Market Review, Corporate Updates, Commodities & Currencies - 27.07.21

Published 2021/07/27, 08:50

SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the red yesterday, pulled down by losses in technology sector stocks.
  • Market heavyweight, Naspers (JO:NPNJn) plunged 7.2%, tracking losses in its Hong Kong subsidiary, Tencent Holdings (HK:0700), after Chinese competition authorities ordered the latter to stop the practice of exclusive music licensing rights.
  • Banking firms, Nedbank Group (JO:NEDJ), Standard Bank (JO:SBKJ) Group and FirstRand (JO:FSRJ) dropped 2.3%, 1.4% and 1.0%, respectively.
  • On the other hand, platinum miners, Anglo American (JO:AMSJ) Platinum, Impala Platinum (JO:IMPJ) Holdings and Northam (JO:NHMJ) Platinum surged 7.9%, 5.0% and 4.1%, respectively.
  • Further, gold miners, Harmony Gold Mining and Gold Fields (JO:GFIJ) rose 3.6% and 2.2%, respectively.
  • The JSE All Share index marginally declined to close at 68,051.05.

UK MARKET REVIEW

  • The UK market finished weaker yesterday, on account of a stronger pound.
  • Utility companies, United Utilities Group (LON:UU) and Severn Trent (LON:SVT) dropped 0.8% and 0.3%, respectively, after the UK’s water regulator stated that it would permit water suppliers to raise prices for businesses and other non-household customers from next year, in a bid to offset the costs of higher amounts of bad debt amid the COVID-19 pandemic.
  • On the flipside, miners, Antofagasta (LON:ANTO), Glencore (LON:GLEN), Anglo American and Rio Tinto (LON:RIO) advanced 4.1%, 3.3%, 3.2% and 3.1%, respectively.
  • Royal Dutch Shell (LON:RDSa) rose 2.6%, after the company announced plans to develop a new oilfield in the Gulf of Mexico, its first major project to get the go-ahead since a Dutch court ordered it to accelerate carbon emissions reduction targets.
  • The FTSE 100 index marginally declined to close at 7,025.43.

US MARKET REVIEW

  • US markets ended higher yesterday, as investors awaited corporate earnings releases of technology companies.
  • Hasbro (NASDAQ:HAS) soared 12.2%, after the company reported better-than-expected 2Q21 adjusted profits.
  • Aon (NYSE:AON) surged 8.2%, after the company and Willis Towers Watson (NASDAQ:WLTW) announced a mutual agreement to terminate their $30.00bn merger deal and end the litigation with the US Justice Department.
  • Technology companies, Intel (NASDAQ:INTC), Cisco Systems (NASDAQ:CSCO) and Apple (NASDAQ:AAPL) rose 2.5%, 0.4% and 0.3%, respectively.
  • On the contrary, Lockheed Martin (NYSE:LMT) fell 3.3%, after the company reported a less than expected 2Q21 profit.
  • The S&P 500 index rose 0.2% to settle at 4,422.30, while the DJIA index advanced 0.2% to close at 35,144.31.
  • The NASDAQ index marginally climbed to end the trading session at 14,840.71.

ASIA MARKET REVIEW

  • Asian markets are trading mostly higher this morning, tracking overnight gains on Wall Street.
  • In Japan, technology company, Sony Group (NYSE:SONY) has advanced 1.0%.
  • Banking firms, Mitsubishi UFJ Financial Group (T:8306) and Sumitomo Mitsui Financial Group (T:8316) have risen 1.6% and 1.3%, respectively.
  • In Hong Kong, market heavyweight, Tencent Holdings has dropped 3.9%.
  • On the other hand, oil company, CNOOC (HK:0883) has gained 0.9%.
  • In South Korea, technology company, LG Electronics (KS:066570) has climbed 0.6%. Moreover, peer, Samsung Electronics (KS:005930) has added 0.3%.
  • The Nikkei 225 index is trading 0.5% higher at 27,961.02.
  • The Hang Seng index is trading 1.1% lower at 25,893.86, while the Kospi index is trading 0.7% higher at 3,246.57.

COMMODITIES

  • At 06:00 SAST today, Brent spot prices rose 0.2% to trade at $74.31/bl, extending the previous session’s gains.
  • Yesterday, Brent spot prices rose 0.6% to settle at $74.16/bl, amid hopes that tighter oil supply and rising vaccination rates will help offset any impact on demand due to surging COVID-19 cases worldwide.
  • Yesterday, the Illinois North Central No.2 Yellow corn spot prices rose 0.2% to $6.23/bushel.
  • At 06:00 SAST today, gold prices advanced 0.1% to trade at $1,799.28/oz. Yesterday, gold declined 0.3% to close at $1,797.63/oz, as investors remained cautious ahead of the US Federal Reserve (Fed) meeting outcome.
  • Yesterday, copper rose 3.1% to close at $9,793.25/mt. Aluminium closed 0.7% higher at $2,510.90/mt.

