Market Review, Corporate Updates, Commodities & Currencies - 24.11.22

  • Market Overview

South Africa Market Review

  • South African markets closed in the green yesterday, ahead of the SARB interest rate decision.
  • Platinum miners, Northam Platinum (JO: NHMJ ), Anglo American Platinum (JO: AMSJ ) and Impala Platinum (JO: IMPJ ) climbed 4.0%, 3.5% and 3.1%, respectively.
  • Pharmaceutical companies, Aspen Pharmacare Holdings (JO: APNJ ), Netcare (JO: NTCJ ) and Adcock Ingram (JO: AIPJ ) holdings advanced 2.9%, 2.6% and 2.0%, respectively.
  • Gold miners, AngloGold Ashanti (JO: ANGJ ) and Harmony Gold Mining (JO: HARJ ) gained 2.5% and 1.4%, respectively.
  • Lenders, Investec and FirstRand (JO: FSRJ ) rose 1.8% and 1.0%, respectively.
  • Retailers, Pick ‘n Pay Stores (JO: PIKJ ) and Shoprite Holdings added 1.6% and 1.5%, respectively.
  • On the contrary, telecommunications company, Telkom SA SOC (JO: TKGJ ) and Blue Label Telecoms (JO: BLUJ ) shed 2.3% and 1.3%, respectively.
  • Construction companies, Aveng (JO: AEGJ ) and Murray & Roberts Holdings (JO: MURJ ) eased 2.2% and 2.0%, respectively.
  • The JSE All Share index advanced 0.9% to close at 72,891.45.

UK Market Review

  • The UK market finished firmer yesterday, as investors assessed better than expected business activity data and as the British top court ruled against a Scottish referendum vote.
  • Retailers, Ocado (LON: OCDO ), B&M European Value Retail S.A. (LON: BMEB ), JD Sports Fashion (LON: JD ) and J Sainsbury (OTC: JSAIY ) climbed 4.2%, 3.3%, 2.4% and 1.2%, respectively.
  • Miner, Glencore (LON: GLEN ) gained 3.0%, after Metals Acquisition Corporation agreed for an amended agreement to buy its Cobar copper mine in Australia.
  • Real estate companies, Berkeley Group Holdings (LON: BKGH ), Barratt Developments (LON: BDEV ) and Land Securities Group (LON: LAND ) advanced 1.5%, 1.3% and 1.1%, respectively.
  • On the other hand, pharmaceutical companies, GSK (LON: GSK ) and AstraZeneca (LON: AZN ) declined 1.8% and 0.8%, respectively.
  • The FTSE 100 index advanced 0.2% to close at 7,465.24.

US Market Review

  • US markets ended higher yesterday, after the US Federal Open Market Committee’ (FOMC) meeting minutes indicated a possible slowdown in interest rate hikes by the US Federal Reserve (Fed).
  • Media and entertainment companies, Warner Bros Discovery (NASDAQ: WBD ) and Walt Disney (NYSE: DIS ) climbed 5.0% and 2.8%, respectively.
  • Technology companies, Salesforce (NYSE: CRM ), Microsoft (NASDAQ: MSFT ) and Apple (NASDAQ: AAPL ) advanced 2.0%, 1.0% and 0.6%, respectively.
  • Financial services companies, JPMorgan Chase (NYSE: JPM ), Visa (NYSE: V ) and Goldman Sachs Group (NYSE: GS ) added 1.1%, 0.7% and 0.6%, respectively.
  • On the contrary, energy companies, Devon Energy Corporation (NYSE: DVN ), Chevron Corporation (NYSE: CVX ) and Exxon Mobil Corporation (NYSE: XOM ) declined 1.1%, 0.9% and 0.5%, respectively.
  • The S&P 500 index rose 0.6% to settle at 4,027.26, while the DJIA index advanced 0.3% to close at 34,194.06. The NASDAQ index climbed 1.0% to end the trading session at 11,285.32.

