Market Review, Corporate Updates, Commodities & Currencies - 25.11.22

  • Market Overview

South Africa Market Review

  • South African markets closed in the green yesterday, as investors assessed a 75 bps interest rate hike by the South African Reserve Bank (SARB).
  • Gold miners, AngloGold Ashanti (JO: ANGJ ), Harmony Gold Mining (JO: HARJ ) and Gold Fields (JO: GFIJ ) advanced 2.8%, 1.8% and 1.4%, respectively.
  • Property dealers, Capital & Counties Properties (JO: CCOJ ), Fortress REIT (JO: FFAJ ) and NEPI Rockcastle (JO: NRPJ ) gained 1.6%, 1.5% and 1.4%, respectively.
  • Platinum miners, Royal Bafokeng Platinum (JO: RBPCBe ) and Northam Platinum (JO: NHMJ ) added 1.4% and 0.7%, respectively.
  • On the flipside, retailer, Mr Price Group (JO: MRPJ ) plunged 8.1%, after the company reported lower sales in its interim results.
  • Lenders, FirstRand (JO: FSRJ ), Nedbank Group (JO: NEDJ ) and Absa Group (JO: ABGJ ) declined 1.2%, 1.1% and 0.7%, respectively.
  • The JSE All Share index advanced 0.3% to close at 73,127.34.

UK Market Review

  • The UK market finished firmer yesterday, buoyed by gains in mining sector stocks.
  • Product testing company, Intertek Group (LON: ITRK ) climbed 4.6%, after the company reported revenue growth in 10 months ended 31 October 2022.
  • Water Utilities companies, United Utilities Group (LON: UU ) and Severn Trent (LON: SVT ) advanced 3.2% and 1.5%, respectively.
  • Banking firms, NatWest (LON: NWG ) and Lloyds Banking Group (LON: LLOY ) gained 1.7% and 1.0%, respectively.
  • Miners, Glencore (LON: GLEN ) and Antofagasta (LON: ANTO ) added 1.1% and 0.9%, respectively.
  • On the other hand, retail company, Kingfisher (LON: KGF ) dropped 1.6%, after the company cut its annual profit outlook.
  • The FTSE 100 index marginally advanced to close at 7,466.60.

US Market Review

  • US markets were closed yesterday on account of a public holiday.
  • On Wednesday, 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 lower this morning.
  • In Japan, tire and rubber company, Bridgestone Corporation (TYO: 5108 ) has declined 2.1%.
  • On the flipside, banking and financial services company, Fukuoka Financial Group (TYO: 8354 ) has gained 3.8%.
  • In Hong Kong, internet technology company, NetEase (NASDAQ: NTES ) has shed 3.1%.
  • On the other hand, consumer electronics company, Xiaomi Corporation (HK: 1810 ) has advanced 2.1%.
  • In South Korea, shoes company, Hwaseung Enterprise (KS: 241590 ) has dropped 5.5%.
  • On the contrary, project and construction management company, HanmiGlobal (KS: 053690 )has surged 8.3%.
  • The Nikkei 225 index is trading 0.4% lower at 28,280.75.
  • The Hang Seng index has declined 0.9% to trade at 17,493.31, while the Kospi index is trading 0.2% lower at 2,435.84.

Commodities

  • At 06:00 SAST today, Brent spot prices rose 0.4% to trade at $84.35/bl, extending previous sessions gains.
  • Yesterday, Brent spot prices rose 0.5% to settle at $84.01/bl.
  • Yesterday, the Illinois North Central No.2 Yellow corn spot prices marginally fell to $7.1325/bushel.
  • At 06:00 SAST today, gold prices advanced 0.3% to trade at $1,760.31/oz. Yesterday, gold gained 0.3% to close at $1,755.24/oz, as a weaker dollar boosted demand for the safe haven yellow metal.
  • Yesterday, copper rose 0.5% to close at $8,003.00/mt. Aluminium closed 1.3% lower at $2,337.76/mt.

