South Africa Market Review
- South African markets closed in the red yesterday, amid continued load shedding following generation capacity scarcities and after Eskom announced stage-four load shedding, withdrawing 4,000 megawatts from the grid.
- Real estate companies, Delta Property Fund (JO: DLTJ ), Arrowhead Properties and Capital & Counties Properties (JO: CCOJ ) plummeted 6.8%, 6.0% and 5.7%, respectively.
- Platinum mining companies, Impala Platinum Holdings (JO: IMPJ ), Royal Bafokeng Platinum (JO: RBPCBe ) and Anglo American Platinum (JO: AMSJ ) shed 4.1%, 2.2% and 1.8%, respectively.
- Gold mining companies, Harmony Gold Mining (JO: HARJ ) and Sibanye Stillwater Limited (JO: SSWJ ) declined 1.1%, each.
- On the flipside, retail companies, Massmart Holdings (JO: MSMJ ), Cashbuild (JO: CSBJ ) and Clicks Group (JO: CLSJ ) advanced 3.1%, 2.1% and 1.5%, respectively.
- The JSE All Share index declined 0.1% to close at 67,983.20.
- The UK market finished weaker yesterday, dragged down by broad based losses in banking sector stocks.
- Lloyds Banking Group (LON: LLOY ), Barclays (LON: BARC ) and HSBC Holdings (LON: HSBA ) shed 1.6%, 1.3% and 1.0%, respectively.
- DCC declined 3.9%, even though the company reported a surge in its 1H22 profits.
- Homebuilding company, Persimmon (LON: PSN ) dropped 2.6%, even though the company announced that it was on path to increase its new home completions by 10.0% this year and that it targeted a return to pre-pandemic trading levels by 2022.
- On the contrary, Associated British Foods (LON: ABF ) surged 8.0%, after the company announced a FY21 special dividend following recovery in its balance sheet from the impact of the Covid-19 pandemic.
- The FTSE 100 index declined 0.4% to close at 7,274.04.
US Market Review
- US markets ended lower yesterday, on account of broad based losses in financial services sector stocks.
- Visa (NYSE: V ), JPMorgan Chase (NYSE: JPM ) and Goldman Sachs Group (NYSE: GS ) shed 3.2%, 0.8% and 0.7%, respectively.
- Electric carmaker, Tesla (NASDAQ: TSLA ) plunged 12.0%, after its founder, Elon Musk over the weekend proposed selling 10.0% of his shares.
- The results were 58.0% in favor of selling and 42.0% against, suggesting he will sell the shares.
- On the flipside. General Electric (NYSE: GE ) gained 2.7%, after the industrial conglomerate announced its plans to split into three publicly traded companies.
- The S&P 500 index fell 0.3% to settle at 4,685.25, while the DJIA index declined 0.3% to close at 36,319.98.
- The NASDAQ index eased 0.6% to end the trading session at 15,886.54.
Asia Market Review
- Asian markets are trading lower this morning, tracking overnight losses on Wall Street.
- In Japan, metals manufacturing company, Pacific Metals (T: 5541 ) has shed 4.3%.
- On the contrary, transport company, Kawasaki Kisen Kaisha (T: 9107 ) has advanced 3.6%.
- In Hong Kong, glass manufacturing company, Xinyi Glass Holdings (HK: 0868 ) has declined 2.4%.
- On the flipside, electronics company, Techtronic Industries (HK: 0669 ) has gained 2.8%.
- In South Korea, electronics company, LG Electronics (KS: 066570 ) has dropped 2.0%.
- On the contrary, cement company, Hanil Cement (KS: 003300 ) has soared 6.8%.
- The Nikkei 225 index is trading 0.5% lower at 29,149.10.
- The Hang Seng index has declined 1.2% to trade at 24,524.31, while the Kospi index is trading 0.9% lower at 2,935.57.
- At 06:00 SAST today, Brent spot prices fell 0.2% to trade at $85.57/bl, reversing previous session’s gains.
- Yesterday, Brent spot prices rose 2.0% to settle at $85.70/bl, after the US eased off restrictions and following a rebound in oil demand along with tighter supplies. The US Energy Information Administration (EIA), in its Short Term Energy Outlook (STEO) report, projected that average prices for retail regular grade gasoline will decline from $3.32 per gallon in November to $3.16 in December and $3.00 in 1Q22. Meanwhile, the American Petroleum Institute (API) reported that crude oil inventories declined by 2.50mnbls for the week ended 5 November.
- Yesterday, the Illinois North Central No.2 Yellow corn spot prices rose 0.6% to $5.37/bushel.
- At 06:00 SAST today, gold prices declined 0.2% to trade at $1,827.39/oz. Yesterday, gold gained 0.4% to close at $1,831.92/oz, as a weaker greenback gave a boost to the safe haven yellow metal.
- Yesterday, copper declined 1.4% to close at $9,765.50/mt. Aluminium closed 1.8% lower at $2,537.00/mt.
- Yesterday, the South African rand weakened against the US dollar. In the US, the producer price index (PPI) accelerated in October, buoyed by rising costs for gasoline and motor vehicle trade, indicating that higher inflation is likely to persist for a while, amid tight global supply chains on account of the COVID-19 pandemic. Meanwhile, the US Federal Reserve Chairman, Jerome Powell stated that the central bank looks at a wide range of indicators to measure labour market disparities.
- The yield on benchmark government bonds fell yesterday. The yield on 2026 bond fell to 7.87%. Further, the yield on 2023 bond declined to 5.30%, while that for the longer-dated 2030 issue fell to 9.26%.
