SOUTH AFRICA MARKET REVIEW
- South African markets closed in the green yesterday, buoyed by the release of robust domestic corporate earnings reports.
- Retailers, Steinhoff International Holdings (JO: SNHJ ) N.V., Cie Financiere Richemont SA (JO: CFRJ ) and Cashbuild (JO: CSBJ ) soared 10.4%, 1.3% and 0.7%, respectively.
- Real estate companies, Attacq (JO: ATTJ ), Emira Property Fund (JO: EMIJ ) and Capital & Counties Properties (JO: CCOJ ) advanced 2.6%, 2.4% and 2.0%, respectively.
- Pharmaceutical companies, Adcock Ingram Holdings (JO: ADEOJ ), Mediclinic International (LON: MDCM ) and Life Healthcare Group Holdings (JO: LHCJ ) rose 1.8%, 1.3% and 1.0%, respectively.
- Mining companies, BHP Group (JO: BHPJ ) and Anglo American (JO: AMSJ ) gained 1.1% and 1.0%, respectively.
- On the contrary, banking firms, Absa Group (JO: ABGJ ), Capitec Bank Holdings (JO: CPIJ ) and FirstRand (JO: FSRJ ) shed 1.8%, 0.8% and 0.6%, respectively.
- The JSE All Share index advanced 0.4% to close at 67,759.76.
- The UK market finished weaker yesterday, as the release of weaker than expected corporate earnings dampened investor sentiment.
- Royal Dutch Shell (LON: RDSa ) declined 3.0%, after the oil and energy company reported lower than expected 3Q21 adjusted earnings, following Hurricane Ida's impact on its operations.
- Retailers, J Sainsbury (OTC: JSAIY ) and Kingfisher (LON: KGF ) dropped 2.3% and 2.0%, respectively.
- On the flipside, WPP (LON: WPP ) soared 8.1%, after the company raised its FY21 earnings guidance, following robust earnings in 3Q21.
- GlaxoSmithKline (LON: GSK ) advanced 4.0%, after the release of strong 3Q21 results.
- Lloyds Banking Group (LON: LLOY ) rose 1.3%, after it raised its FY21 outlook, following the reversal of bad debts in its 3Q21 period.
- The FTSE 100 index declined 0.1% to close at 7,249.47.
US MARKET REVIEW
- US markets ended higher yesterday, buoyed by upbeat corporate earnings and after the US President, Joe Biden revealed the framework for a $1.75tn social-spending bill with extended CTC payments and climate change provisions.
- Merck & Company surged 6.1%, after the company reported better than expected 3Q21 results as well as increased its profit guidance for FY21.
- On the contrary, Northrop Grumman Corporation (NYSE: NOC ) plummeted 7.6%, even though the company reported robust 3Q21 profits, despite sales falling short amid weaker service business.
- The S&P 500 index rose 1.0% to settle at 4,596.42, while the DJIA index advanced 0.7% to close at 35,730.48.
- The NASDAQ index climbed 1.4% to end the trading session at 15,448.12.
ASIA MARKET REVIEW
- Asian markets are trading mostly lower this morning, despite overnight gains on Wall Street.
- Meanwhile, certain China Evergrande Group (HK: 3333 ) bondholders received an overdue interest payment shortly before the expiry of a grace period, buying more time for the company as it tries to raise cash through asset sales.
- In Japan, technology company, Panasonic (T: 6752 ) has shed 4.3%.
- On the contrary, Sony Group (NYSE: SONY ) has added 2.0%.
- In Hong Kong, Xinyi Glass Holdings (HK: 0868 ) has dropped 1.8%.
- On the flipside, Budweiser Brewing Co (HK: 1876 ).
- APAC has added 2.9%. In South Korea, construction company, Ilsung Construction has shed 4.9%.
- On the contrary, cement company, Hanil Cement (KS: 003300 ) has soared 6.8%.
- The Nikkei 225 index is trading 0.4% higher at 28,924.66.
- The Hang Seng index has declined 0.4% to trade at 25,443.54, while the Kospi index is trading 0.6% lower at 2,990.20.
- At 06:00 SAST today, Brent spot prices rose 0.1% to trade at $84.17/bl, extending the previous session’s gains.
- Yesterday, Brent spot prices rose 0.6% to settle at $84.11/bl. Meanwhile, concerns arose about US crude oil supply growth along with assumptions that Iran’s supply could come onboard after the country's nuclear negotiator, Ali Bagheri Kani stated on 27 October that the country's talks to revive a 2015 nuclear deal will restart by the end of November.
- Yesterday, the Illinois North Central No.2 Yellow corn spot prices rose 1.1% to $5.29/bushel.
- At 06:00 SAST today, gold prices declined 0.1% to trade at $1,796.23/oz. Yesterday, gold gained 0.1% to close at $1,798.91/oz, as a weaker greenback and US Treasury bond yields boosted demand for the safe haven yellow metal.
- Yesterday, copper rose 1.9% to close at $9,855.50/mt. Aluminium closed 2.6% higher at $2,735.50/mt.
- Yesterday, the South African rand weakened against the US dollar. In South Africa, the producer price index (PPI) advanced more than expected in September to its highest level in five years. In the US, economic growth slowed in 3Q21, amid a revival in coronavirus infections. Consumer spending dropped in 3Q21, with supply chain disruptions impacting industries like automobiles. Meanwhile, initial jobless claims dropped to its lowest for the week ended 22 October, as companies hired more workers. Also, pending home sales dropped in September.
- The yield on benchmark government bonds rose yesterday. The yield on 2026 bond rose to 8.08%. Further, the yield on 2023 bond advanced to 5.51%, while that for the longer-dated 2030 issue rose to 9.58%.