Currencies

  • Yesterday, the South African rand weakened against the US dollar. In South Africa, producer price inflation declined for the third consecutive month in October. Moreover, the SARB raised its interest rates at the steepest rate in two decades for a third consecutive time, by 75 bps to 7.0%.
  • The yield on benchmark government bonds fell yesterday. The yield on 2026 bond fell to 8.57%. Further, the yield on the longer-dated 2030 issue fell to 10.12%.
  • At 06:00 SAST, the US dollar is trading 0.1% lower against the South African rand at R16.9991, while the euro is trading marginally lower at R17.7144. At 06:00 SAST, the British pound has declined 0.1% against the South African rand to trade at R20.5961.
  • Yesterday, the euro mostly advanced against most of the major currencies. In Germany, the Ifo business confidence improved in November, to its highest level in three months. Further, the Ifo current conditions indicator and the business climate index, both, recovered in November.
  • At 06:00 SAST, the euro advanced 0.1% against the US dollar to trade at $1.0421, while it has gained 0.1% against the British pound to trade at GBP0.8601.

Economic Updates

  • In South Africa, the producer price index (PPI) recorded a rise of 0.40% on a MoM basis in October, less than market expectations for a rise of 0.45%. The PPI had recorded a rise of 0.7% in the previous month.
  • The South African Reserve Bank (SARB), in its latest policy meeting, raised its interest rate by 75.00 basis points to 7.0%.
  • In France, the business climate index fell to a level of 101 in November, compared to a level of 103 in the prior month.
  • In Germany, the Ifo business climate index recorded a rise to a level of 86.30 in November, more than market expectations for a rise to a level of 85.00. The Ifo business climate index had registered a revised level of 84.50 in the prior month.
  • In Germany, the Ifo current assessment index rose to a level of 93.10 in November, compared to a revised level of 84.20 in the prior month. Markets were expecting the Ifo current assessment index to rise to a level of 93.80.
  • In Germany, the Ifo business expectations index climbed to a level of 80.00 in November, more than market expectations for a rise to a level of 77.00. The Ifo business expectations index had registered a revised level of 75.90 in the prior month.
  • In Japan, the Tokyo consumer price index (CPI) registered a rise of 3.8% on a YoY basis in November, more than market expectations for a rise of 3.6%. The Tokyo CPI had advanced 3.5% in the prior month.
  • In New Zealand, retail sales unexpectedly climbed 0.4% on a QoQ basis in 3Q22, compared to market expectations for a drop of 3.4%. In the prior quarter, retail sales had dropped by a revised 2.2%.

Corporate Updates

South Africa

  • Mr Price Group Ltd (JO: MRPJ ): The fashion retail company, in its 1H23 results, indicated that its revenue rose to R13.25bn from R12.45bn posted in the corresponding period of the previous year. Its diluted EPS increased 13.8% from the same period of the prior year to 490.10c.
  • Anglo American Plc (JO: AMSJ ): The mining company announced that it has signed a memorandum of understanding with Aurubis AG to develop a copper product offering that responds to increasing expectations for future-enabling metals that are sustainably sourced and supplied. The objective of the collaboration is to provide assurance around the way copper is mined, processed, transported and brought to market.
  • Hosken Consolidated Investments Limited (JO: HCIJ ): The investment company, in its interim trading update, reported that it expects basic EPS to be between R11.70 and R12.00, higher compared with R2.98 recorded in the previous year. Furthermore, it expects its HEPS to be between R11.01 and R11.29, higher compared with R2.71 recorded in the previous year.
  • Tsogo Sun Gaming Limited (JO: TSGJ ): The gaming, hotels and entertainment company, in its 1H23 results, reported that its income advanced 42.9% from the same period of the preceding year to R5.46bn. Its basic and diluted EPS stood at 64.10c, compared with 31.10c recorded in the previous year.
  • Clicks Group Plc (JO: CLSJ ): The healthcare retail company announced that it intends to acquire Sorbet Holdings from Old Mutual (LON: OMU ) Private Equity, for a cash consideration of R105.00mn. The proposed transaction is subject to approval by competition authorities.
  • Lewis Group Plc (JO: LEWJ ): The home appliances and furniture retail company, in its 1H23 results, stated that its revenue increased to R3.54bn from R3.41bn posted in the corresponding period of the previous year. Its diluted EPS fell 0.6% from the same period of the prior year to 333.80c.
  • Oil slides as G7 price cap on Russian oil price eases supply worries: Oil trickled down, hovering around two-month lows, as the proposed price cap on Russian oil from Group of Seven (G7) nations was considered higher than the current trading levels, alleviating concerns over tight supply.

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