South Africa Market Review
- South African markets closed in the green yesterday, amid hopes of a possible deal to raise the US debt ceiling.
- Diversified miners, Anglo American (JO:AGLJ) and Exxaro Resources (JO:EXXJ) added 1.4% and 0.7%, respectively.
- Platinum miners, Anglo American Platinum (JO:AMSJ) and Impala Platinum (JO:IMPJ) Holdings rose 1.2% and 0.8%, respectively.
- On the flipside, Telkom SA SOC (JO:TKGJ) plummeted 15.6%, after the telecom company warned that annual profits would decline amid impairment charges, restructuring costs and tax charges.
- Real estate companies, Dipula Income Fund (JO:DIBJ), Fortress REIT (JO:FFAJ) and Attacq (JO:ATTJ) shed 5.0%, 3.2% and 3.1%, respectively.
- Banks, Capitec Bank Holdings (JO:CPIJ), RMB Holdings (JO:RMHJ) and Absa Group (JO:ABGJ) declined 3.8%, 2.0% and 1.0%, respectively.
- The JSE All Share index added 0.5% to close at 78,390.74.
UK Market Review
- The UK market finished weaker yesterday, led by losses in property and retail sector stocks.
- Property company, British Land Company (LON:BLND) shed 5.7%, after the company reported a drop in its portfolio value amid high interest rates.
- Retailer, JD Sports Fashion (LON:JD) declined 4.3%, after the company reported lower annual profits.
- Stock exchange company, London Stock Exchange Group (LON:LSEG) fell 2.7%, after a consortium including Blackstone (LON:BGLF) and Thomson Reuters Corporation (TSX:TRI) sold shares in the company worth around GBP2.70bn ($3.41bn).
- On the other hand, Melrose Industries (LON:MRON) advanced 4.4%, after the company raised its adjusted operating margin forecast for 2025.
- Software company, Sage Group (LON:SGE) gained 2.7%, after the company reported encouraging first-half results and raised its forecast for full-year recurring revenue growth.
- The FTSE 100 index declined 0.4% to close at 7,723.23.
US Market Review
- US markets ended higher yesterday, as a potential debt ceiling deal boosted investor confidence.
- Electric vehicle company, Tesla (NASDAQ:TSLA) gained 4.4%, after CEO Elon Musk reaffirmed deliveries of its long-delayed Cybertruck to start this year.
- Retailer, Financial services companies, JPMorgan Chase & Company (NYSE:JPM), Goldman Sachs Group (NYSE:GS) and American Express (NYSE:AXP) rose 3.1%, 2.9% and 2.5%, respectively.
- Target Corporation (NYSE:TGT) advanced 2.6%, after the company posted upbeat fiscal first-quarter profit and sales.
- Departmental store company, TJX Companies (NYSE:TJX) added 0.9%, after the company reported better-than-expected profit in 1Q23.
- The S&P 500 index gained 1.2% to settle at 4,158.77, while the DJIA index advanced 1.2% to close at 33,420.77.
- The NASDAQ index added 1.3% to end the trading session at 12,500.57.
Asia Market Review
- Asian markets are trading higher this morning, tracking overnight gains on Wall Street.
- In Japan, consumer electronics company, Sony Group (NYSE:SONY) has advanced 5.9%.
- On the flipside, paper and pulp company, Nippon Paper Industries (TYO:3863) has declined 3.0%.
- In Hong Kong, consumer electronics company, Xiaomi Corporation (HK:1810) has gained 2.8%.
- On the other hand, real estate company, Longfor (HK:0960) Group Holdings has shed 4.5%.
- In South Korea, steel pipes and tubes company, Histeel (KS:071090) has surged 12.1%.
- On the contrary, chemicals company, ISU Chemical has shed 8.5%. The Nikkei 225 index is trading 1.5% higher at 30,533.64.
- The Hang Seng index has advanced 1.2% to trade at 19,802.86, while the Kospi index is trading 0.6% higher at 2,508.66.
Commodities
- At 05:30 SAST today, Brent prices fell 0.1% to trade at $76.86/bl.
- Yesterday, Brent prices rose 2.7% to settle at $76.96/bl, despite a surge in oil inventories. The US Energy Information Administration (EIA) reported that the US crude inventories advanced by 5.04mn bls in the week ended 12 May 2023.