- At 06:00 SAST, the US dollar is trading marginally higher against the South African rand at R15.1399, while the euro is trading 0.1% lower at R17.6745. At 06:00 SAST, the British pound has marginally gained against the South African rand to trade at R20.8896.
- Yesterday, the euro advanced against most of the major currencies. In Germany, the consumer price index (CPI) increased in line with expectations in October. In the eurozone, economic sentiment boosted in October, reversing the estimates of a decline in the sentiment. Meanwhile, the European Central Bank President, Christine Lagarde tried to drive back against rising market expectations of an increase in interest rate by next year, saying that such a move wasn’t in line with the bank’s detailed road map to uplift.
- At 06:00 SAST, the euro slipped 0.1% against the US dollar to trade at $1.1675, while it has weakened 0.1% against the British pound to trade at GBP0.8462.
- The PPI recorded a rise of 0.9% in South Africa on a monthly basis in September, compared with a rise of 0.8% in the prior month. Markets were expecting the PPI to advance 0.45%.
- In Germany, the seasonally adjusted unemployment rate eased to 5.4% in October, compared with a reading of 5.5% in the previous month. Markets were anticipating unemployment rate to fall to 5.4%.
- The preliminary CPI registered a rise of 0.5% in Germany on a MoM basis in October, meeting market expectations of a rise of 0.5%. In the previous month, the CPI had registered a flat reading of 0.0%.
- The final consumer confidence index registered a drop to -4.80 in the eurozone, in October, at par with market expectations of a drop to -4.80. In the previous month, the consumer confidence index had registered a level of -4.00. The preliminary figures had also recorded a fall to -4.80.
- In the eurozone, the economic sentiment indicator climbed unexpectedly to a level of 118.60 in October, compared with a reading of 117.80 in the prior month.
- The industrial confidence index climbed unexpectedly to a level of 14.20 in the eurozone, in October, compared with a reading of 14.10 in the prior month.
- The European Central Bank kept its interest rate unchanged at 0.0%. Markets were expecting the central bank to keep its interest rate unchanged at 0.0%.
- In the US, the flash annualized gross domestic product rose 2.0% on a QoQ basis in 3Q21, less than market expectations for an advance of 2.7%. In the prior quarter, the annualized GDP had advanced 6.7%.
- On a quarterly basis, the preliminary personal consumption climbed 1.6% in the US, in 3Q21. In the prior quarter, personal consumption had climbed 12.0%.
- On a MoM basis, pending home sales in the US fell 2.3% in September. In the prior month, pending home sales had recorded a rise of 8.1%.
- The Kansas City Fed manufacturing activity index rose to a level of 31.00 in October, in the US, compared with a level of 22.00 in the previous month.
- In Japan, the preliminary industrial production recorded a drop of 5.4% in September on a monthly basis, more than market expectations for a drop of 3.2%. In the previous month, industrial production had recorded a drop of 3.6%.
- Anglo American Platinum Ltd (JO: AMSJ ): The platinum mining company stated that African Rainbow Minerals (JO: ARIJ ) Limited (ARM) is currently in discussions regarding its potential acquisition of Bokoni Platinum Mine from its current owners, Anglo American Platinum and Atlatsa Resources Corporation. Anglo American Platinum confirms that discussions are ongoing with ARM on the disposal of Bokoni Platinum Mine and the terms of the proposed transaction are yet to be finalised.
- EOH Holdings (JO: EOHJ ) Limited: The technology company, in its FY21 results, indicated that its revenue fell to R6.87bn from R8.77bn posted in the previous year. Its loss per share decreased 83.4% from the prior year to 166.00c.
- Sibanye Stillwater (JO: SSWJ ) Limited: The mining company, in its 3Q21 operational update, revealed that mined 2E PGM production for 3Q21 of 144,325 2Eoz was 2.0% lower than 3Q20. Production from the Stillwater operation was 90,262 2Eoz, or 2.0% lower than for 3Q20, primarily due to reduced heading availability in key production stopes constrained by rail restrictions, resulting in mining of lower grade areas. The SA PGM operations continue to perform strongly in 3Q21 with 4E PGM production (excluding third party purchase of concentrate (PoC)) of 500,073 4Eoz, 20.0% higher than for the comparable period in 2020. Also, the company announced that it has successfully completed its $70.00mn strategic investment in ioneer Limited following approval by ioneer’s shareholders at an Extraordinary General Meeting on 21 October 2021, with 99.9% of the votes cast in favour of the transaction, and approval from the Financial Surveillance Department of the South African Reserve Bank.
- Mix Telematics Limited (JO: MIXJ ): The software company, in its 1H22 results, reported that its revenue advanced 0.1% from the same period of the preceding year to R1.02bn. Its diluted EPS stood at R0.13, compared with R0.18 recorded in the corresponding period of the previous year.
- Adcorp Holdings (JO: ADRJ ) Limited: The workplace solutions company, in its 1H22 results, revealed that its revenue declined from the same period of the preceding year to R5.78bn. Its diluted EPS stood at 27.90c, compared with 36.00c recorded in the corresponding period of the previous year.
- Datatec (JO: DTCJ ) Limited: The information technology company, in its 1H22 results, reported that its revenue advanced 15.0% from the same period of the preceding year to $2.26bn. Its diluted EPS stood at $6.10, compared with $1.60 recorded in the corresponding period of the previous year.
- Oil slumps to two-week low as US crude stocks pile up: Oil prices slumped to their lowest level in two weeks after official figures showed a surprise jump in US inventories of crude, and rising cases of Covid-19 in Europe, Russia and some outbreaks of infections in China dented hopes for an economic recovery.
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