CURRENCIES

  • Yesterday, the South African rand strengthened against the US dollar, after new home sales in the US fell to a 14-month low in June and as sales in the prior month were weaker than initially estimated, signalling that expensive lumber and shortages of other building materials were hurting the housing market. Moreover, the Dallas Fed Manufacturing Index fell in July.
  • The yield on benchmark government bonds fell yesterday. The yield on 2026 bond fell to 7.28%. Further, the yield on 2023 bond declined to 4.97%, while that for the longer-dated 2030 issue fell to 8.84%.
  • At 06:00 SAST, the US dollar is trading marginally lower against the South African rand at R14.7876, while the euro is trading 0.1% lower at R17.4556. At 06:00 SAST, the British pound has marginally declined against the South African rand to trade at R20.4385.
  • Yesterday, the euro declined against most of the major currencies, after German business morale unexpectedly dropped in July on continuing supply chain worries and amid rising coronavirus infections.
  • At 06:00 SAST, the euro marginally advanced against the US dollar to trade at $1.1805, while it has marginally weakened against the British pound to trade at GBP0.8541.

ECONOMIC UPDATES

  • The Ifo business climate index registered an unexpected drop to a level of 100.80 in Germany, in July. The Ifo business climate index had recorded a revised reading of 101.70 in the previous month.
  • In July, the Ifo current assessment index climbed to 100.40 in Germany, less than market expectations for an advance to a level of 101.50. In the prior month, the Ifo current assessment index had recorded a revised level of 99.70.
  • In Germany, the Ifo business expectations index recorded a drop to 101.20 in July, compared to a revised level of 103.70 in the previous month. Markets were expecting the Ifo business expectations index to drop to 103.00.
  • On a monthly basis, new home sales in the US dropped 6.6% in June, compared to a revised drop of 7.8% in the prior month. Market expectations were for new home sales to advance 3.5%.
  • In July, the Dallas Fed manufacturing business index in the US eased to 27.30. The Dallas Fed manufacturing business index had registered a reading of 31.10 in the previous month.
  • The corporate service price index rose 1.4% in Japan on an annual basis, in June. The corporate service price index had climbed 1.5% in the prior month.
  • On an annual basis, industrial profits (YoY) climbed 20.0% in China, in June. Industrial profits (YoY) had advanced 36.4% in the previous month.

CORPORATE UPDATES

SOUTH AFRICA

  • Anglo American Platinum Ltd (JO:AMSJ): The platinum mining company, in its 1H21 results, stated that its revenue increased to R107.54bn from R42.17bn posted in the corresponding period of the previous year. Its diluted EPS stood at R176.02, compared with R25.12 recorded in the corresponding period of the previous year.
  • Aspen (JO:APNJ) Pharmacare Holdings Limited: The pharmaceuticals company confirmed that the first supplies to South Africa of the Johnson & Johnson COVID-19 vaccines, from the new API source located in Europe, will be released to Johnson & Johnson from its flagship Gqeberha-based manufacturing site. These vaccines will be distributed throughout South Africa in line with the various distribution arrangements between Johnson & Johnson, the National Department of Health and other stakeholders. In addition, vaccines from these batches will be made available through the African Vaccine Acquisition Task Team/African Union platform.
  • Reinet Investments SCA (JO:RNIJ).: The investment company, in its 1Q22 management statement, indicated that its net asset value decreased 4.3%, compared with that recorded in the period to 31 March 2021.
  • Liberty Two Degrees (JO:L2DJ): The real estate investment trust company, in its 1H21 results, reported that its revenue declined 8.0% from the same period of the preceding year to R438.80mn. Its diluted EPS stood at 19.59c, compared with a loss per share of 155.27c recorded in the corresponding period of the previous year.
  • Merafe Resources Limited: The mineral exploration company, in its 1H21 production report and trading statement, revealed that attributable ferrochrome production increased 65.6%, compared with that in the previous corresponding period to 199.00kt. Its EPS is expected to be between 19.20c and 26.80c, compared with a loss per share of 38.30c recorded in the corresponding previous period.
  • Zimplats (ASX:ZIM) plans 185MW solar power plants: Zimplats, the Zimbabwean unit of Impala Platinum (Implats), plans to build two solar power plants with generation capacity of 185MW to power its operations, the country’s energy regulator said.

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