Market Review, Corporate Updates, Commodities & Currencies - 07.10.21

  • Market Overview

South Africa Market Review

  • South African markets closed in the red yesterday, pulled down by broad-based losses in mining sector stocks and as increased energy prices led to concerns about a hike in inflation.
  • Anglo American (JO: AMSJ ), African Rainbow Minerals (JO: ARIJ ) and BHP Group (JO: BHPJ ) shed 3.1%, 2.0% and 1.5%, respectively.
  • Retail sector stocks, Cie Financiere Richemont SA (JO: CFRJ ), Steinhoff International Holdings N.V. (JO: SNHJ ) and Massmart Holdings (JO: MSMJ ) declined 2.4%, 0.7% and 0.5%, respectively.
  • On the flipside, real estate property sector stocks, Attacq (JO: ATTJ ) and Dipula Income Fund (JO: DIBJ ) added 3.0% and 1.0%, respectively, However, peer, Delta Property Fund (JO: DLTJ ) plunged 7.0%.
  • Banking companies, RMB Holdings (JO: RMHJ ), Nedbank Group (JO: NEDJ ) and FirstRand (JO: FSRJ ) advanced 1.3%, 0.8% and 0.7%, respectively.
  • The JSE All Share index declined 0.9% to close at 63,987.02.

UK Market Review

  • The UK market finished weaker yesterday, dragged down by concerns about rising inflation and interest rates.
  • Tobacco company, Imperial Brands (LON: IMB ) shed 3.8%.
  • Meanwhile, the company revealed that it is in line with its expectations to meet its earnings guidance, buoyed by robust performance of its businesses.
  • Mining companies, Antofagasta (LON: ANTO ), Anglo American (LON: AAL ) and BHP Group (LON: BHPB ) dropped 5.5%, 2.9% and 1.4%, respectively.
  • On the flipside, supermarket company, Tesco (LON: TSCO ) surged 6.0%, after the company raised its guidance for FY22, following stronger sales and robust profits in its 1H22 results.
  • Banking companies, HSBC Holdings (LON: HSBA ) and Standard Chartered (LON: STAN ) advanced 3.4% and 2.0%, respectively.
  • The FTSE 100 index declined 1.1% to close at 6,995.87.

US Market Review

  • US markets ended higher yesterday, buoyed by gains in technology sector stocks.
  • Microsoft (NASDAQ: MSFT ), salesforce.com (NYSE: CRM ) and Apple (NASDAQ: AAPL ) advanced 1.5%, 1.3% and 0.6%, respectively.
  • Facebook (NASDAQ: FB ) gained 0.2%, following reports that the company slowed the rollout of its new products in recent days, amid allegations that a trove of internal documents indicate harm from its platform.
  • On the contrary, General Motors (NYSE: GM ) declined 0.8%, after the company revealed that a Memorandum of Understanding (MoU) has been signed by it to enhance supplies of rare earth materials, magnets, copper and electrical steel used in making electric vehicles and renewable energy equipment.
  • The S&P 500 index rose 0.4% to settle at 4,363.55, while the DJIA index advanced 0.3% to close at 34,416.99.
  • The NASDAQ index climbed 0.5% to end the trading session at 14,501.91.

Asia Market Review

  • Asian markets are trading higher this morning, tracking overnight gains on Wall Street.
  • In Japan, transport company, Kawasaki Kisen Kaisha (T: 9107 ) has soared 7.5%. On the contrary, pharmaceutical company, Takeda Pharmaceutical (T: 4502 ) has shed 3.9%.
  • In Hong Kong, Alibaba Health Information Technology (HK: 0241 ) has surged 6.0%.
  • On the flipside, energy company, PetroChina (HK: 0857 ) has dropped 3.9%.
  • In South Korea, technology company, LG Electronics (KS: 066570 ) has added 2.9%.
  • On the other hand, theatre company, Century has plunged 14.0%. The Nikkei 225 index is trading 1.1% higher at 27,817.95.
  • The Hang Seng index has advanced 2.3% to trade at 24,510.19, while the Kospi index is trading 1.5% higher at 2,952.74.

