SOUTH AFRICA MARKET REVIEW
- South African markets closed in the green yesterday, after positive comments from China Evergrande Group (HK:3333), Hui Ka-yan boosted investor morale.
- Mining sector companies, Merafe Resources, BHP Group (JO:BHPJ) and Anglo American (JO:AMSJ) surged 9.3%, 1.5% and 1.1%, respectively.
- Retail firms, Cie Financiere Richemont SA (JO:CFRJ), Clicks Group (JO:CLSJ) and Lewis Group (JO:LEWJ) advanced 3.6%, 3.4% and 1.2%, respectively.
- Real estate sector companies, Attacq (JO:ATTJ), Capital & Counties Properties (JO:CCOJ) and Arrowhead Properties rose 2.7%, 2.2% and 0.8%, respectively.
- However, peer, Accelerate Property Fund (JO:APFJ) declined 4.6%. Tobacco company, British American Tobacco (JO:SNHJ) added 1.2%.
- Also, banking firms, FirstRand (JO:FSRJ), Absa Group (JO:ABGJ) and Capitec Bank Holdings (JO:CPIJ) advanced 1.1%, 0.9% and 0.7%, respectively.
- The JSE All Share index advanced 1.5% to close at 62,362.18.
- The UK market finished firmer yesterday, buoyed by gains in energy sector stocks.
- Royal Dutch Shell (LON:RDSa) and BP (LON:BP) added 3.6% and 1.7%, respectively.
- Pershing Square (NYSE:SQ) Holdings soared 5.0%, after a successful market debut of its Amsterdam stock for Universal Music Group.
- The company has a 10.0% stake in it. On the flipside, retailer, Kingfisher (LON:KGF) shed 4.9%, after reporting a fall in its 3Q21 like-for-like sales.
- However, it reported a surge in its interim profits and revenue along with a GBP300.00mn share buyback.
- Compass Group (LON:CPG) dropped 2.2%, despite indicating that its 4Q21 results are ahead of its guidance, as customers returned to venues and as schools and colleges reopened.
- The FTSE 100 index advanced 1.1% to close at 6,980.98.
US MARKET REVIEW
- US markets ended mostly lower yesterday, extending the previous session’s losses.
- Activision Blizzard (NASDAQ:ATVI) shed 4.1%, even though the company stated its progress at resolving workplace complaints, as it assists with a Securities and Exchange Commission investigation into disclosures on employment matters.
- Banking companies, Goldman Sachs Group (NYSE:GS) and Brookline Bancorp (NASDAQ:BRKL) shed 0.6%, each. Technology sector companies, Intel (NASDAQ:INTC) and salesforce.com Inc (NYSE:CRM) declined 0.2% and 0.1%, respectively.
- On the contrary, insurance companies, American Express (NYSE:AXP) and Travelers (NYSE:TRV) added 1.7% and 0.2%, respectively.
- Consumer goods company, Procter and Gamble (NYSE:PG) rose 0.2%.
- The S&P 500 index fell 0.1% to settle at 4,354.19, while the DJIA index declined 0.1% to close at 33,919.84.
- The NASDAQ index climbed 0.2% to end the trading session at 14,746.40.
ASIA MARKET REVIEW
- Asian markets are trading lower this morning, tracking overnight losses on Wall Street and as investors observe the ongoing Evergrande crisis.
- In Hong Kong and South Korea markets are closed on account of a public holiday.
- In Japan, integrated trading and investment business conglomerate, Marubeni Corporation (T:8002) has shed 3.5%.
- On the contrary, market heavyweight, SoftBank Group (T:9984) has advanced 2.1%. Moreover, technology company, Panasonic (T:6752) has added 0.5%.
- Yesterday, the Hang Seng index advanced 0.5% to close at 24,221.54.
- Meanwhile, on Friday, the Kospi index ended 0.3% higher to end the session at 3,140.51.
- Today, the Nikkei 225 index is trading 0.6% lower at 29,664.00.
COMMODITIES
- At 06:00 SAST today, Brent spot prices rose 0.2% to trade at $74.48/bl, extending the previous session’s gains.
- Yesterday, Brent spot prices rose 0.8% to settle at $74.32/bl, after the American Petroleum Institute (API) reported that crude oil inventories declined by 6.10mn bls for the week ended 17 September.
- Meanwhile, the OPEC+ struggled to inject enough oil in August to meet current consumption as the world recovers from the coronavirus pandemic. However, several countries produced less than expected as part of the OPEC+ agreement indicating a widening of supply gap.
- Yesterday, the Illinois North Central No.2 Yellow corn spot prices fell 3.0% to $4.83/bushel.
