Market Review, Corporate Updates, Commodities & Currencies - 25.06.21

  • Market Overview
  • Editor's Pick

SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the green yesterday, buoyed by gains in insurance sector stocks, despite concerns over rising domestic coronavirus infections.
  • Old Mutual (LON: OMU ) surged 6.1%, after the company announced plans to return R10.00bn to its shareholders through the unbundling of its stake in Nedbank.
  • Peers, Sanlam (JO: SLMJ ) and Discovery (JO: DSBPp ) rose 1.1% and 0.7%, respectively. Platinum miners, Impala Platinum (JO: IMPJ ) Holdings, Northam (JO: NHMJ ) Platinum and Anglo American (JO: AMSJ ) Platinum gained 2.2%, 2.0% and 0.4%, respectively.
  • Retail stocks, Cashbuild, Cie Financiere Richemont SA (JO: CFRJ ) and Lewis Grooup (JO: LEWJ ) advanced 1.6%, 1.2% and 0.8%, respectively.
  • On the flipside, gold miners, Harmony Gold Mining and Gold Fields (JO: GFIJ ) shed 1.6% and 0.9%, respectively.
  • The JSE All Share index advanced 0.7% to close at 66,263.49.

UK MARKET REVIEW

  • The UK market finished firmer yesterday, after the Bank of England (BoE) kept its monetary policy unchanged.
  • Miners, Anglo American, BHP Group (JO: BHPJ ), Glencore (LON: GLEN ) and Rio Tinto (LON: RIO ) gained 3.6%, 1.6%, 1.3% and 1.3%, respectively.
  • Retailers, Next and Kingfisher (LON: KGF ) added 1.4% and 0.5%, respectively. Banking companies, Barclays (LON: BARC ) and HSBC (LON: HSBA ) climbed 0.9%, each. Bunzl (LON: BNZL ) rose 0.7%, after the company stated that it expects an increase its 1H21 revenues, with recovery in its base business. On the flipside, telecommunications company, BT Group (LON: BT ) shed 1.3%. The FTSE 100 index advanced 0.5% to close at 7,109.97.

US MARKET REVIEW

  • US markets ended higher yesterday, after US President, Joe Biden indicated that he had reached an agreement with a bipartisan group on an infrastructure deal.
  • Darden Restaurants (NYSE: DRI ) advanced 3.3%, after the company reported that 4Q21 profits stood at pre-pandemic levels.
  • Accenture (NYSE: ACN ) added 2.1%, after the company reported better than expected 3Q21 revenues and profits.
  • Technology company, Microsoft (NASDAQ: MSFT ) added 0.5%, after it launched the Windows 11 operating system.
  • Peer, salesforce.com advanced 0.8%. On the flipside, Biogen (NASDAQ: BIIB ) plunged 6.1%.
  • Medical devices company, ABIOMED (NASDAQ: ABMD ) shed 3.1%.
  • The S&P 500 index rose 0.6% to settle at 4,266.49, while the DJIA index advanced 1.0% to close at 34,196.82.
  • The NASDAQ index climbed 0.7% to end the trading session at 14,369.71.

ASIA MARKET REVIEW

  • Asian markets are trading higher this morning, tracking overnight gains on Wall Street, after the US President, Joe Biden announced that the White House had reached an infrastructure deal after meeting with a bipartisan group of senators.
  • In Japan, electronics company, Panasonic (T: 6752 ) has added 4.5%.
  • However, logistics company, Mitsuibishi Logistics has shed 1.5%.
  • In Hong Kong, Budweiser Brewing company has surged 5.1%.
  • On the other hand, pharmaceuticals company, Sino Biopharmaceutical has declined 1.7%.
  • In South Korea, technology company, Samsung Electronics (KS: 005930 ) has climbed 0.5%.
  • The Nikkei 225 index is trading 0.8% higher at 29,108.91.
  • The Hang Seng index is trading 1.2% firmer at 29,229.03, while the Kospi index is trading 0.6% higher at 3,305.33.

COMMODITIES

  • At 06:00 SAST today, Brent spot prices fell 0.3% to trade at $75.07/bl, reversing the previous session’s gains.
  • Yesterday, Brent spot prices rose 0.2% to settle at $75.27/bl, amid uncertainty about the future of the 2015 Iran nuclear deal that could end US sanctions on Iranian crude exports.
  • Yesterday, the Illinois North Central No.2 Yellow corn spot prices fell 1.0% to $6.39/bushel.
  • At 06:00 SAST today, gold prices advanced 0.1% to trade at $1,777.68/oz. Yesterday, gold declined 0.2% to close at $1,775.17/oz, as investors reacted to the US Federal Reserve officials warning on inflation persisting in the long run and a rate hike by the end of 2022.
  • Yesterday, copper declined 0.6% to close at $9,391.75/mt. Aluminium closed 0.2% higher at $2,418.25/mt.

