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Market Review, Corporate Updates, Commodities & Currencies - 07.06.21

Published 2021/06/07, 12:06
Updated 2021/07/16, 11:15
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South Africa Market Review

  • South African markets closed in the green on Friday, buoyed by gains in healthcare and mining sector stocks.
  • Healthcare companies, Life Healthcare Group Holdings (JO:LHCJ), Adcock Ingram Holdings (JO:ADEOJ) and Mediclinic International (LON:MDCM) rose 2.6%, 1.3% and 0.9%, respectively.
  • Miners, Anglo American (JO:AMSJ), African Rainbow Minerals (JO:ARIJ) and BHP Group (JO:BHPJ) gained 1.2%, 1.1% and 0.2%, respectively.
  • Real estate companies, Dipula Income Fund (JO:DIBJ), Attacq (JO:ATTJ) and Capital & Counties Properties (JO:CCOJ) advanced 2.4%, 1.3% and 1.0%, respectively.
  • On the flipside, banking firms, Standard Bank Group (JO:SBKJ), FirstRand (JO:FSRJ) and Capitec Bank Holdings (JO:CPIJ) dropped 2.0%, 1.0% and 0.9%, respectively.
  • The JSE All Share index marginally advanced to close at 67,825.02.

UK Market Review

  • The UK market finished firmer on Friday.
  • Online grocery and food companies, Ocado Group (LON:OCDO) and Just Eat Takeaway (LON:JETJ) advanced 3.0% and 2.0%, respectively.
  • Miners, Anglo American (LON:AAL), BHP Group (LON:BHPB) and Rio Tinto (LON:RIO) added 1.7%, 0.9% and 0.8%, respectively.
  • Retailer, Next (LON:NXT) rose 1.6%. On the flipside, airline company, International Consolidated Airlines Group (LON:ICAG) SA declined 0.9%, as no new countries were added to the safe green list of the UK government's updated travel list.
  • Smurfit Kappa Group (LON:SKG) dropped 0.9%, after the company agreed to purchase Peruvian packaging company, Cartones del Pacifico, for an undisclosed sum.
  • The FTSE 100 index advanced 0.1% to close at 7,069.04.

US Market Review

  • US markets ended higher on Friday, despite weaker-than-expected jobs growth. salesforce.com (NYSE:CRM) surged 2.9%.
  • Microsoft (NASDAQ:MSFT), Intel (NASDAQ:INTC) and Apple (NASDAQ:AAPL) gained 2.1%, 2.0% and 1.9%, respectively.
  • Regeneron Pharmaceuticals (NASDAQ:REGN) advanced 1.2%, after the company reported that the US regulators had authorized a lower-dose and subcutaneous version of its COVID-19 antibody treatment.
  • Pfizer (NYSE:PFE) rose 0.5%, after the Medicines and Healthcare products Regulatory Agency approved its COVID-19 vaccine for 12 to 15-year-olds in the UK.
  • On the flipside, health care company, UnitedHealth Group (NYSE:UNH) shed 0.6%. The S&P 500 index rose 0.9% to settle at 4,229.89, while the DJIA index advanced 0.5% to close at 34,756.39.
  • The NASDAQ index climbed 1.5% to end the trading session at 13,814.49.

Asia Market Review

  • Asian markets are trading mostly higher this morning, tracking Friday’s gains on Wall Street. Meanwhile, finance ministers from the G-7 over the weekend backed a US proposal that calls for firms globally to pay at least 15.0% tax on earnings.
  • In Japan, video game company, Konami Holdings (T:9766) has surged 6.1%.
  • On the other hand, steel making companies, JFE Holdings (T:5411) and Nippon Steel (T:5401) have plunged 6.9% and 5.7%, respectively.
  • In Hong Kong, automotive company, Geely Automobile Holdings (HK:0175) has shed 4.3%.
  • In South Korea, technology company, LG Electronics (KS:066570) has gained 1.3%.
  • On the flipside, peer, Samsung Electronics (KS:005930) has eased 0.4%.
  • The Nikkei 225 index is trading 0.3% higher at 29,031.33.
  • The Hang Seng index is trading 0.8% weaker at 28,697.40, while the Kospi index is trading 0.2% higher at 3,244.81