Asia Market Review

  • Asian markets are trading higher this morning, tracking overnight gains on Wall Street.
  • In Japan, transportation company, Kawasaki Kisen Kaisha (TYO: 9107 ) has advanced 3.9%.
  • On the flipside, automobile company, Mitsubishi Motors (TYO: 7211 ) has declined 1.6%.
  • In Hong Kong, pharmaceutical company, Sino Biopharmaceutical (HK: 1177 ) has gained 3.1%.
  • On the other hand, consumer electronics company, Xiaomi Corporation (HK: 1810 ) has dropped 4.2%.
  • In South Korea, paper company, Han Chang Paper Company (KS: 009460 ) has surged 10.9%.
  • On the contrary, financial services company, Meritz Financial Group (KS: 138040 ) has shed 4.3%.
  • The Nikkei 225 index is trading 1.2% higher at 28,441.37.
  • The Hang Seng index has gained 0.3% to trade at 17,576.79, while the Kospi index is trading 0.6% higher at 2,431.77.

Commodities

  • At 06:00 SAST today, Brent spot prices rose 0.6% to trade at $84.13/bl, reversing previous sessions losses.Yesterday, Brent spot prices fell 4.2% to settle at $83.59/bl, as the Group of Seven (G7) nations looked at a price cap on Russian oil above current trading level. Meanwhile, the US Energy Information Administration (EIA) reported that the US crude inventories fell by 3.69mn bls in the week ended 18 November 2022. Further, Baker Hughes reported that the oil rig count rose 4 to 627 in the week ended 23 November 2022.
  • Yesterday, the Illinois North Central No.2 Yellow corn spot prices rose 0.9% to $7.1325/bushel.
  • At 06:00 SAST today, gold prices advanced 0.4% to trade at $1,756.47/oz. Yesterday, gold gained 0.5% to close at $1,749.68/oz, as a weaker dollar and a drop in the US Treasury Yields boosted demand for the safe haven yellow metal.
  • Yesterday, copper declined 0.2% to close at $7,962.25/mt. Aluminium closed 1.5% lower at $2,369.40/mt.

Currencies

  • Yesterday, the South African rand strengthened against the US dollar. In South Africa, consumer price inflation unexpectedly rose in October. Moreover, the business confidence index dropped in 4Q22, amid power cuts, poorly functioning ports and a failing railway network. In the US, the initial jobless claims increased more than expected in the week ended 18 November 2022. Meanwhile, the consumer sentiment declined less than expected in November. Further, FOMC minutes indicated that the Fed is considering a slower pace of rate hikes in future.
  • The yield on benchmark government bonds fell yesterday. The yield on 2026 bond remained unchanged at 8.65%. Further, the yield on the longer-dated 2030 issue fell to 10.19%.
  • At 06:00 SAST, the US dollar is trading 0.2% lower against the South African rand at R16.9313, while the euro is trading 0.2% higher at R17.6827. At 06:00 SAST, the British pound has gained 0.2% against the South African rand to trade at R20.4906.
  • Yesterday, the euro mostly declined against most of the major currencies. In Germany, private sector activity contracted in November. In the eurozone, the S&P Global manufacturing PMI improved in November. In the UK, economic activity deteriorated for a fourth consecutive month in November, amid drop in new orders.
  • At 06:00 SAST, the euro advanced 0.4% against the US dollar to trade at $1.0443, while it has gained 0.1% against the British pound to trade at GBP0.8629.