Commodities

  • At 06:00 SAST today, Brent spot prices fell 0.1% to trade at $81.10/bl, extending the previous session’s losses.
  • Yesterday, Brent spot prices fell 2.3% to settle at $81.17/bl, after the US Energy Information Administration (EIA) reported that US crude inventories advanced by 2.30mn bls for the week ended 1 October. Moreover, the US oil production increased to 11.30mn bls per day, recovering from storm-related shutdowns more than a month ago to rebound near COVID-19 pandemic-level highs. However, it still far from the 13.00mn bpd record set in 2019.
  • Yesterday, the Illinois North Central No.2 Yellow corn spot prices fell 1.1% to $4.95/bushel.
  • At 06:00 SAST today, gold prices declined 0.2% to trade at $1,758.69/oz. Yesterday, gold gained 0.1% to close at $1,762.74/oz, as a weaker dollar boosted demand for safe haven yellow metal.
  • Yesterday, copper declined 1.4% to close at $9,052.60/mt. Aluminium closed 0.7% lower at $2,883.75/mt.

Currencies

  • Yesterday, the South African rand strengthened against the US dollar. In the US, the ADP National Employment data showed that private payrolls increased in September, on account of a drop in COVID-19 infections and a surge in hiring processes. Meanwhile, the MBA mortgage applications dropped for the week ended 1 October, following an increase in interest rates to its highest since July.
  • The yield on benchmark government bonds rose yesterday. The yield on 2026 bond rose to 7.82%. Further, the yield on 2023 bond advanced to 5.20%, while that for the longer-dated 2030 issue stood at 9.48%.
  • At 06:00 SAST, the US dollar is trading marginally higher against the South African rand at R14.9814, while the euro is trading marginally higher at R17.3104. At 06:00 SAST, the British pound has marginally gained against the South African rand to trade at R20.3478.
  • Yesterday, the euro declined against most of the major currencies. In Germany, industrial orders dropped more than expected in August, following weaker demand from abroad after two months of unusually strong gains due to major contracts. In the eurozone, retail sales declined more than expected with consumer spending on food, beverages and tobacco products reducing.
  • At 06:00 SAST, the euro marginally slipped against the US dollar to trade at $1.1555, while it has marginally weakened against the British pound to trade at GBP0.8508.

Economic Updates

  • The construction PMI registered a drop to 52.60 in September, in UK, compared to a level of 55.20 in the previous month. Markets were anticipating the construction PMI to ease to a level of 54.00.
  • In Spain, the calendar adjusted industrial output registered a rise of 1.8% on an annual basis in August, compared to a revised rise of 3.3% in the prior month. Markets were anticipating the calendar adjusted industrial output to advance 3.5%.
  • In Germany, the seasonally adjusted factory orders eased 7.7% in August on a MoM basis, more than market expectations for a fall of 2.1%. Factory orders had risen by a revised 4.9% in the previous month.
  • Retail sales in the eurozone advanced 0.3% in August on a monthly basis, less than market expectations for an advance of 0.8%. In prior month, the seasonally adjusted retail sales had registered a revised drop of 2.6%.
  • On a weekly basis, the number of mortgage applications in the US eased 6.9% in the week ended 01 October 2021. The number of mortgage applications had recorded a drop of 1.1% in the previous week.

Corporate Updates

South Africa

  • Datatec Limited (JO: DTCJ ): The information technology company, in its 1H22 trading statement, revealed that it expects its EPS to be between 6.10c and 6.40c as compared with 1.60c in the corresponding previous year. It expects its HEPS to be between 6.10c and 6.40c as compared with 1.60c in the corresponding prior year.
  • Zedar Investments Limited: The investment company, in its 1H22 results, indicated that its investment income rose to R116.00mn from R43.00mn posted in the corresponding period of the previous year. Its diluted EPS decreased to 25.50c from 91.30c recorded in the same period of the prior year.
  • Oil hits highest level in three years: Oil hit a multiyear high above $83 a barrel, supported by a refusal by Opec+ to ramp up production more rapidly against a backdrop of concern about tight energy supply globally.

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