Market Review, Corporate Updates, Commodities & Currencies - 10.08.21

SOUTH AFRICA MARKET REVIEW

• South African markets closed in the green on Friday, as the release of robust US nonfarm payrolls data boosted investor morale.
• Mining sector stocks, BHP Group (JO: BHPJ ), Anglo American (JO: AMSJ ) and African Rainbow Minerals (JO: ARIJ ) advanced 2.0%, 1.9% and 0.8%, respectively.
• Real estate sector stocks, Capital & Counties Properties, Accelerate Property Fund (JO: APFJ ) and Attacq (JO: ATTJ ) rose 2.1%, 1.1% and 0.6%, respectively.
• Banking sector stocks, Standard Bank (JO: SBKJ ) Group and Absa Group (JO: ABGJ ) Limited gained 1.1% and 0.6%, respectively.
• On the flipside, gold mining sector stocks, AngloGold Ashanti (JO: ANGJ ), Gold Fields (JO: GFIJ ) and Sibanye Stillwater (JO: SSWJ ) plunged 12.0%, 6.8% and 1.3%, respectively.
• Retail companies, Lewis Group (JO: LEWJ ) and Massmart Holdings (JO: MSMJ ) shed 1.7% and 0.7%, respectively.
• The JSE All Share index advanced 0.4% to close at 68,673.95.

UK MARKET REVIEW

• The UK market finished firmer yesterday. However, gains were capped on account of weaker domestic corporate results releases.
• Energy company, SSE (LON: SSE ) soared 5.0%, following reports that activist investor, Elliott Management has built a stake in the company, driving opinions that this could lead to a takeover bid or could also result in the company splitting up.
• Mining sector stocks, Rio Tinto (LON: RIO ) and Anglo American (LON: AAL ) added 0.9% and 0.8%, respectively.
• On the flipside, financial service company, Hargreaves Lansdown (LON: HRGV ) plummeted 11.3%, after the company reported less than expected FY21 profits, despite adding record number of new clients.
• Energy stocks, Royal Dutch Shell (LON: RDSa ) and BP (LON: BP ) shed 0.8% and 0.7%, respectively.
• The FTSE 100 index advanced 0.1% to close at 7,132.30.

US MARKET REVIEW

• US markets ended mostly lower yesterday, following concerns over the spread of the Delta coronavirus variant.
• Bluebird Bio plunged 27.5%, after the company announced certain complications regarding its business in its 2Q21 results.
• Air Products (NYSE: APD ) & Chemicals shed 5.2%, after the company posted a less than expected increase in its 3Q21 profits.
• Norwegian Cruise Line Holdings (NYSE: NCLH ) shed 0.9%.
• Meanwhile, a federal judge supported the company in its fight against Florida’s rule that businesses don’t need proof of COVID-19 vaccination.
• On the flipside, Tyson Foods (NYSE: TSN ) surged 8.7%.
• The S&P 500 index fell 0.1% to settle at 4,432.35. while the DJIA index declined 0.3% to settle at 35,101.85.
• The NASDAQ index climbed 0.2% to end the trading session at 14,860.18.

ASIA MARKET REVIEW

• Asian markets are trading mostly higher this morning.
• In Japan, biopharmaceutical company, Liminal BioSciences (NASDAQ: LMNL ) has surged 27.6%.
• In Hong Kong, optical products company, Sunny Optical Technology Group (HK: 2382 ) has declined 4.7%.
• On the other hand, Evergrande Property Services Group (HK: 6666 ) (HK: 6666 ) has soared 9.9%, following reports that it is in talks to sell its electric vehicle and property management businesses.
• In South Korea, technology company, Samsung Electronics (KS: 005930 ) has shed 1.4%.
• Meanwhile, South Korea’s Justice Ministry announced that the firm’s heir, Jay Y. Lee will be released this week on parole.
• The Nikkei 225 index is trading 0.1% higher at 27,847.31.
• The Hang Seng index has risen 0.3% to trade at 26,366.48, while the Kospi index is trading 0.6% lower at 3,240.66.

COMMODITIES

• At 06:00 SAST today, Brent spot prices fell 0.1% to trade at $69.01/bl, amid concerns over rising COVID-19 infections, following an outbreak of the disease in China.
• Yesterday, Brent spot prices fell 1.7% to settle at $69.1/bl, as concerns over the continued spread of the coronavirus infection in China and pandemic restrictions in Asia dented demand prospects, leading to worries about a slower pace of economic recovery.
• Yesterday, the Illinois North Central No.2 Yellow corn spot prices fell 0.9% to $6.10/bushel.
• At 06:00 SAST today, gold prices advanced 0.3% to trade at $1,734.63/oz. Yesterday, gold declined 1.9% to close at $1,729.94/oz, as strength in the US dollar and Treasury yields dampened demand for the safe haven yellow metal.
• Yesterday, copper declined 1.1% to close at $9,342.75/mt. Aluminium closed 1.2% lower at $2,539.77/mt.