- At 06:00 SAST today, gold prices advanced 0.2% to trade at $1,777.65/oz. Yesterday, gold gained 0.6% to close at $1,774.51/oz, as a weaker greenback lifted the demand for the safe haven yellow metal.
- Yesterday, copper declined 0.7% to close at $8,982.50/mt. Aluminium closed 0.7% lower at $2,825.02/mt.
CURRENCIES
- Yesterday, the South African rand weakened against the US dollar. In South Africa, Finance Minister, Enoch Godongwana stated that the country’s real gross domestic product growth had declined since 2015, with productivity growth having been slowed down further, and unemployment reaching a record high. Meanwhile, in the US, single-family homebuilding fell for a second consecutive month in August, as homebuilders continued to struggle with materials and labor, constraints, dragging on economic growth in 3Q21. However, multifamily housing picked up the pace of new-home construction and permitting in August.
- The yield on benchmark government bonds mostly rose yesterday. The yield on 2026 bond fell to 7.48%. Further, the yield on 2023 bond advanced to 5.03%, while that for the longer-dated 2030 issue rose to 9.05%.
- At 06:00 SAST, the US dollar is trading 0.3% lower against the South African rand at R14.7916, while the euro is trading 0.3% lower at R17.3424. At 06:00 SAST, the British pound has declined 0.3% against the South African rand to trade at R20.203.
- Yesterday, the euro advanced against most of the major currencies. The OECD raised the eurozone’s growth forecast by one point to 5.3%, though the outlook varied within the single-currency bloc, with higher growth now expected in France, Italy and Spain, while Germany was not performing as well.
- At 06:00 SAST, the euro marginally slipped against the US dollar to trade at $1.1724, while it has marginally weakened against the British pound to trade at GBP0.8584.
ECONOMIC UPDATES
- Leading indicator in South Africa recorded a drop to 122.00 in July. In the prior month, leading indicator had recorded a revised reading of 125.10.
- The seasonally adjusted trade surplus in Switzerland stood at CHF4.46bn in August, compared with a trade surplus of CHF4.24bn in the prior month.
- Building permits climbed 6.0% in the US on a MoM basis, in August. In the previous month, building permits had advanced by a revised 2.3%.
- The current account deficit in the US dropped to $190.30bn in 2Q21, compared with a current account deficit of $1894.00bn in the prior quarter. Market expectations were for the nation to post a current account deficit of $191.00bn.
- Housing starts in the US rose 3.9% in August on a MoM basis. Housing starts had registered a revised drop of 6.2% in the previous month.
- The new housing price index in Canada advanced 0.7% on a monthly basis, in August. The new housing price index had climbed 0.4% in the prior month.
- The final machine tool orders in Japan climbed 85.2% on an annual basis, in August. Machine tool orders had climbed 93.4% in the previous month. The preliminary figures had recorded an advance of 86.2%.
- In August, on a MoM basis, the Westpac leading index in Australia eased 0.3%. The Westpac leading index had fallen by a revised 0.1% in the previous month.
CORPORATE UPDATES
SOUTH AFRICA
- Hyprop Investments Limited (JO:HYPJ): The real estate investment trust company announced that Hystead Limited, in which the company holds a 60.0% interest, has received a non-binding offer from CEE BIG B.V, of which BIG owns 95.0%, to purchase Hystead’s entire shareholding in the entity that owns Delta City Mall in Podgorica, Montenegro, based on a gross property value of EUR95.00mn, and subject to customary net asset value adjustments. The sale proceeds will be used to reduce Hystead’s Euro-denominated debt.
- Grand Parade Investments (JO:GPLJ) Limited: The investment holding company announced that the Competition Tribunal approved the proposed transaction (sale of all of the shares it holds in Burger King South Africa (RF) Proprietary Limited (BKSA) and Grand Foods Meat Plant Proprietary Limited (Grand Foods Meat Plant), respectively, to an affiliate of ECP Africa Fund IV LLC and ECP Africa Fund IV A LLC, on 17 September 2021, subject to procurement of the investment of no less than R0.50bn in aggregate capital expenditure, establish at least 60 new Burger King outlets in SA, an increase in the total value of all payroll and employee benefits in respect of the 1,250 BKSA employees referred to above by not less than R120,000,000 and an improvement in its rating for the Enterprise and Supplier Development element under its B-BBEE scorecard.
- Sasol (JO:SOLJ) and Imperial (JO:IPLJ) Logistics partner to reduce carbon footprint: Sasol, the synthetic fuels and chemicals company that is SA’s biggest private sector emitter of greenhouse gases, is partnering with Imperial Logistics to transport freight across southern Africa using more environmentally friendly methods.
- Exxaro (JO:EXXJ) targets copper and manganese in shift to green metals: Coal producer Exxaro Resources is turning its attention to minerals such as copper and manganese as mining companies look to tap the green revolution.