Market Review, Corporate Updates, Commodities & Currencies - 05.09.22

  • Market Overview

South Africa Market Review

  • South African markets closed in the green on Friday, amid rise in commodity prices and following positive US nonfarm payrolls data.
  • Platinum miners, Impala Platinum (JO: IMPJ ), Northam Platinum (JO: NHMJ ) and Royal Bafokeng Platinum (JO: RBPCBe ) climbed 5.3%, 4.5% and 2.2%, respectively.
  • Gold miner, Gold Fields (JO: GFIJ ), AngloGold Ashanti (JO: ANGJ ) and Harmony Gold Mining (JO: HARJ ) jumped 4.9%, 4.6% and 1.2%, respectively.
  • Diversified miners, African Rainbow Minerals (JO: ARIJ ), Anglo American (JO: AMSJ ) and Kumba Iron Ore (JO: KIOJ ) gained 4.8%, 3.0% and 1.3%, respectively.
  • Real estate property companies, Emira Property Fund (JO: EMIJ ), Attacq (JO: ATTJ ) and Dipula Income Fund (JO: DIBJ ) advanced 4.0%, 1.9% and 1.8%, respectively.
  • Banks, Capitec Bank Holdings (JO: CPIJ ), FirstRand (JO: FSRJ ) and Absa Group (JO: ABGJ ) added 3.0%, 1.7% and 1.3%, respectively.
  • On the flipside, retailers, Steinhoff International Holdings (JO: SNHJ ), SPAR Group (JO: SPPJ ) and Lewis Group (JO: LEWJ ) declined 3.0%, 1.7% and 1.2%, respectively.
  • The JSE All Share index advanced 2.0% to close at 67,378.31.

UK Market Review

  • The UK market finished firmer on Friday, on the back of higher commodity prices. Miners, Fresnillo (LON: FRES ) and Antofagasta (LON: ANTO ) gained 5.5% and 4.9%, respectively.
  • Travel and leisure companies, International Consolidated Airlines Group S.A. (LON: ICAG ), Whitbread (LON: WTB ) and InterContinental Hotels Group (LON: IHG ) jumped 3.7%, 3.6% and 3.4%, respectively.
  • Oil and energy company, BP (LON: BP ) rose 2.8%, following strong crude oil prices.
  • Peer, Shell (LON: RDSa ) advanced 2.2%, after the company along with Exxon Mobil (NYSE: XOM ) finalised the sale of their California oil joint-venture Aera to German asset manager IKAV for a consideration of $4.00bn.
  • On the flipside, real estate companies, Berkeley Group Holdings (LON: BKGH ) and Barratt Developments (LON: BDEV ) declined 2.7% and 1.2%, respectively.
  • The FTSE 100 index advanced 1.9% to close at 7,281.19.

US Market Review

  • US markets ended lower on Friday, as August jobs report failed to ease concerns over rate hikes.
  • Starbucks Corporation (NASDAQ: SBUX ) dropped 2.9%. The coffeehouse company appointed Laxman Narasimhan as its new Chief Executive Officer (CEO).
  • Pharmaceutical companies, Regeneron Pharmaceuticals (NASDAQ: REGN ), Vertex Pharmaceuticals (NASDAQ: VRTX ) and Illumina (NASDAQ: ILMN ) declined 3.3%, 3.2% and 2.3%, respectively.
  • Technology companies, Intel (NASDAQ: INTC ), Cisco Systems (NASDAQ: CSCO ) and Apple (NASDAQ: AAPL ) shed 1.7%, 1.6% and 1.4%, respectively.
  • On the contrary, Lululemon Athletica (NASDAQ: LULU ) jumped 6.7%, after the apparel company reported stronger than expected sales in 2Q22.
  • Broadcom (NASDAQ: AVGO ) added 1.7%, after the semiconductor manufacturing company reported higher income in 3Q22. The S&P 500 index fell 1.1% to settle at 3,924.26, while the DJIA index declined 1.1% to close at 31,318.44.
  • The NASDAQ index eased 1.3% to end the trading session at 11,630.86.