Economic Updates

  • In South Africa, the consumer price index (CPI) rose 0.4% on a MoM basis in October, more than market expectations for a rise of 0.2%. In the prior month, the CPI had registered a rise of 0.1%.
  • In the UK, the preliminary manufacturing PMI remained unchanged at a level of 46.20 in November. Markets were anticipating the manufacturing PMI to ease to a level of 45.80.
  • In the UK, the flash services PMI remained unchanged at a level of 48.80 in November. Markets were expecting the manufacturing PMI to ease to a level of 48.00.
  • In France, the preliminary manufacturing PMI registered a rise to a level of 49.10 in November. The Manufacturing PMI had registered a level of 47.20 in the prior month.
  • In France, the preliminary services PMI eased to 49.40 in November, more than market expectations for a drop to a level of 50.60. In the previous month, the services PMI had registered a level of 51.70.
  • In Germany, the preliminary manufacturing PMI registered a rise to 46.70 in November, compared to a level of 45.10 in the previous month.
  • In Germany, the flash services PMI fell to a level of 46.40 in November, compared to a level of 46.50 in the prior month. Markets were anticipating services PMI to ease to a level of 46.20.
  • In the eurozone, the preliminary manufacturing PMI unexpectedly rose to a level of 47.30 in November. In the prior month, the manufacturing PMI had registered a level of 46.40.
  • In the eurozone, the flash services PMI remained unchanged at a level of 48.60 in November. Markets were anticipating the services PMI to ease to a level of 48.00.
  • In the US, durable goods orders registered a rise of 1.0% in October, more than market expectations for a rise of 0.4%. Durable goods orders had registered a revised rise of 0.3% in the prior month.
  • In the US, the number of initial jobless claims recorded a rise to a level of 240.00K in the week ended 18 November 2022. Number of initial jobless claims had registered a revised level of 223.00K in the prior week.
  • In the US, the number of mortgage applications registered a rise of 2.2% in the week ended 18 November 2022. The number of mortgage applications had recorded a rise of 2.7% in the previous week.
  • In the US, the S&P Global manufacturing PMI recorded a drop to a level of 47.60 in November, more than market expectations for a drop to a level of 50.00. The Manufacturing PMI had registered a reading of 50.40 in the prior month.
  • In the US, the S&P Global services PMI recorded a drop to a level of 46.10 in November. The manufacturing PMI had registered a reading of 47.80 in the prior month.
  • In the US, the Michigan Consumer Sentiment Index recorded a rise to a level of 56.80 in November, more than market expectations of a rise to a level of 55.00. The Michigan Consumer Sentiment Index had recorded a level of 59.90 in the prior month.
  • In the US, new home sales registered a rise of 7.5% on a MoM basis in October. New home sales had recorded a revised fall of 11.0% in the prior month.
  • In Japan, the Jibun Bank manufacturing PMI registered a drop to a level of 49.40 in November. The Manufacturing PMI had registered a level of 50.70 in the previous month.
  • In Japan, the Jibun Bank services PMI registered a drop to a level of 50.00 in November, more than market expectations for a drop to a level of 53.10. The Services PMI had registered a level of 53.20 in the previous month.

Corporate Updates

South Africa

  • Anglo American Plc (JO: AGLJ ): The mining company announced that it has secured desalinated water supply for its Los Bronces copper mine in Chile from 2025, following signing of an agreement with Aguas Pacífico, meeting almost half of the mine’s water requirements.
  • Naspers Limited (JO: NPNJn ): The internet company, in its 1H22 results, stated that its revenue from contracts with customers increased to $3.73bn from $3.26bn posted in the corresponding period of the previous year. Its diluted EPS stood at $4.38, compared with $29.74 recorded in the corresponding period of the previous year.
  • Telkom SA SOC Ltd (JO: TKGJ ): The telecommunications company, in its 1H22 results, indicated that its revenue fell to R21.15bn from R21.29bn posted in the corresponding period of the previous year. Its diluted EPS decreased 52.9% from the same period of the prior year to 126.90c.
  • RFG Holdings Limited (JO: RFGJ ): The food company, in its FY22 results, reported that its revenue advanced 21.9% from the preceding year to R7.26bn. Its diluted EPS stood at 137.30c, compared with 82.10c recorded in the previous year.
  • Brikor reports a mixed performance for the half-year: Brick and coal group Brikor (JO: BIKJ ) has reported a rise in operating profit for the six months ended 31 August, with some segments lifted by an increase in DIY projects, additions, and alterations as well as in the informal building sector.
  • RMB to fund Octotel’s R2.00bn fibre expansion: Octotel, one of SA’s largest fibre players, has just secured R2.00bn in financing from RMB (JO: RMHJ ) to push its network rollout, particularly in outlying parts of SA. This is yet another sign of the increasing appetite by local banks to get in on SA’s fibre game.

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