South Africa Market Review
- South African markets closed in the red yesterday, as investors assessed more than expected contraction in the economy for the fourth quarter.
- Food companies, AVI (JO:AVIJ) and Tiger Brands (JO:TBSJ) shed 4.6% and 0.5%, respectively.
- Diversified mining companies, African Rainbow Minerals (JO:ARIJ) and Pan African Resources (JO:PANJ) dropped 2.9% and 2.2%, respectively.
- Gold mining companies, Harmony Gold Mining (JO:HARJ), Gold Fields (JO:GFIJ) and AngloGold Ashanti (JO:ANGJ) declined 2.9%, 1.6% and 1.5%, respectively.
- Financial services companies, Standard Bank Group (JO:SBKJ), Absa Group (JO:ABGJ) and Nedbank Group (JO:NEDJ) fell 2.3%, 1.8% and 0.9%, respectively.
- On the flipside, real estate companies, Attacq (JO:ATTJ) and Dipula Income Fund (JO:DIBJ) advanced 1.1% and 0.7%, respectively.
- The JSE All Share index declined 0.2% to close at 78,556.54.
UK Market Review
- The UK market finished weaker yesterday, led by losses in mining sector stocks.
- Miner, Fresnillo (LON:FRES) shed 6.8%, after the company posted more than expected drop in its annual profits.
- Peers, Glencore (LON:GLEN), Antofagasta (LON:ANTO) and Anglo American (LON:AAL) declined 4.6%, 2.9% and 2.8%, respectively.
- Real estate companies, Land Securities Group (LON:LAND) and Hammerson (LON:HMSO) declined 2.1% and 1.9%, respectively.
- Retailers, Kingfisher (LON:KGF) and Next (LON:NXT) eased 0.9% and 0.5%, respectively.
- On the contrary, equipment rental company, Ashtead (LON:AHT) advanced 2.2%, after the company reported upbeat 3Q23 results and raised outlook for FY23.
- Pharmaceutical companies, Hikma Pharmaceuticals (LON:HIK) and AstraZeneca (LON:AZN) added 1.7% and 1.0%, respectively.
- The FTSE 100 index fell 0.1% to close at 7,919.48.
US Market Review
- US markets ended sharply lower yesterday, as hawkish stance from the US Federal Reserve (Fed) Chairman Jerome Powell hinted that quicker interest rate hikes to control inflation.
- Financial services companies, Goldman Sachs Group (NYSE:GS), JPMorgan Chase (NYSE:JPM) & Company and American Express (NYSE:AXP) shed 3.1%, 2.9% and 2.1%, respectively.
- Technology companies, Intel (NASDAQ:INTC), Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT) declined 1.8%, 1.5% and 1.1%, respectively.
- Consumer goods company, Procter & Gamble (NYSE:PG) dropped 2.0%.
- Meta Platforms (NASDAQ:META) eased 0.2%, amid reports that the company is planning for another round of layoffs.
- The S&P 500 index fell 1.5% to settle at 3,986.37, while the DJIA index declined 1.7% to close at 32,856.46.
- The NASDAQ index eased 1.2% to end the trading session at 11,530.33.
Asia Market Review
- Asian markets are trading mostly lower this morning, tracking overnight losses on Wall Street.
- In Japan, miner, Sumitomo Metal Mining Company (TYO:5713) has shed 3.0%.
- On the flipside, Mazda Motors (TYO:7261) and Mitsubishi Motors (TYO:7211) have gained 2.4% and 1.8%, respectively.
- In Hong Kong, internet technology company, NetEase (NASDAQ:NTES) has dropped 4.6%.
- Glass products company, Xinyi Glass Holdings (HK:0868) has declined 4.4%.
- In South Korea, Daewoo Shipbuilding (KS:042660) & Marine Engineering Company has declined 5.5%.
- On the other hand, electronics company, LG Electronics (KS:066570) has advanced 2.9%.
- The Nikkei 225 index is trading 0.3% higher at 28,380.39.
- The Hang Seng index has declined 2.5% to trade at 20,025.11, while the Kospi index is trading 1.4% lower at 2,429.52.
