South Africa Market Review
- South African markets closed in the red yesterday, dampened by broad based losses in retail and mining sector stocks.
- Retailers, Lewis Group (JO:LEWJ), Massmart Holdings (JO:MSMJ) declined 5.8% and 1.9%, respectively.
- Diversified miners, Exxaro Resources (JO:EXXJ), Anglo American (JO:AMSJ) and African Rainbow Minerals (JO:ARIJ) declined 3.8%, 3.6% and 1.8%, respectively.
- Platinum miners, Anglo American Platinum (JO:AMSJ) declined 1.7%.
- Property dealers, Capital & Counties Properties (JO:CCOJ) and Growthpoint Properties (JO:GRTJ) eased 0.8% and 0.6%, respectively.
- On the flipside, MTN (JO:MTNJ) advanced 2.3%, after it upgraded its HEPS to rise between 40.0% and 50.0% for the half year ended June.
- Pharmaceutical companies, Netcare (JO:NTCJ) and Life Healthcare Group (JO:LHCJ) added 0.8% and 0.7%, respectively.
- The JSE All Share index declined 0.4% to close at 68,642.59.
- The UK market finished weaker yesterday, dragged down by broad based losses in mining sector stocks.
- Miners, Anglo American. Antofagasta (LON:ANTO) and Fresnillo (LON:FRES) declined 4.0%, 1.7% and 1.3%, respectively.
- Oil and energy companies, Shell (LON:RDSa) and BP (LON:BP) shed 2.0% and 1.9%, respectively.
- Pharmaceutical companies, GSK (LON:GSK) and AstraZeneca (LON:AZN) declined 2.0% and 1.3%, respectively.
- On the other hand, publishing and education company, Pearson (LON:PSON) surged 12.7%, after the group reported an upbeat 1H22 results and reiterated its FY22 profit outlook.
- Banking company, HSBC Holdings (LON:HSBA) soared 6.1%, after the company announced higher profitability target and rejected proposal from Ping An Insurance Group of China to split the bank.
- The FTSE 100 index declined 0.1% to close at 7,413.42.
US Market Review
- US markets ended lower yesterday, as factory output dropped to a 25-month low in July.
- Energy companies, Exxon Mobil (NYSE:XOM) and Chevron Corporation (NYSE:CVX) declined 2.5% and 2.0%, respectively.
- On the other hand, electric vehicle manufacturing company, Nikola Corporation (NASDAQ:NKLA) soared 7.9%, after the company announced that it will acquire battery pack supplier, Romeo Power for $144.00mn.
- Aerospace company, Perkin Elmer (NYSE:PKI) gained 5.0%, after the disease diagnosis company announced an agreement to sell its Applied, Food and Enterprise Services businesses for $2.45bn in cash to New Mountain Capital.
- The S&P 500 index fell 0.3% to settle at 4,118.63, while the DJIA index declined 0.1% to close at 32,798.40.
- The NASDAQ index eased 0.2% to end the trading session at 12,368.98.
Asia Market Review
- Asian markets are trading lower this morning, as a weaker manufacturing data raised recession fears.
- In Japan, pharmaceutical company, Chugai Pharmaceutical (TYO:4519) has shed 4.1%.
- On the flipside, chemical manufacturing company, Sumitomo Chemical (TYO:4005) has advanced 1.5%.
- In Hong Kong, electronics company, Xiaomi Corporation (HK:1810) has plunged 6.9%. Resort company, Sands China (HK:1928) has plummeted 6.1%.
- In South Korea, pharmaceutical company, Kwang Dong Pharma (KS:009290) has dropped 4.6%.
- On the contrary, weapon manufacturing company, Firstec (KS:010820) has jumped 7.8%.
- The Nikkei 225 index is trading 1.4% lower at 27,599.64.
- The Hang Seng index has declined 2.6% to trade at 19,635.74, while the Kospi index is trading 0.8% lower at 2,432.99.
Commodities
- At 06:00 SAST today, Brent spot prices rose 0.5% to trade at $103.84/bl, reversing previous sessions losses.
- Yesterday, Brent spot prices fell 4.3% to settle at $103.33/bl, as a weaker manufacturing data raised concerns for a drop in demand while investors braced for OPEC+ meeting.
- Yesterday, the Illinois North Central No.2 Yellow corn spot prices fell 1.3% to $6.67/bushel.
- At 06:00 SAST today, gold prices advanced 0.2% to trade at $1,774.95/oz. Yesterday, gold gained 0.4% to close at $1,772.17/oz, as a weaker dollar boosted demand for the safe haven yellow metal.
- Yesterday, copper declined 1.4% to close at $7,821.25/mt. Aluminium closed 2.4% lower at $2,444.71/mt.