Commodities

  • At 06:00 SAST today, Brent spot prices rose 0.1% to trade at $71.23/bl, extending the previous session’s gains.
  • On Friday, Brent spot prices rose 0.4% to settle at $71.19/bl. Baker Hughes reported that the number of active US oil drilling rigs remained steady at 359 for the week ended 4 June 2021.
  • On Friday, the Illinois North Central No.2 Yellow corn spot prices rose 3.1% to $6.88/bushel.
  • At 06:00 SAST today, gold prices declined 0.2% to trade at $1,887.38/oz. On Friday, gold gained 1.1% to close at $1,891.59/oz, as the greenback lost ground on account of disappointing US jobs data which bolstered demand for the safe haven metal.
  • On Friday, copper rose 1.7% to close at $9,939.50/mt. Aluminium closed 2.5% higher at $2,444.75/mt.

Currencies

  • On Friday, the South African rand strengthened against the US dollar, after US employment data indicated that the country created fewer jobs than analysts expected in May. Also, in the US, nonfarm payrolls increased less than expected in May, on account of childcare issues, generous unemployment checks and lingering fears over COVID-19. However, unemployment rate fell by more than expected in April.
  • The yield on benchmark government bonds mostly fell on Friday. The yield on 2026 bond fell to 7.26%. Further, the yield on 2023 bond advanced to 4.98%, while that for the longer-dated 2030 issue fell to 8.78%.
  • At 06:00 SAST, the US dollar is trading marginally lower against the South African rand at R13.4311, while the euro is trading marginally lower at R16.3358. At 06:00 SAST, the British pound has declined 0.1% against the South African rand to trade at R18.9930.
  • On Friday, the euro declined against most of the major currencies, after eurozone retail sales fell more than expected in April, dragged down by a decline in sales of non-food products, but they were still much higher than 12 months earlier when most countries were under strict pandemic lockdowns.
  • At 06:00 SAST, the euro marginally slipped against the US dollar to trade at $1.2163, while it has gained 0.1% against the British pound to trade at GBP0.8601.

Economic Updates

  • In May, the construction PMI in the UK rose to a level of 64.20, compared to a reading of 61.60 in the previous month. Market expectations were for the construction PMI to climb to 62.30.
  • In April, on a MoM basis, the seasonally adjusted retail sales in the eurozone eased 3.1%, compared to a revised rise of 3.3% in the prior month. Markets were expecting retail sales to fall 1.2%.
  • In May, unemployment rate in the US fell to a level of 5.8%, compared to a level of 6.1% in the previous month. Markets were anticipating unemployment rate to fall to 5.9%.
  • In May, the unemployment rate advanced to 8.2% in Canada, meeting market expectations of a rise to a level of 8.2%. In the previous month, the unemployment rate had recorded a level of 8.1%.
  • The labour force participation rate in the US registered a drop to 61.6% in May. The labor force participation rate had recorded a reading of 61.7% in the previous month.
  • Non-farm payrolls in the US rose by 559.00K in May, compared to market anticipations of an advance of 650.00K jobs. The US had recorded a revised gain of 278.00K jobs in the prior month.
  • On a MoM basis, in the US, average hourly earnings of all employees advanced 0.5% in May, higher than market expectations of a rise of 0.2%. In the previous month, average hourly earnings of all employees had climbed 0.7%.
  • In May, trade surplus in China widened to $45.53bn, following a trade surplus of $42.86bn in the previous month. Markets were anticipating the nation to record a trade surplus of $50.50bn.

Corporate Updates

South Africa

  • Mondi Plc (LON:MNDI): The multinational paper and packaging company signed a new revolving multicurrency credit facility agreement (‘RCF’) of EUR750.00mn for 5 years to refinance the existing EUR750.00mn facility that was due to mature in July 2022. Under the terms of the agreement, the margin will be adjusted according to the Group’s performance against specified sustainability targets. The facility was self-arranged with 10 relationship banks: Barclays (LON:BARC), BBVA (MC:BBVA), Bank of America (NYSE:BAC), BNP Paribas (PA:BNPP), Commerzbank (DE:CBKG), Deutsche Bank (DE:DBKGn), Erste Group (VIE:ERST), Raiffeisen Bank International (LON:0NXR), SEB (ST:SEBa) and UniCredit (DE:CRIG).
  • Oil edges higher on rising global demand: Oil rose towards $72 a barrel, trading close to a two-year high as Opec+ supply discipline and recovering demand countered concerns about patchy Covid-19 vaccination rollout around the globe.

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