CURRENCIES

  • Yesterday, the South African rand strengthened against the US dollar. Meanwhile, in South Africa, COVID-19 infections continued to increase at an alarming rate, with Gauteng, the country’s economic hub, the worst affected amid reports of shortages of hospital beds and oxygen. On the data front, the producer price index ( PPI ) rose more than expected on a monthly basis in May. In the US, the economy grew at a steady rate in 1Q21, unrevised from the estimate published in May. The number of people filing for new claims for unemployment benefits fell for the week ended 18 June, as the labour market steadily recovers from the COVID-19 pandemic amid a reopening domestic economy. Durable goods order rebounded in May, lifted by a rise in orders for transportation equipment. On the contrary, goods trade deficit widened more than forecasts in May.
  • The yield on benchmark government bonds fell yesterday. The yield on 2026 bond fell to 7.31%. Further, the yield on 2023 bond declined to 5.16%, while that for the longer-dated 2030 issue fell to 8.89%.
  • At 06:00 SAST, the US dollar is trading 0.2% lower against the South African rand at R14.1862, while the euro is trading 0.1% lower at R16.9364. At 06:00 SAST, the British pound has declined 0.1% against the South African rand to trade at R19.7616.
  • Yesterday, the euro advanced against most of the major currencies, after German business morale rose by more than expected in June and hit its highest level since November 2018. In the UK, the BoE kept its key interest rate and the GBP20.00bn corporate bond programme unchanged. It indicated that inflation would surpass 3.0%, as the UK's locked-down economy reopens.
  • At 06:00 SAST, the euro advanced 0.1% against the US dollar to trade at $1.1939, while it has marginally gained against the British pound to trade at GBP0.8570.

ECONOMIC UPDATES

  • The PPI in South Africa rose 0.4% on a monthly basis in May, higher than market expectations of an advance of 0.3%. The PPI had advanced 0.7% in the previous month.
  • In South Africa, the PPI rose 7.40% on a YoY basis in May, compared to an advance of 6.7% in the prior month. Market anticipations were for the PPI to rise 7.3%.
  • On a quarterly basis, the final gross domestic product ( GDP ) in Spain, recorded a drop of 0.4% in 1Q21, lower than market expectations of a drop of 0.5%. In the prior quarter, GDP had recorded a revised rise of 0.01%. The preliminary figures had indicated a drop of 0.5%.
  • In June, the industrial business climate index in France registered a rise to 113.00. In the previous month, the industrial business climate index had recorded a level of 108.00.
  • The Ifo current assessment index rose to a level of 99.60 in June, in Germany, more than market expectations for a rise to 97.80. The Ifo current assessment index had registered a level of 95.70 in the prior month.
  • Compared to a reading of 102.90 in the prior month, the Ifo business expectations index in Germany climbed to 104.00 in June. Market expectations were for the Ifo business expectations index to climb to a level of 103.90.
  • In June, the Ifo business climate index recorded a rise to 101.80 in Germany, compared to a level of 99.20 in the prior month. Markets were anticipating the Ifo business climate index to climb to a level of 100.60.
  • The BoE held its interest rate steady at 0.10%, at par with market expectations 0.10%.
  • In week ended 18 June 2021, the seasonally adjusted number of initial jobless claims in the US eased to 411.00K, lower than market expectations of a drop to 380.00K. In the previous week, number of initial jobless claims had recorded a revised level of 418.00K.
  • In 1Q21, on a QoQ basis, the final annualized GDP advanced 6.4% in the US, compared to a rise of 4.30% in the prior quarter. Markets were anticipating the annualized GDP to climb 6.4%. The preliminary figures had also indicated an advance of 6.4%.
  • The final personal consumption climbed 11.3% in the US on a QoQ basis, in 1Q21. Personal consumption had registered a rise of 2.3% in the prior quarter. The preliminary figures had recorded a rise of 10.7%.
  • The seasonally adjusted wholesale inventories in the US advanced 1.1% on a MoM basis, in May. In the previous month, the wholesale inventories had registered a rise of 1.0%.
  • On a monthly basis, in May, the flash durable goods orders registered a rise of 2.3% in the US, lower than market expectations of a rise of 2.8%. Durable goods orders had fallen 0.8% in the prior month.
  • Advance goods trade deficit in the US expanded to $88.10bn in May, from an advance goods trade deficit of $85.20bn in the previous month.
  • The Kansas City Fed manufacturing activity index in the US advanced to 27.00 in June. The Kansas City Fed manufacturing activity index had recorded a level of 26.00 in the prior month.
  • In 1Q21, the final GDP price index recorded a rise of 4.3% in the US on a quarterly basis, compared to an advance of 1.9% in the previous quarter. Market anticipations were for the GDP price index to advance 4.30%. The preliminary figures had recorded an advance of 4.1%.

CORPORATE UPDATES

SOUTH AFRICA

  • Kumba Iron Ore Limited: The mining company, in its 1H21 trading statement, indicated that its EPS is expected to be increased by at least 150.0% from the same period of the prior year. Also, the company announced the appointment of Mr. Terence Goodlace as Chairman of the board of directors with effect from 23 June 2021, replacing Dr. Mandla Gantsho, who retired following the company’s Annual General Meeting on 14 May 2021.
  • Oil prices rise on expectations about European fuel demand: Oil prices gained for a second day after drawdowns in US inventories and accelerating German economic activity bolstered confidence in the fuel demand recovery.

Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb

Error: File type not supported

Drop an image here or

100