SOUTH AFRICA MARKET REVIEW
- South African markets closed in the red yesterday, as the release of weaker than expected economic data from China and the continued surge in the coronavirus infections dampened investor morale.
- Mining sector companies, Anglo American (JO:AMSJ), BHP Group (JO:BHPJ) and African Rainbow Minerals (JO:ARIJ) shed 1.8%, 1.5% and 0.9%, respectively.
- Logistics and industrial companies, Kap Industrial Holdings (JO:KAPJ) and Super Group dropped 2.0% and 1.0%, respectively.
- On the flipside, banking companies, FirstRand (JO:FSRJ), Capitec Bank (JO:CPIJ) Holdings and Absa (JO:ABGJ) Group rose 3.5%, 3.4% and 1.6%, respectively.
- Retail sector stocks, Clicks Group (JO:CLSJ), Lewis Group (JO:LEWJ) and Cashbuild (JO:CSBJ) advanced 2.0%, 1.8% and 0.9%, respectively.
- The JSE All Share index declined 0.8% to close at 68,824.70.
- The UK market finished weaker yesterday, pulled down by losses in energy and mining sector stocks.
- Oil companies, BP (LON:BP) and Royal Dutch Shell (LON:RDSa) shed 2.4% and 2.3%, respectively.
- Miner, BHP Group (JO:BHPJ) declined 1.8%, after the company confirmed about a potential merger of its petroleum business with Australia's Woodside Petroleum (ASX:WPL).
- Peers, Anglo American and Antofagasta (LON:ANTO) dropped 1.9% and 1.0%, respectively.
- Travel and leisure stocks, International Consolidated Airlines Group (LON:ICAG) SA and InterContinental Hotels Group (LON:IHG) eased 0.7% and 0.5%, respectively.
- On the flipside, pharmaceutical companies, AstraZeneca (LON:AZN) and GlaxoSmithKline (LON:GSK) added 0.6% and 0.5%, respectively.
- The FTSE 100 index declined 0.9% to close at 7,153.98.
US MARKET REVIEW
- US markets ended mostly higher yesterday, despite geopolitical tensions in Afghanistan and weaker than expected economic data from China.
- United Health Group and Travelers (NYSE:TRV) company rose 1.8% and 0.9%, respectively.
- Pfizer (NYSE:PFE) added 0.9%, after the company along with its partner, BioNTech, in support of permission for a third booster dose of their COVID-19 vaccine, submitted initial data to the US Food and Drug Administration.
- On the flipside, Tesla (NASDAQ:TSLA) shed 4.3%, following reports that the US government has issued an examination into the company’s Autopilot system, after reports of multiple crashes into first-responder vehicles.
- The S&P 500 index rose 0.3% to settle at 4,479.71, while the DJIA index advanced 0.3% to close at 35,625.40.
- The NASDAQ index eased 0.2% to end the trading session at 14,793.76.
ASIA MARKET REVIEW
- Asian markets are trading lower this morning, as the release of weaker than expected Chinese economic data dampened investor sentiment.
- In Japan, chemicals company, Nissan Chemical (T:4021) has added 2.6%.
- On the contrary, electronics company, Casio Computer (T:6952)has shed 2.8%.
- In Hong Kong, pharmaceuticals company, WuXi Biologics (HK:2269) has dropped 3.1%.
- On the flipside, CSPC Pharmaceuticals (HK:1093) has surged 5.2%.
- In South Korea, automobile manufacturer, SsangYong Motor (KS:003620) has plunged 19.2%.
- On the other hand, technology company, LG Electronics (KS:066570) has gained 0.3%. The Nikkei 225 index is trading 0.1% lower at 27,506.32.
- The Hang Seng index is trading 0.6% weaker at 26,014.15, while the Kospi index is trading 0.8% lower at 3,145.61.
COMMODITIES
- At 06:00 SAST today, Brent spot prices marginally fell to trade at $69.57/bl, extending the previous session’s losses.
- Yesterday, Brent spot prices fell 0.8% to settle at $69.60/bl, amid weaker than expected Chinese economic data releases and on the back of news that OPEC+ believe that the markets do not need extra oil than they plan to release in the coming months. Meanwhile, the Biden administration confronted Judge Terry Doughty of the US District Court for the Western District of Louisiana’s decision in June to block the Interior Department's break on oil and gas leasing on public lands and waters. The Interior Department indicated that it will continue with new leases during the appeals process consistent with the district court’s injunction during the appeal and will use discretion provided under the law to conduct leasing in a manner that takes into account the program’s many deficiencies.
- Yesterday, the Illinois North Central No.2 Yellow corn spot prices fell 2.1% to $6.05/bushel.
- At 06:00 SAST today, gold prices marginally declined to trade at $1,786.58/oz. Yesterday, gold gained 0.4% to close at $1,787.45/oz, amid weaker Chinese economic data.