- At 06:00 SAST, the US dollar is trading 0.3% higher against the South African rand at R15.0766, while the euro is trading 0.3% higher at R17.4664. At 06:00 SAST, the British pound has gained 0.3% against the South African rand to trade at R20.4389.
- Yesterday, the euro advanced against most of the major currencies. In Germany, trade surplus narrowed in September, as supply constrains lead to a shortage of raw materials and components. Meanwhile, investor sentiment advanced in November, amid expectations of a drop in prices at the beginning of 2022. Meanwhile, adjusted current account surplus in Germany expanded in September. In the eurozone, economic sentiment boosted more than expected in November. In the eurozone, the European Central Bank (ECB) board member, Isabel Schnabel indicated that the ECB’s policy cannot ignore a surge in property prices that has led to a potentially dangerous overvaluation.
- At 06:00 SAST, the euro slipped 0.1% against the US dollar to trade at $1.1584, while it has weakened 0.1% against the British pound to trade at GBP0.8544.
- Current account deficit in France expanded to EUR2.70bn in September. France had posted a current account deficit of EUR1.30bn in the prior month.
- In September, trade deficit in France rose to EUR6.80bn, compared with a trade deficit of EUR6.70bn in the previous month. Markets were anticipating the nation to post a trade deficit of EUR7.08bn.
- Germany has reported the seasonally adjusted trade surplus of EUR16.20bn in September, following a trade surplus of EUR10.70bn in the prior month.
- In September, the non-seasonally adjusted current account surplus in Germany expanded to EUR19.60bn, following a current account surplus of EUR15.40bn in the previous month.
- The economic sentiment index in Germany advanced unexpectedly to 31.70 in November. In the prior month, the economic sentiment index had recorded a level of 22.30.
- The current situation index in Germany registered a drop to 12.50 in November, higher than market expectations of a fall to a level of 18.00. In the previous month, the current situation index had recorded a level of 21.60.
- The economic sentiment index in the eurozone registered a rise to 25.90 in November, compared with a level of 21.00 in the prior month.
- The small business optimism index recorded a drop to 98.20 in the US, in October. The small business optimism index had recorded a reading of 99.10 in the previous month.
- In the US, producer price advanced 0.6% in October on a MoM basis, in line with market expectations of a rise of 0.6%. In the previous month, producer price had risen 0.5%.
- In the US, producer price (ex-food & energy) advanced 0.4% in October on a MoM basis, lower than market expectations of a rise of 0.5%. In the prior month, producer price (ex-food & energy) had registered a rise of 0.2%.
- On a YoY basis, in China, the consumer price index ( CPI ) recorded a rise of 1.5% in October, compared with an advance of 0.7% in the prior month. Markets were expecting the CPI to climb 1.4%.
- In October, the PPI in China rose 13.5% on a YoY basis, more than market expectations for a rise of 12.4%. In the previous month, the PPI had registered a rise of 10.7%.
- Northam Platinum Holdings Limited (JO: NHMJ ): The platinum mining company announced that a sale of shares agreement was entered into between Northam Holdings, Royal Bafokeng Holdings Proprietary Limited and Royal Bafokeng Investment Holding Company Proprietary Limited in terms of which, inter alia, Northam Holdings and/or its subsidiaries may acquire up to 33.3% of all the RBPlat ordinary shares in issue, excluding treasury shares, from RBIH. RBIH is a wholly owned subsidiary of RBH. It will acquire 93,930,378 RBPlat shares from RBIH, amounting to 32.8% of the RBPlat Net Shares, for an aggregate purchase consideration of R17.00bn, representing R180.50 per RBPlat share. The purchase consideration will be settled through a combination of the issue of ordinary shares in the share capital of Northam Holdings and cash. The parties have entered into a put and call option arrangement in terms of which Northam may acquire a further 0.5% of the RBPlat Net Shares for a purchase consideration of R135.00 per RBPlat Share. Should the RBIH Put and Call Option be exercised in full, Northam will acquire 33.3% of the RBPlat Net Shares in aggregate.
- Life Healthcare Group Holdings Limited (JO: LHCJ ): The healthcare company, in its FY21 trading statement, revealed that group revenue has increased by between 11.0% and 13.0%, as compared with that in the previous year. It expects its EPS to be between 111.00c and 116.00c, higher as compared with the 48.50c recorded in the prior year.
- Transaction Capital Limited (JO: TCPJ ): The financial services company, in its FY21 trading statement, stated that it expects its basic EPS to be between 336.30c and 337.60c, as compared with the 25.30c posted in the previous year. It expects its HEPS to be between 144.90c and 146.50c, as compared with 33.10c recorded in the prior year.
- Net 1 UEPS Technologies Inc (JO: NT1J ): The financial technology company, in its 1Q22 results, indicated that its revenue fell to $34.50mn from $35.14mn posted in the corresponding period of the previous year.
- Telkom SA SOC Limited (JO: TKGJ ): The telecom company, in its 1H22 results, reported that its revenue declined 0.5% from the same period of the preceding year to R21.29bn. Its diluted EPS stood at 269.60c, compared with 216.80c recorded in the corresponding period of the previous year.
- Sasol (JO: SOLJ ) lacks access to gas for emissions reduction plan, study says: Sasol, SA’s second-biggest producer of greenhouse gases, risks missing its climate targets if the energy-to-chemicals group can’t secure the alternatives needed to replace coal, according to a study.
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