Market Review, Corporate Updates, Commodities & Currencies - 08.06.21

Published 2021/06/08, 08:49
Updated 2021/07/16, 11:15

SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the red yesterday, as global minimum corporate tax on technology companies backed by the Group of Seven (G7) advanced economies dampened investor morale.
  • Gold mining firms, Harmony Gold Mining (JO:HARJ), AngloGold Ashanti (JO:ANGJ) and Gold Fields (JO:GFIJ) declined 2.8%, 2.1% and 2.0%, respectively.
  • Platinum miners, Anglo American Platinum (JO:AMSJ), Northam Platinum (JO:NHMJ) and Impala Platinum Holdings (JO:IMPJ) dropped 2.2%, 1.4% and 0.9%, respectively.
  • On the other hand, banking firms, Nedbank Group (JO:NEDJ), Capitec Bank Holdings (JO:CPIJ) and Standard Bank Group (JO:SBKJ) gained 1.2%, 0.3% and 0.2%, respectively.
  • The JSE All Share index declined 0.4% to close at 67,575.42.

UK MARKET REVIEW

  • The UK market finished firmer yesterday, buoyed by gains in real estate and banking sector stocks.
  • Home builders, Persimmon (LON:PSN), Barratt Developments (LON:BDEV) and Taylor Wimpey (LON:TW) advanced 2.7%, 1.7% and 1.1%, respectively.
  • Banking firms, Barclays (LON:BARC), Standard Chartered (LON:STAN) and Lloyds Banking Group (LON:LLOY) rose 1.6%, 0.7% and 0.2%, respectively.
  • International Consolidated Airlines Group (LON:ICAG) S.A. climbed 2.8%, after report indicated that the US and UK airlines had issued a joint plea for a resumption of transatlantic travel between the two countries.
  • On the flipside, miners, Antofagasta (LON:ANTO), Anglo American and Glencore (LON:GLEN) dropped 2.8%, 2.7% and 1.8%, respectively.
  • The FTSE 100 index advanced 0.1% to close at 7,077.22.

US MARKET REVIEW

  • US markets ended mostly lower yesterday, as investors expressed caution on news of a global minimum corporate tax rate and lingering inflation fears.
  • Amazon.com (NASDAQ:AMZN) fell 0.3%, after reports indicated that the company will be covered by the G7 tax deal despite thin margins.
  • On the flip side, Biogen (NASDAQ:BIIB) surged 38.3%, after the US Food and Drug Administration approved its Alzheimer’s drug.
  • Royal Caribbean Cruises (NYSE:RCL) added 0.4%, after the company announced that six of its ships would begin sailing from Florida and Texas ports in July and August.
  • The S&P 500 index fell 0.1% to settle at 4,226.52, while the DJIA index declined 0.4% to close at 34,630.24.
  • The NASDAQ index climbed 0.5% to end the trading session at 13,881.72.

ASIA MARKET REVIEW

  • Asian markets are trading lower this morning.
  • Meanwhile, data indicated that Japan’s economy shrank less than expected in 1Q21.
  • In Japan, technology company, Sony Group (T:6758) has gained 0.9%.
  • Moreover, automakers, Mazda Motor (T:7261) and Honda Motor (T:7267) have added 0.2% and 0.1%, respectively.
  • In Hong Kong, Galaxy Entertainment Group (HK:0027) has climbed 0.6%.
  • Market heavyweight, Tencent Holdings (HK:0700) has added 0.1%.
  • In South Korea, technology company, LG Electronics (KS:066570) has dropped 0.7%. The Nikkei 225 index is trading 0.2% lower at 28,967.25.
  • The Hang Seng index is trading 0.4% lower at 28,685.67, while the Kospi index is trading 0.1% lower at 3,250.26.

COMMODITIES

  • At 06:00 SAST today, Brent spot prices fell 0.8% to trade at $70.43/bl, extending the previous session’s losses.
  • Yesterday, Brent spot prices fell 0.3% to settle at $70.98/bl, as demand concerns for crude and fuels were heightened by data indicating that China's oil imports fell in May. Meanwhile, OPEC Secretary General, Mohammad Barkindo indicated that OPEC+ expects crude oil inventories to fall in coming months.
  • Yesterday, the Illinois North Central No.2 Yellow corn spot prices fell 0.5% to $6.84/bushel.
  • At 06:00 SAST today, gold prices declined 0.2% to trade at $1,896.11/oz. Yesterday, gold gained 0.4% to close at $1,899.21/oz, amid cautious investor sentiment ahead of the release of US inflation data.
  • Yesterday, copper declined 0.6% to close at $9,881.25/mt. Aluminium closed 1.0% lower at $2,420.76/mt.

