to 60.30 in July, more than market expectations for a fall to a level of 61.50. The manufacturing PMI had recorded a reading of 62.20 in the previous month.
  • In France, the final manufacturing PMI registered a drop to 58.00 in July, compared with a level of 59.00 in the prior month. Market anticipations were for manufacturing PMI to drop to 58.10. The preliminary figures had indicated a fall to 58.10.
  • In Germany, retail sales recorded a rise of 4.2% on a MoM basis in June, compared with a similar rise of 4.2% in the prior month. Market anticipations were for retail sales to rise 2.0%.
  • The final manufacturing PMI in Germany climbed to 65.90 in July, more than market expectations for an advance to a level of 65.60. The preliminary figures had recorded a rise to 65.60. In the previous month, manufacturing PMI had registered a level of 65.10.
  • The final manufacturing PMI recorded a drop to 62.80 in July, in the eurozone, lower than market expectations of a fall to a level of 62.60. The manufacturing PMI had registered a reading of 63.40 in the previous month. The preliminary figures had indicated a drop to 62.60.
  • The final Markit manufacturing PMI climbed to 63.40 in July, in the US, higher than market expectations of an advance to a level of 63.10. The preliminary figures had recorded an advance to 63.10. In the previous month, the Markit manufacturing PMI had registered a reading of 62.10.
  • Construction spending in the US climbed 0.1% in June on a monthly basis, less than market expectations for an advance of 0.4%. Construction spending had fallen by a revised 0.2% in the previous month.
  • In July, the ISM manufacturing activity index in the US fell unexpectedly to 59.50. In the prior month, the ISM manufacturing activity index had registered a level of 60.60.
  • On an annual basis, the Tokyo CPI registered a drop of 0.1% in July, in Japan. In the previous month, the Tokyo CPI had recorded an unchanged reading of 0.0%.

CORPORATE UPDATES

SOUTH AFRICA

  • Oil slips on slumping Chinese economy: Oil prices fell as worries over China’s economy resurfaced after a survey showing growth in factory activity slipped sharply in the world’s second-largest oil consumer, with concerns compounded by higher crude output from Opec producers.

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