- Yesterday, copper declined 1.3% to close at $9,419.50/mt. Aluminium closed 0.4% higher at $2,619.25/mt.
CURRENCIES
- Yesterday, the South African rand weakened against the US dollar, following the release of weaker Chinese economic data. In the US, the NY empire state manufacturing business activity declined more than expected in August after growing at a record-setting pace in the month before.
- The yield on benchmark government bonds mostly rose yesterday. The yield on 2026 bond fell to 7.36%. Further, the yield on 2023 bond advanced to 5.04%, while that for the longer-dated 2030 issue rose to 8.89%.
- At 06:00 SAST, the US dollar is trading 0.2% higher against the South African rand at R14.8731, while the euro is trading 0.1% higher at R17.5072. At 06:00 SAST, the British pound has gained 0.1% against the South African rand to trade at R20.5583.
- Yesterday, the euro advanced against most of the major currencies. The European Central Bank (ECB) is likely to announce its long-awaited plans to reduce its pandemic-related asset purchases in the next quarter.
- At 06:00 SAST, the euro slipped 0.1% against the US dollar to trade at $1.1771, while it has gained 0.1% against the British pound to trade at GBP0.8516.
ECONOMIC UPDATES
- Compared with a level of 43.00 in the previous month, the NY Empire State manufacturing index fell to a level of 18.30 in August, in the US. Markets were expecting the NY Empire State manufacturing index to fall to a level of 30.00.
- In June, manufacturing sales climbed 2.1% in Canada on a monthly basis, more than market expectations for an advance of 1.0%. In the prior month, manufacturing sales had fallen by a revised 0.3%.
- On a monthly basis, wholesale sales eased 0.8% in June, in Canada. In the previous month, wholesale sales had climbed 0.5%.
- On a monthly basis, existing home sales in Canada slid 3.5% in July. Existing home sales had fallen 8.4% in the previous month.
- On a monthly basis, capacity utilization climbed 6.2% in Japan, in June. In the prior month, capacity utilization had dropped 6.8%.
CORPORATE UPDATES
SOUTH AFRICA
- Sasol (JO:SOLJ) Limited: The chemical company, in its FY21 results, stated that its revenue increased to R201.91bn from R190.37bn posted in the corresponding period of the previous year. Its diluted EPS stood at R14.39, compared with a loss per share of R148.49, in the corresponding previous year.
- Northam (JO:NHMJ) Platinum Limited: The mining company, in its FY21 trading update, indicated that it expects its basic EPS to be between R26.51 and R27.13, significantly higher compared with R6.20, recorded in the corresponding previous year. It expects its HEPS to be between R26.57 and R27.19, higher compared with R6.20, in the corresponding previous year.
- Distell Group Holdings Limited (JO:DGHJ): The brewing and beverage company, in its FY21 trading update, revealed that it expects its EPS to be between 873.50c and 887.70c, higher as compared with 142.20c recorded in the previous year. It expects its HEPS to be between 757.80c and 781.40c, higher as compared with 235.30c, in the previous year.
- Truworths International Limited (JO:TRUJ): The retail company, in its FY21 trading statement, reported that it expects its HEPS to be between 503.00c and 523.00c, higher as compared with 410.00c, recorded in the corresponding previous year. It expects its EPS to be between 463.00c and 483.00c, an improvement as compared with a loss per share of 133.00c, in the corresponding previous year.
- Impala Platinum Holdings Limited (JO:IMPJ): The platinum mining company, in its FY21 trading statement, indicated that it expects its basic EPS to be between R59.28 and R60.56, 187.0% to 193.0% higher compared with the corresponding previous year. It expects its HEPS to be between R45.64 and R46.91, 120.0% to 126.0% higher compared with the corresponding previous year.
- Cashbuild Limited (JO:CSBJ): The retail company, in its FY21 trading statement, revealed that it expects its EPS to be between R28.83 and R30.01, compared with R11.77, in the corresponding previous year. It expects its HEPS to be between R27.89 and R29.02, as compared with R11.38, in the corresponding previous year. Further in its update on the impact of civil unrest, the company revealed that the violent protests and looting of mid-July negatively impacted the firm, with a total of 36 stores being damaged and looted.
- BHP in talks with Woodside Petroleum to exit oil and gas: BHP Group is in talks over a potential merger of its oil and gas unit with Woodside Petroleum to accelerate a retreat from fossil fuels amid increasing pressure to curb emissions.
- Truworths says about half of riot-hit stores have reopened: Truworths, one of SA’s biggest fashion retailers, says it has reopened just over half of the 57 stores that were hit by civil unrest in July, with the group still counting the costs of riots that affected about 7% of its local store base.
- Implats expects full-year profit to double due to higher metals prices: Impala Platinum (Implats), the third-largest source of platinum group metals (PGMs) in SA, expects its profit to more than double in the year to end-June, thanks to higher commodity prices.