Asia Market Review

  • Asian markets are trading mostly lower this morning. On the data front, service activity in China dropped in August.
  • On the equity front, in Japan, automobile company, Mazda Motor Corporation (TYO: 7261 ) has declined 1.7%.
  • On the flipside, industrial automation solutions company, Yokogawa Electric Corporation (TYO: 6841 ) has gained 1.8%.
  • In Hong Kong, glass manufacturing company, Xinyi Glass Holdings (HK: 0868 ) has shed 3.0%.
  • On the other hand, real estate company, Longfor Group Holdings (HK: 0960 ) added 1.2%.
  • In South Korea, project and construction management company, HamniGlobal has surged 7.0%.
  • On the contrary, information technology company, Hansol PNS (KS: 010420 ) has dropped 5.9%.
  • The Nikkei 225 index is trading 0.1% lower at 27,623.40.
  • The Hang Seng index has fallen 1.2% to trade at 19,211.5, while the Kospi index is trading 0.2% lower at 2,405.50.

Commodities

  • At 06:00 SAST today, Brent spot prices rose 2.0% to trade at $95.64/bl, extending previous sessions gains.
  • On Friday, Brent spot prices rose 1.5% to settle at $93.8/bl, amid expectations that OPEC+ would cut its output. Meanwhile, Baker Hughes reported that oil rigs count dropped by 9 to 596 in the week ended 2 September 2022.
  • On Friday, the Illinois North Central No.2 Yellow corn spot prices rose marginally to $6.75/bushel.
  • At 06:00 SAST today, gold prices marginally advanced to trade at $1,712.21/oz. On Friday, gold gained 0.9% to close at $1,712.19/oz, as a stronger greenback dented demand for the precious yellow metal.
  • On Friday, copper rose 0.5% to close at $7,691.00/mt. Aluminium closed 0.2% lower at $2,297.75/mt.

Currencies

  • On Friday, the South African rand weakened against the US dollar. In the US, the jobs market improved with employers hiring more workers than expected in August, indicating a cooling labour market. Factory orders dropped in July, amid fall in orders in the petroleum sector.
  • The yield on benchmark government bonds fell on Friday. The yield on 2026 bond fell to 8.91%. Further, the yield on the longer-dated 2030 issue fell to 10.34%.
  • At 06:00 SAST, the US dollar is trading 0.3% higher against the South African rand at R17.356, while the euro is trading 0.2% lower at R17.2013. At 06:00 SAST, the British pound has marginally gained against the South African rand to trade at R19.9101.
  • On Friday, the euro advanced against most of the major currencies. In the eurozone, the producer inflation accelerated in July, following a surge in energy prices.
  • At 06:00 SAST, the US dollar is trading 0.2% lower against the South African rand at R17.2013, while the euro is trading marginally higher at R19.9101. At 06:00 SAST, the British pound has declined 0.4% against the South African rand to trade at R0.9911.

Economic Updates

  • In Germany, the seasonally adjusted trade surplus narrowed to EUR5.40bn in July, following a revised surplus of EUR6.20bn in the prior month.
  • In the eurozone, the producer price index ( PPI ) climbed 4.0% on a MoM basis in July, more than market expectations for an advance of 2.5%. In the previous month, the PPI had advanced by a revised 1.3%.
  • In the US, average hourly earnings of all employees rose 0.3% on a MoM basis in August, compared with a rise of 0.5% in the previous month. Market expectations were for average hourly earnings of all employees to rise 0.4%.
  • In the US, non-farm payrolls rose by 315.00 K in August, higher than market anticipations for an advance of 300.00 K jobs. In the previous month, non-farm payrolls climbed by a revised 526.00 K.
  • In the US, the unemployment rate rose to 3.7% in August, compared to 3.5% in the prior month.
  • In the US, on a MoM basis, factory orders unexpectedly dropped 1.0% in July, compared to market expectations for an advance of 0.2%. Factory orders had climbed by a revised 1.8% in the previous month.
  • In Japan, the Jibun Bank services PMI dropped to a level of 49.50 in August, compared to 50.30 in the previous month. The preliminary figures had recorded a drop to a level of 49.20
  • In China, the Caixin/Markit services PMI index declined to a level of 55.00 in August. The Caixin/Markit services PMI index had registered a level of 55.50 in the previous month.

Corporate Updates

South Africa

  • G-7 plans price cap for purchases of Russian oil: The Group of Seven most industrialised countries said they plan to implement a price cap for global purchases of Russian oil — a measure the US hopes will ease energy market pressures and slash Moscow’s overall revenues

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