CURRENCIES

• Yesterday, the South African rand weakened against the US dollar. The Atlanta Federal Reserve ( Fed ) Bank President, Raphael Bostic stated that he is eyeing the 4Q21 period for the start of a bond-purchase taper. Further, he added that if the job market keeps up its recent stifling pace of improvement, he is open to an even earlier move. Richmond Fed President, Tom Barkin stated that the US economy is growing rapidly and that inflation is already at a level that could satisfy for a beginning of rate hikes.
• The yield on benchmark government bonds rose on Friday. The yield on 2026 bond rose to 7.41%. Further, the yield on 2023 bond advanced to 5.02%, while that for the longer-dated 2030 issue rose to 8.94%.
• At 06:00 SAST, the US dollar is trading marginally lower against the South African rand at R14.7741, while the euro is trading marginally lower at R17.3425. At 06:00 SAST, the British pound has declined 0.1% against the South African rand to trade at R20.4521.
• Yesterday, the euro advanced against most of the major currencies. In Germany, trade surplus widened as exports jumped more than expected in June, despite supply constraints in the domestic manufacturing sector, driven by business with the US and China. In the UK, sports events and the summer holidays lead to a big increase in consumer spending in July, supported by the lifting of COVID-19 restrictions.
• At 06:00 SAST, the euro marginally advanced against the US dollar to trade at $1.1738, while it has marginally gained against the British pound to trade at GBP0.848.

ECONOMIC UPDATES

• In July, on a YoY basis, retail sales across all sectors recorded a rise of 4.7% in the UK. In the prior month, retail sales across all sectors had registered a rise of 6.7%.
• Unemployment rate registered a drop to 3.0% in Switzerland, in July. In the prior month, the seasonally adjusted unemployment rate had registered a reading of 3.1%.
• Trade surplus in Germany rose to EUR16.30bn in June, more than market expectations of a the seasonally adjusted trade surplus of EUR13.40bn. Germany had posted a trade surplus of EUR12.50bn in the previous month.
• In June, the non-seasonally adjusted current account surplus in Germany expanded to EUR22.50bn, from a current account surplus of EUR13.10bn in the previous month.
• JOLTs job openings in the US climbed unexpectedly to 10,073.00K in June. JOLTs job openings had registered a revised level of 9,483.00K in the prior month.
• Japan had posted the non-seasonally adjusted current account surplus of JPY905.10bn in June, following a current account surplus of JPY1,979.70bn in the prior month. Market anticipations were for a current account surplus of JPY779.80bn.
• Japan had posted a trade surplus of JPY648.60bn in June, compared to a trade surplus of JPY2.00bn in the prior month.
• On a YoY basis, in China, the consumer price index (CPI) climbed 1.0% in July, higher than market expectations of an advance of 0.8%. In the prior month, the CPI had registered a rise of 1.1%.
• In China, the producer price index ( PPI ) advanced 9.0% on a YoY basis in July, more than market expectations for an advance of 8.8%. In the previous month, the PPI had risen 8.8%.

CORPORATE UPDATES

SOUTH AFRICA

• Standard Bank Group Limited (JO: SBKJ ): The bank and financial services company, in its 1H21 trading statement, stated that its diluted EPS is expected to increase between 190.0% and 210.0%, compared with 236.70c recorded in the corresponding period of the previous year. Its HEPS is expected to be between 687.00c and 734.40c, compared with 473.80c recorded in the corresponding period of the previous year.
• Sasol (JO: SOLJ ) Limited: The chemical company, in its FY21 trading statement, reported that its diluted EPS is expected to be between R12.00 and R18.00, compared with a loss per share of R148.49, recorded in the corresponding period of the previous year. Its HEPS is expected to be between R39.00 and R41.00, compared with a headline loss per share of R11.50, recorded in the corresponding period of the previous year.
• AngloGold Ashanti Limited (JO: ANGJ ): The mining company, in its 1H21 results, indicated that its revenue rose to $1.97bn from $1.96bn posted in the corresponding period of the previous year. Its diluted EPS decreased 14.0% from the same period of the prior year to 86.00c.
• AngloGold shares tumble as interim earnings fall 10.0%: AngloGold Ashanti, the world’s third largest gold miner, suffered a 10.0% drop in first-half earnings, hit by the combination of lower grades, Covid-19-related disruptions, higher costs and suspension of underground mining activities at the Obuasi Mine in Ghana after a fatal accident in May.
• e.tv owner launches online streaming service: Broadcasting group eMedia Holdings has launched a video-on-demand service in partnership with mobile operator MTN (JO: MTNJ ), as it enters the competitive industry dominated by Netflix (NASDAQ: NFLX ).
• Sasol (JO: SOLJ ) back in the black on higher oil and chemical prices: Chemicals and energy group Sasol expects to return to profitability in the year to end-June, boosted by a recovery in chemicals prices and higher oil prices in rand terms.