Market Review, Corporate Updates, Commodities & Currencies - 12.10.21

  • Market Overview

South Africa Market Review

  • South African markets closed in the green yesterday, buoyed by gains in cement and mining sector companies.
  • Cement company, PPC (JO: PPCJ ) soared 9.0%. Mining companies, African Rainbow Minerals (JO: ARIJ ), Anglo American (JO: AMSJ ) and BHP Group (JO: BHPJ ) advanced 4.9%, 4.5% and 3.1%, respectively.
  • Retail sector companies, Cashbuild (JO: CSBJ ), Cie Financiere Richemont SA (JO: CFRJ ) and Clicks Group (JO: CLSJ ) rose 2.9%, 1.6% and 1.1%, respectively.
  • Real estate property sector companies, Accelerate Property Fund (JO: APFJ ), Fortress REIT (JO: FFAJ ) and Dipula Income Fund (JO: DIBJ ) added 2.1%, 2.0% and 0.6%, respectively.
  • On the flipside, industrial companies, KAP Industrial Holdings (JO: KAPJ ) and Grindrod (JO: GNDJ ) shed 1.7% and 1.6%, respectively.
  • The JSE All Share index advanced 1.3% to close at 66,101.04.

UK Market Review

  • The UK market finished firmer yesterday, buoyed by gains in mining and banking sector stocks.
  • Mining companies, Anglo American (LON: AAL ), Antofagasta (LON: ANTO ) and Rio Tinto (LON: RIO ) surged 5.2%, 4.2% and 3.5%, respectively.
  • Banking companies, HSBC Holdings (LON: HSBA ), Lloyds Banking Group (LON: LLOY ) and NatWest Group (LON: NWG ) gained 2.7%, 2.3% and 2.1%, respectively.
  • Oil and energy sector companies, BP (LON: BP ) and Royal Dutch Shell (LON: RDSa ) added 1.9% and 1.7%, respectively.
  • Pharmaceutical company, AstraZeneca (LON: AZN ) rose 1.3%, after reports indicated that its antibody cocktail to battle Covid-19 had attained a statistically significant reduction in hospitalisation or death in a Phase 3 trial.
  • On the flipside, retail companies, Just Eat Takeway.com (LON: JETJ ) and JD Sports Fashion (LON: JD ) shed 3.7% and 1.5%, respectively.
  • The FTSE 100 index advanced 0.7% to close at 7,146.85.

US Market Review

  • US markets ended lower yesterday, as investors awaited for domestic inflation data due later this week.
  • Southwest Airlines (NYSE: LUV ) shed 4.2%, after the airliner cancelled hundreds of flights over the weekend, amid adverse weather conditions and air-traffic control issues.
  • Banking companies, JPMorgan Chase (NYSE: JPM ) and Goldman Sachs Group (NYSE: GS ) declined 2.1% and 1.9%, respectively.
  • Insurance companies, American Express (NYSE: AXP ) and UnitedHealth Group (NYSE: UNH ) shed 1.0% and 0.9%, respectively.
  • Technology companies, Intel (NASDAQ: INTC ) and Microsoft (NASDAQ: MSFT ) eased 0.7% and 0.2%, respectively.
  • The S&P 500 index fell 0.7% to settle at 4,361.19, while the DJIA index declined 0.7% to close at 34,496.06.
  • The NASDAQ index eased 0.6% to end the trading session at 14,486.20.

Asia Market Review

  • Asian markets are trading lower this morning, as investors react to soaring global crude oil prices.
  • In Japan, market heavyweight, SoftBank Group (T: 9984 ) has shed 2.6%. On the contrary, transport company, Kawasaki Kisen Kaisha (T: 9107 ) has added 1.7%.
  • In Hong Kong, pharmaceutical company, Sino Biopharmaceutical (HK: 1177 ) has shed 1.5%.
  • On the flipside, automobile company, Geely Automobile Holdings (HK: 0175 ) has rose 3.3%.
  • In South Korea, technology company, Samsung Electronics (KS: 005930 ) has shed 2.9%.
  • Meanwhile, the company announced that it expects a significant surge in its 3Q21 earnings, despite ongoing global supply chain challenges.
  • On the other hand, peer, LG Electronics (KS: 066570 ) has added 0.8%.
  • The Nikkei 225 index is trading 0.9% lower at 28,249.47.
  • The Hang Seng index has declined 1.1% to trade at 25,039.44, while the Kospi index is trading 1.4% lower at 2,914.05.