Currencies
- Yesterday, the South African rand strengthened against the US dollar. In South Africa, the manufacturing activity dropped in July, dampened by electricity supply constraints and weakening global growth. In the US, manufacturing activity slowed for the second straight month in July, to a 2-year low, amid weakening economic outlook and supply bottlenecks.
- The yield on benchmark government bonds advanced yesterday. The yield on 2026 bond rose to 9.05%. Further, the yield on the longer-dated 2030 issue rose to 10.44%.
- At 06:00 SAST, the US dollar is trading 0.1% higher against the South African rand at R16.5379, while the euro is trading 0.2% higher at R16.9906. At 06:00 SAST, the British pound has gained 0.1% against the South African rand to trade at R20.2682.
- Yesterday, the euro mostly declined against most of the major currencies. In the eurozone, manufacturing activity contracted in July as production logged the sharpest fall since early 2020. In Germany, retail sales dropped in June, recording its fastest drop in almost 30 years, amid inflation, geopolitical tensions in Ukraine and the coronavirus pandemic.
- At 06:00 SAST, the euro advanced 0.1% against the US dollar to trade at $1.0273, while it has gained 0.1% against the British pound to trade at GBP0.8382.
Economic Updates
- In July, the manufacturing PMI recorded a drop to 47.60 in South Africa. The manufacturing PMI had registered a level of 52.20 in the prior month.
- In July, on an annual basis, new vehicle sales in South Africa climbed 13.92%. In the previous month, new vehicle sales had advanced 7.6%.
- The final manufacturing PMI in the UK recorded a drop to 52.10 in July, more than market expectations for a fall to 52.20. The preliminary figures had recorded a fall to 52.20. In the previous month, the manufacturing PMI had recorded a level of 52.80.
- In Spain, the manufacturing PMI fell to a level of 48.70 in July, higher than market expectations of a drop to 50.40. In the prior month, the manufacturing PMI had recorded a reading of 52.60.
- The manufacturing PMI in Italy recorded a drop to 48.50 in July, more than market expectations for a drop to 49.30. The manufacturing PMI had registered a reading of 50.90 in the prior month.
- The final manufacturing PMI in France fell to a level of 49.50 in July, compared with a reading of 51.40 in the previous month. The preliminary figures had indicated a fall to 49.60.
- In July, the final manufacturing PMI recorded a drop to 49.30 in Germany. In the previous month, manufacturing PMI had recorded a level of 52.00. The preliminary figures had recorded a fall to 49.20.
- The final manufacturing PMI recorded a drop to 49.80 in July, in the eurozone, lower than market expectations of a drop to 49.60. The manufacturing PMI had registered a level of 52.10 in the prior month. The preliminary figures had indicated a drop to 49.60.
- In June, the unemployment rate in the eurozone remained steady at a level of 6.6%, at par with market expectations of an unchanged reading of 6.6%. In the prior month, the unemployment rate had registered a similar level of 6.6%.
- The final Markit manufacturing PMI fell to a level of 52.20 in July, in the US, more than market expectations for a fall to 52.30. In the prior month, the Markit manufacturing PMI had registered a level of 52.70. The preliminary figures had indicated a fall to 52.30.
- In June, construction spending in the US registered a drop of 1.1% on a MoM basis, compared with market expectations of an advance of 0.3%. In the prior month, construction spending had risen by a revised 0.1%.
- The ISM manufacturing activity index in the US fell to a level of 52.80 in July, compared with a reading of 53.00 in the previous month. Markets were expecting the ISM manufacturing activity index to drop to 52.90.
- In the US, the ISM prices paid index dropped to 60.00 in July. In the previous month, the ISM prices paid index had registered a reading of 78.50.
- In July, the final Markit manufacturing PMI registered a drop to 55.70 in Australia, compared with a level of 56.20 in the previous month. The preliminary figures had also indicated a fall to 55.70.
Corpoarate Updates
South Africa
- Liberty Two Degrees Limited (JO:L2DJ): The real estate company, in its 1H22 results, reported that its revenue advanced 3.8% from the same period of the preceding year to R455.57mn. Its diluted EPS stood at 11.14c, compared with 19.59c recorded in the corresponding period of the previous year.
- MTN Group Limited (JO:MTNJ): The telecommunication company, in its 1H22 trading update, announced that it expects to report an increase in EPS between 437.00c and 451.00c as compared with 148.00c reported in the same period of the prior year. It expects its HEPS to be between 40.0% and 50.0% higher as compared with 387.00c reported in the corresponding previous year.
- Conduit Capital says regulator too quick to act against insurance unit: Conduit Capital’s (JO:CNDJ) share price plummeted after its subsidiary, Constantia Insurance, was placed under provisional curatorship by the high court — a decision it argues is premature given that it is in talks with investors about a possible capital injection.