Commodities
- At 06:00 SAST today, Brent spot prices rose 0.5% to trade at $82.99/bl, reversing previous session losses.
- Yesterday, Brent spot prices fell 3.8% to settle at $82.56/bl, as hawkish comments from the Fed chief hinted at faster rate hikes denting demand for the dollar denominated commodity. Moreover, data indicated a drop in China’s crude oil imports in January and February. Meanwhile, the American Petroleum Institute (API) reported that the US crude oil inventories fell by 3.84mn bls in the week ended 3 March 2023.
- Yesterday, the Illinois North Central No.2 Yellow corn spot prices fell 0.4% to $6.54/bushel.
- At 06:00 SAST today, gold prices declined 0.2% to trade at $1,810.35/oz. Yesterday, gold declined 1.8% to close at $1,813.45/oz, as a stronger greenback dented demand for the safe haven yellow metal.
- Yesterday, copper declined 1.8% to close at $8,737.50/mt. Aluminium closed 1.4% lower at $2,300.75/mt.
Currencies
- Yesterday, the South African rand weakened against the US dollar. In South Africa, gross domestic product (GDP) contracted more than expected in 4Q22, amid rolling power blackouts.
- The yield on benchmark government bonds rose yesterday. The yield on 2026 bond rose to 8.53%. Further, the yield on the longer-dated 2030 issue rose to 10.14%.
- At 06:00 SAST, the US dollar is trading 0.7% higher against the South African rand at R18.6419, while the euro is trading 0.7% higher at R19.6346. At 06:00 SAST, the British pound has gained 0.3% against the South African rand to trade at R22.0274.
- Yesterday, the euro advanced against most of the major currencies. In Germany, seasonally adjusted factory orders unexpectedly rose in January.
- At 06:00 SAST, the euro slipped 0.2% against the US dollar to trade at $1.0533, while it has weakened 0.1% against the British pound to trade at GBP0.8914.
Economic Updates
- In South Africa, annualised gross domestic product (GDP) fell 1.3% on a QoQ basis in 4Q22, more than market expectations for a drop of 0.4%. In the prior quarter, annualised GDP recorded a revised rise of 1.8%.
- In Switzerland, the unemployment rate remained unchanged at 1.9%.
- In Germany, seasonally adjusted factory orders recorded a rise of 1.0% on a MoM basis in January, compared to a revised rise of 3.4% in the previous month. Market expectations were for factory orders to drop 1.0%.
- In the UK, the Halifax house price index climbed 1.1% on a MoM basis in February. In the previous month, the Halifax house price index had recorded a revised rise of 0.2%.
- In Japan, (BOP basis) trade deficit widened to JPY3,181.80bn in January, from a deficit of JPY1,225.60bn in the prior month.
- In China, trade surplus widened to $116.80bn, compared to a revised surplus of $78.01bn in the prior month.
- The Reserve Bank of Australia raised its key interest rate by 25 basis points to 3.6%, in line with market expectations.
Corporate Updates
South Africa
- Nedbank Group Limited (JO:NEDJ): The banking company, in its FY22 results, indicated that its net interest income rose to R36.28bn from R32.50bn posted in the corresponding previous year. Its diluted EPS increased 25.5% from the prior year to R28.51.
- Brimstone Investment Corporation Limited (JO:BRTJ): The investment company, in its annual results for the year ended 31 December 2022, reported that its revenue advanced 22.9% from the preceding year to R6.21bn. Its diluted EPS stood at 75.70c, compared with 291.70c recorded in the corresponding previous year.
- Mpact Limited (JO:MPTJ): The paper and packaging company, in its FY22 results, stated that its revenue increased to R12.37bn from R11.55bn posted in the corresponding previous year. Its diluted EPS from continuing operations rose 29.2% from the prior year to 444.20c.
- Shoprite Holdings Limited (JO:SHPJ): The retail company, in its 1H23 results, revealed that its revenue rose 17.2% from the same period of the preceding year to R108.69bn. Its diluted EPS stood at 570.60c, compared with 494.00c recorded in the corresponding period of the previous year.