Commodities

  • At 06:00 SAST today, Brent spot prices fell 0.2% to trade at $83.76/bl, reversing the previous session’s gains.
  • Yesterday, Brent spot prices rose 1.1% to settle at $83.90/bl, buoyed by rebounding global oil demand that has contributed to power and gas shortages in key economies like China.
  • Yesterday, the Illinois North Central No.2 Yellow corn spot prices remained steady at $4.93/bushel.
  • At 06:00 SAST today, gold prices advanced 0.2% to trade at $1,758.49/oz. Yesterday, gold declined 0.2% to close at $1,754.15/oz, dragged down by a surge in the greenback, amid expectations that the US Federal Reserve (Fed) would taper its stimulus measures, thus dampening demand for the safe haven yellow metal.
  • Yesterday, copper rose 2.3% to close at $9,604.75/mt. Aluminium closed 3.3% higher at $3,044.50/mt.

Currencies

  • Yesterday, the South African rand weakened against the US dollar. In South Africa, business confidence dropped to its lowest in a year in September, as companies deal with the after-effects of the July civil unrest and as concerns about energy and water supply, along with a surge in fuel prices, weigh on firms.
  • The yield on benchmark government bonds rose yesterday. The yield on 2026 bond rose to 7.95%. Further, the yield on 2023 bond advanced to 5.39%, while that for the longer-dated 2030 issue rose to 9.55%.
  • At 06:00 SAST, the US dollar is marginally trading higher against the South African rand at R15.0727, while the euro is trading 0.1% higher at R17.4213. At 06:00 SAST, the British euro has gained 0.1% against the South African rand to trade at R20.4991.
  • Yesterday, the euro declined against most of the major currencies. In the eurozone, the European Central Bank ECB Chief Economist, Philip Lane stated that the current stretch of inflation is not a sign for a monetary policy action. Meanwhile, in the UK, consumers increased their spending in September at the slowest pace since January, as they are concerned about a shortage of fuel.
  • At 06:00 SAST, the euro advanced 0.1% against the US dollar to trade at $1.1559, while it has marginally gained against the British pound to trade at GBP0.8498.

Economic Updates

  • The business confidence index in South Africa registered a drop to 91.00 in September. The business confidence index had recorded a revised level of 91.90 in the previous month.
  • Retail sales across all sectors in the UK registered a rise of 0.6% on an annual basis, in September. Retail sales across all sectors had climbed 1.5% in the prior month.
  • In August, the seasonally adjusted industrial production dropped 0.2% in Italy on a monthly basis, compared to a revised rise of 1.0% in the prior month. Market anticipations were for industrial production to drop 0.3%.
  • The preliminary machine tool orders rose 71.9% in Japan on an annual basis, in September. Machine tool orders had recorded a rise of 85.2% in the previous month.
  • In September, the business conditions index recorded a drop to 5.00 in Australia. In the prior month, the business conditions index had registered a level of 14.00.

Corporate Updates

South Africa

  • RFG Holdings Limited (JO: RFGJ ): The food company announced that it has concluded an agreement relating to the acquisition by RFG Foods of the frozen foods business of Pioneer Foods Wellingtons Proprietary Limited, which acquisition was subject to the fulfilment or waiver of certain conditions precedent. The company’s board of directors advised that the Competition Commission has approved the acquisition subject to public interest conditions which are acceptable to both parties. As all the conditions precedent have now been fulfilled, and the acquisition has become unconditional. The effective date of the acquisition is 1 December 2021.
  • Oil at three-year highs as energy crisis shows no sign of easing: Oil prices rose 2%, extending multiweek gains as an energy crisis gripping major economies shows no sign of easing amid a pickup in economic activity and restrained supplies from major producers.

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