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Market Review, Corporate Updates, Commodities & Currencies - 21.09.21

Published 2021/09/21, 11:30
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SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the red yesterday, as investor sentiment was dampened amid worries about the Chinese real-estate clampdown.
  • Real estate sector companies, Dipula Income Fund (JO:DIBJ), Arrowhead Properties and Accelerate Property Fund (JO:APFJ) plunged 11.2%, 7.7% and 6.1%, respectively.
  • Mining sector stocks, Anglo American (JO:AMSJ), African Rainbow Minerals (JO:ARIJ) and BHP Group (JO:BHPJ) declined 5.6%, 2.3% and 1.7%, respectively.
  • Banking firms, Absa Group (JO:ABGJ), FirstRand (JO:FSRJ) and Nedbank Group (JO:NEDJ) shed 3.3%, 2.5% and 1.0%, respectively.
  • On the flipside, retail sector companies, Cashbuild (JO:CSBJ) and Mr Price Group (JO:MRPJ) added 4.5% and 0.7%, respectively.
  • Gold mining stocks, Gold Fields (JO:GFIJ) and Harmony Gold Mining (JO:HARJ) advanced 4.2% and 2.2%, respectively.
  • The JSE All Share index declined 2.2% to close at 61,453.42.

UK MARKET REVIEW

  • The UK market finished weaker yesterday, dragged down by losses in insurance and mining sector stocks.
  • Insurance company, Prudential (LON:PRU) plummeted 8.4%. Meanwhile, the company announced its plan to raise GBP2.00bn through a public offer and international share placing on the Hong Kong Stock Exchange.
  • Mining sector stocks,Anglo American (LON:AAL), Antofagasta (LON:ANTO) and BHP Group (LON:BHPB) shed 4.7%, 3.8% and 1.6%, respectively.
  • On the contrary, AstraZeneca (LON:AZN) soared 6.2%, after the company reported that its new breast cancer drug reduces the risk of disease progression or death.
  • J Sainsbury (OTC:JSAIY) rose 1.6%, amid reports that the supermarket chain was protecting itself from a potential takeover along with a boutique investment bank. The FTSE 100 index declined 0.9% to close at 6,903.91.

US MARKET REVIEW

  • US markets ended lower yesterday, as investors analysed the impact of the Chinese real estate clampdown, ahead of the US Federal Reserve’s (Fed) policy meeting.
  • GameStop (NYSE:GME) plunged 6.2%, even though the company announced its plan to hire 500 employees at its new customer service center in Pembroke Pines.
  • Financial services companies, Goldman Sachs Group (NYSE:GS), JPMorgan Chase (NYSE:JPM) and Wells Fargo (NYSE:WFC) shed 3.4%, 3.0% and 1.4%, respectively.
  • Technology sector firms, Intel (NASDAQ:INTC), Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT) declined 2.4%, 2.1% and 1.9%, respectively. Insurance companies, Travelers (NYSE:TRV) and American Express (NYSE:AXP) dropped 2.3% and 2.0%, respectively.
  • The S&P 500 index fell 1.7% to settle at 4,357.73, while the DJIA index declined 1.8% to close at 33,970.47.
  • The NASDAQ index eased 2.2% to end the trading session at 14,713.90.

ASIA MARKET REVIEW

  • Asian markets are trading lower this morning. In South Korea, markets remain closed on account of a public holiday.
  • In Japan, steel manufacturing company, Nippon Steel Corporation (T:5401) has shed 4.3%.
  • On the contrary, pharmaceutical company, Daiichi Sankyo (T:4568) has surged 7.3%.
  • In Hong Kong, investment holding company, Meituan (HK:1357) has declined 2.7%.
  • On the flipside, pharmaceuticals company, CSPC Pharmaceutical Group (HK:1093) has added 3.9%.
  • On Friday, the Kospi index advanced 0.3% to close the session at 3,140.51.
  • Today, the Nikkei 225 index is trading 2.0% lower at 29,893.44.
  • The Hang Seng index has declined 0.5% to trade at 23,984.68.