CURRENCIES

  • Yesterday, the South African rand weakened against the US dollar, on account of the release of disappointing trade data from China.
  • The yield on benchmark government bonds mostly fell yesterday. The yield on 2026 bond fell to 7.25%. Further, the yield on 2023 bond advanced to 4.99%, while that for the longer-dated 2030 issue fell to 8.73%.
  • At 06:00 SAST, the US dollar is trading 0.2% higher against the South African rand at R13.5355, while the euro is trading 0.2% higher at R16.4892. At 06:00 SAST, the British pound has gained 0.1% against the South African rand to trade at R19.1703.
  • Yesterday, the euro advanced against most of the major currencies, after investor confidence in the eurozone rose in June, reaching its highest level since February 2018, lifted by reopening restaurants and tourism resuming as coronavirus cases fall. However, German factory orders unexpectedly fell in April, as domestic demand dropped.
  • At 06:00 SAST, the euro slipped 0.1% against the US dollar to trade at $1.2182, while it has gained 0.1% against the British pound to trade at GBP0.8601.

ECONOMIC UPDATES

  • Gross gold & forex reserve climbed to $54.14bn in May, in South Africa. In the previous month, gross gold & forex reserve had registered a reading of $53.69bn.
  • The net gold & forex reserves advanced to $52.24bn in South Africa, in May. The net gold & forex reserves had registered a reading of $51.50bn in the prior month.
  • On a YoY basis, retail sales across all sectors advanced 18.5% in May, in the UK. Retail sales across all sectors had climbed 39.6% in the prior month.
  • The seasonally adjusted unemployment rate eased to 3.0% in May, in Switzerland. Unemployment rate had registered a revised reading of 3.2% in the previous month.
  • In May, on a MoM basis, the consumer price index in Switzerland rose 0.3%, in line with market expectations of a rise of 0.3%. The consumer price index had climbed 0.2% in the previous month.
  • In Germany, the seasonally adjusted factory orders registered a drop of 0.2% on a MoM basis in April, compared to market expectations of an advance of 1.0%. Factory orders had climbed by a revised 3.9% in the previous month.
  • The investor confidence index advanced unexpectedly to a level of 28.10 in the eurozone, in June. In the prior month, the investor confidence index had recorded a reading of 21.00.
  • Consumer credit registered a rise of $18.61bn in the US in April, compared to a revised advance of $18.58bn in the prior month. Markets were expecting consumer credit to advance $21.00 bn.
  • In April, (BOP basis) trade surplus in Japan fell to JPY289.50bn, following a (BOP basis) trade surplus of JPY983.10bn in the prior month.
  • On a QoQ basis in Japan, the final gross domestic product (GDP) registered a drop of 1.0% in 1Q21, less than market expectations for a drop of 1.2%. The preliminary figures had indicated a drop of 1.3%.
  • Compared to a level of 102.40 in the previous month, the flash leading economic index in Japan registered a rise to 103.00 in April.
  • The flash coincident index climbed to 95.50 in Japan, in April. In the previous month, the coincident index had recorded a level of 92.90.

CORPORATE UPDATES

SOUTH AFRICA

  • FirstRand Limited (JO:FSRJ): The banking company, in its trading update, announced that its headline earnings per share (HEPS), earnings per share (EPS) and normalised EPS for the year to 30 June 2020 will be exceeded by more than 35% in the year ending 30 June 2021. FirstRand’s HEPS, EPS, and normalised EPS will therefore be at least 417.00c, 409.70c and 415.50c, respectively.
  • Anglo American Plc (JO:AGLJ): The mining company announced the completion of the demerger of its thermal coal operations in South Africa. Thungela Resources Limited started trading on 7 June 2021, through a primary listing on the Johannesburg Stock Exchange under the abbreviated name Thungela, and a standard listing on the London Stock Exchange.
  • Gold inches down as stronger dollar offsets lower US bond yields: Gold prices edged lower as an uptick in the dollar dented the metal’s appeal, though lower US bond yields and prospects of a prolonged accommodative interest rate environment limited losses.

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