- At 05:30 SAST today, gold prices advanced 0% to trade at $1,982.07/oz. Yesterday, gold declined 0.3% to close at $1,981.72/oz, as hawkish stance by the US Federal Reserve (Fed) strengthened dollar thereby denting demand for the safe haven yellow metal.
- Yesterday, copper rose 1.2% to close at $8,175.35/mt. Aluminium closed 2% higher at $2,310.00/mt.
Currencies
- Yesterday, the South African rand weakened against the US dollar. In the US, the number of MBA mortgage applications dropped in the week ended 12 May 2023. Moreover, building permits unexpectedly dropped in April. Meanwhile, housing starts rose more than expected in April.
- The yield on benchmark government bonds rose yesterday. The yield on 2026 bond rose to 9.79%. Further, the yield on the longer-dated 2030 issue rose to 11.06%.
- At 05:30 SAST, the US dollar is trading 0.1% higher against the South African rand at R19.2701, while the euro is trading 0.2% higher at R20.8960. At 05:30 SAST, the British pound has marginally gained against the South African rand to trade at R24.0595.
- Yesterday, the euro declined against most of the major currencies. In the eurozone, consumer price inflation slightly eased in April.
- At 05:30 SAST, the euro marginally advanced against the US dollar to trade at $1.0844, while it has marginally gained against the British pound to trade at GBP0.8685.
Economic Updates
- In South Africa, retail sales slid 1.6% on a MoM basis in March, more than market expectations and compared to a revised drop of 0.7% recorded in the prior month.
- In France, the ILO unemployment rate rose to 7.1% in 1Q23, compared to a revised 7.1% recorded in the prior quarter.
- In Italy, trade surplus expanded to EUR7.54bn in March, compared to a revised surplus of EUR2.10bn in the prior month. Markets were expecting a trade deficit of EUR2.63bn.
- In the eurozone, the final consumer price index (CPI) advanced 0.6% on a MoM basis in April, less than market expectations for a rise of 0.7%. In the previous month, the CPI had climbed 0.9%.
- In the US, the MBA mortgage applications dropped 5.7% on a weekly basis in the week ended 12 May 2023. The number of mortgage applications had advanced 6.3% in the prior week.
- In the US, housing starts recorded a rise of 2.2% on a MoM basis in April, more than market expectations for an advance of 1.9%. Housing starts had recorded a revised drop of 4.5% in the previous month.
- In the US, building permits unexpectedly dropped 1.5% on a MoM basis in April, compared to a revised drop of 3.0% recorded in the previous month.
- In Japan, merchandise trade deficit narrowed to JPY432.40bn in April, compared to a revised deficit of JPY755.10bn reported in the prior month
- In Japan, industrial production fell 0.6% on a YoY basis in March. Industrial production had fallen 0.5% in the prior month.
- In Australia, the unemployment rate unexpectedly climbed to 3.7% in April, compared to 3.5% in the prior month.
Corporate Updates
South Africa
- Telkom SA SOC Limited (JO:TKGJ): The telecommunications company, in its trading update for the year ended 31 March 2023, stated that it expects normalised basic EPS to be between 53.70c and 161.00c, as compared with 536.60c recorded in the previous year. Also, it expects normalised HEPS to be between 115.50c and 230.10c, as compared with 575.50c recorded in the previous year.
- Tsogo Sun Holdings Limited (JO:TSGJ): The hotels company, in its annual trading updated, indicated that it expected its EPS to be between 161.00c and 171.00c, as compared with 134.00c reported in the prior year. Further, HEPS is expected to be between 147.00c and 156.00c as compared with the 110.00c recorded in the previous year. Moreover, the company intends to release its results for the year ended 31 March 2023 on 25 May 2023.
- Dipula Income Fund Limited (JO:DIBJ): The real estate investment trust company, in its 1H23 results, indicated that its revenue rose to R691.51mn from R677.43mn posted in the corresponding period of the previous year. Its diluted EPS fell 21.6% from the same period of the prior year to 28.13c.
- Oil flat amid global economic jitters and US stockpile boost: Oil prices were little changed as traders remained cautious after a surprise rise in US crude inventories stoked demand concerns on the heels of weaker-than-expected economic data from the US and China.