COMMODITIES

  • At 06:00 SAST today, Brent spot prices rose 0.5% to trade at $74.05/bl, reversing the previous session’s losses.
  • Yesterday, Brent spot prices fell 1.5% to settle at $73.71/bl, following strength in the greenback. Meanwhile, worries about Chinese property developer, Evergrande's solvency agitated equity markets and as investors looked for the US Fed to take another step toward tapering this week. However, losses were capped due to supply shutdowns in the US Gulf of Mexico due to two recent hurricanes.
  • Yesterday, the Illinois North Central No.2 Yellow corn spot prices fell 2.4% to $4.98/bushel.
  • At 06:00 SAST today, gold prices declined 0.1% to trade at $1,762.29/oz. Yesterday, gold gained 0.6% to close at $1,764.16/oz, despite strength in the US dollar.
  • Yesterday, copper declined 2.8% to close at $9,049.15/mt. Aluminium closed 0.9% lower at $2,844.75/mt.

CURRENCIES

  • Yesterday, the South African rand weakened against the US dollar. In the US, single-family homebuilder confidence edged up in September from a three-month decline, as higher costs for building materials including softwood lumber eased.
  • The yield on benchmark government bonds rose yesterday. The yield on 2026 bond rose to 7.49%. Further, the yield on 2023 bond advanced to 5.01%, while that for the longer-dated 2030 issue rose to 9.04%.
  • At 06:00 SAST, the US dollar is trading 0.1% lower against the South African rand at R14.7645, while the euro is trading 0.1% lower at R17.3169. At 06:00 SAST, the British pound has declined 0.1% against the South African rand to trade at R20.1766.
  • Yesterday, the euro advanced against most of the major currencies. In Germany, the producer price index (PPI) surged to its highest since December 1974, in August, following an increase in the prices of intermediate goods.
  • At 06:00 SAST, the euro marginally advanced against the US dollar to trade at $1.1730, while it has marginally weakened against the British pound to trade at GBP0.8583.

ECONOMIC UPDATES

  • Trade deficit in Spain rose to EUR1.60bn in July, from a trade deficit of EUR0.98bn in the previous month.
  • In Germany, the PPI climbed 1.5% in August on a monthly basis, higher than market expectations of an advance of 0.8%. In the prior month, the PPI had climbed 1.9%.
  • In September, the housing market index advanced unexpectedly to a level of 76.00 in the US. In the previous month, the housing market index had registered a level of 75.00.
  • In August, on a monthly basis, the house price index in Canada recorded a rise of 1.0%. The house price index had recorded a rise of 1.9% in the previous month.
  • In August, on a MoM basis, the seasonally adjusted credit card spending eased 14.3% in New Zealand. In the prior month, credit card spending had recorded a revised rise of 0.2%

CORPORATE UPDATES

SOUTH AFRICA

  • Rand Merchant Investment Holdings Limited (JO:RMIJ): The financial services investment holding company, in its FY21 results, indicated that its revenue rose to R20.57bn from R17.35bn posted in the previous year. Its diluted EPS increased 84.0% from the prior year to 188.50c.
  • ArcelorMittal South Africa Limited (JO:ACLJ): The steel company announced that Ms. Suretha Van Wyk, Senior Manager Statutory Reporting, currently is part of the Finance team and reports to the CFO, will act as interim CFO until the new CFO is appointed and takes office. The appointment is effective from 1 October 2021 for a maximum period of 6 to 12 months.
  • PPC Limited (JO:PPCJ): The cement company announced that the last of the divestment conditions w.r.t the disposal of PPC Lime and PPC Aggregate Quaries Botswana (PPC AQB) was met on 17 September 2021 and the last of the condition’s precedent relating to the sale of PPC AQB was met on 15 September 2021. The net proceeds from the sale of PPC Lime and the proceeds from the sale of PPC AQB, both of which are subject to adjustment, will be applied to de-gear PPC’s South African balance sheet.
  • Caxton (JO:CATJ) & CTP Publishers & Printers Limited: The newspaper company, in its FY21 results, reported that its revenue declined 6.3% from the preceding year to R5.22bn. Its diluted EPS stood at 148.10c, compared with a loss per share of 14.80c recorded in the previous year.
  • Ascendis Health Limited (JO:ASCJ): The pharma company, in its FY21 trading statement, reported that its revenue from continuing operations is largely unchanged and expected to close within a range of R2.17bn to R2.28bn, compared with R2.20bn, in the previous year. It expects its basic loss per share to be between 205.20c and 244.00c, as compared with 195.30c, in the previous year.
  • Oil slips below $75 as dollar jumps to best level in a month: Oil dropped more than $1 a barrel to below $75, as rising risk aversion weighed on stock markets and boosted the US dollar, while more US Gulf oil output came back online in the wake of two hurricanes.

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