SOUTH AFRICA MARKET REVIEW
- South African markets closed in the red on Friday, as investors continue to monitor developments amid the persistent war between Russia and Ukraine.
- Platinum miners, Impala Platinum (JO:IMPJ) Holdings, Northam (JO:NHMJ) Platinum and Anglo American (JO:AMSJ) Platinum declined 4.8%, 3.6% and 3.5%, respectively.
- Gold miners, Sibanye-Stillwater, AngloGold Ashanti (JO:ANGJ) and Gold Fields (JO:GFIJ) shed 4.1%, 3.0% and 2.4%, respectively.
- Real estate property companies, Emira Property Fund (JO:EMIJ), Growthpoint Properties (JO:GRTJ) and Fortress REIT dropped 4.1%, 1.9% and 1.8%, respectively.
- Retailers, Clicks (JO:CLSJ) Group, Massmart Holdings (JO:MSMJ) and Cie Financiere Richemont (JO:CFRJ) S.A. eased 2.4%, 1.4% and 1.3%, respectively.
- On the flipside, financial companies, Absa (JO:ABGJ) Group, Nedbank Group (JO:NEDJ) and Capitec Bank (JO:CPIJ) Holdings advanced 4.0%, 2.6% and 1.6%, respectively.
- The JSE All Share index declined 0.3% to close at 73,685.89.
- The UK market finished firmer on Friday, as Britain’s better than expected January gross domestic product (GDP) boosted investor sentiment.
- Pearson surged 18.0%, after US asset manager, Apollo Global Management confirmed that it was in the preliminary stages of evaluating a possible cash offer for the company.
- Ocado (LON:OCDO) Group advanced 1.5%, after the International Trade Commission rejected patent infringement claims made against the company by Norwegian warehouse robot maker, AutoStore.
- Berkeley Group (LON:BKGH) Holdings gained 1.3%, after the housebuilder said that it was on track to meet its FY21 earnings guidance as it continues to trade "robustly" since 1 November 2021.
- On the contrary, miners, Evraz and Fresnillo (LON:FRES) declined 12.6% and 4.7%, respectively.
- The FTSE 100 index advanced 0.8% to close at 7,155.64.
US MARKET REVIEW
- US markets ended lower on Friday, after the US President, Joe Biden suggested for a suspension of normal trade relations with Russia as a part of sanctions meant to economically isolate Moscow for its unprovoked attack in Ukraine.
- Technology companies, Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT) and Intel (NASDAQ:INTC) declined 2.4%, 1.9% and 1.8%, respectively.
- Insurance companies, UnitedHealth Group (NYSE:UNH) and American Express (NYSE:AXP) shed 1.5% and 1.0%, respectively.
- Financial services companies, JPMorgan Chase (NYSE:JPM) & Company, Goldman Sachs Group (NYSE:GS) and Visa (NYSE:V) eased 2.3%, 0.9% and 0.6%, respectively.
- On the other hand, pharmaceutical companies, Amgen (NASDAQ:AMGN) and Merck & Company advanced 0.8% and 0.5%, respectively.
- The S&P 500 index fell 1.3% to settle at 4,204.31, while the DJIA index declined 0.7% to close at 32,944.19.
- The NASDAQ index eased 2.2% to end the trading session at 12,843.81.
ASIA MARKET REVIEW
- Asian markets are trading mostly lower this morning, as investors cast worries amid a surge in Covid-19 infections in China and the persistent Russia-Ukraine war.
- In Japan, processed food company, Nisshin Seifun Group Inc. (T:2002) has soared 6.8%.
- On the flipside, Osaka Gas Company (T:9532) has shed 4.7%.
- In Hong Kong, e-commerce company, JD.com has plunged 12.8%.
- On the other hand, financial sector firm, Hang Seng Bank (HK:0011) has advanced 1.7%.
- In South Korea, SsangYong Motor (KS:003620) Company has plummeted 19.2%.
- Meanwhile, Central Insight Company has soared 18.3%.
- The Nikkei 225 index is trading 0.7% higher at 25,340.81.
- The Hang Seng index has declined 3.7% to trade at 19,791.00, while the KOSPI index is trading 0.9% lower at 2,637.84.
COMMODITIES
- At 06:00 SAST today, Brent spot prices fell 1.7% to trade at $114.58/bl, reversing previous session’s gains.
- On Friday, Brent spot prices rose 2.1% to settle at $116.59/bl, amid hopes for a potential improvement to the supply outlook that has been disrupted by Russia's invasion of Ukraine. Meanwhile, supply concerns had intensified, after talks to revive the 2015 Iran nuclear deal faced the threat of collapse after a last-minute Russian demand forced world powers to pause negotiations. Baker Hughes reported that the number of US oil and gas rig count rose by 13 to 663 for the week ended 11 March, its highest since April 2020.
- On Friday, the Illinois North Central No.2 Yellow corn spot prices rose 0.9% to $7.36/bushel.
- At 06:00 SAST today, gold prices declined 0.7% to trade at $1,975.45/oz. On Friday, gold declined 0.4% to close at $1,988.46/oz, following Russian President, Vladimir Putin’s comment that there had been progress in talks with Ukraine, and the likelihood of a looming US rate hike dented demand for the metal.
- On Friday, copper rose 0.6% to close at $10,150.75/mt. Aluminium closed 1.5% higher at $3,459.50/mt.
CURRENCIES
- On Friday, the South African rand weakened against the US dollar. In the US, consumer sentiment dropped more than expected in early March, to its lowest in 11 years, amid a surge in gasoline prices to a record high following Russia's war against Ukraine, boosting one-year inflation expectations to the highest level since 1981. Meanwhile, the US President, Joe Biden called for an end of normal trade relations with Russia over its invasion of Ukraine and acknowledged the economic hardship the world will endure as it aims to isolate Russia by revoking its most-favored nation trade status, which the President says will make it even harder for Moscow to do business. Biden said Western nations were showing restraint to avoid starting World War III.
- The yield on benchmark government bonds fell on Friday. The yield on 2026 bond fell to 8.32%. Further, the yield on 2023 bond declined to 5.47%, while that for the longer-dated 2030 issue fell to 9.71%.
- At 06:00 SAST, the US dollar is trading 0.4% higher against the South African rand at R15.1054, while the euro is trading 0.4% higher at R16.4747. At 06:00 SAST, the British pound has gained 0.3% against the South African rand to trade at R19.6588.
- On Friday, the euro declined against most of the major currencies. In Germany, inflation remained steady in February. In the UK, economic growth data came in better than expected in January, rebounding from its coronavirus-related pause in late 2021.
- At 06:00 SAST, the euro slipped 0.1% against the US dollar to trade at $1.0904, while it has gained 0.1% against the British pound to trade at GBP0.8379.
ECONOMIC UPDATES
- In January, manufacturing production rose 0.8% on a monthly basis in the UK, higher than market expectations of a rise of 0.2%. In the prior month, manufacturing production had advanced 0.2%.
- Visible trade deficit in the UK widened to GBP26.49bn in January. UK had registered a visible trade deficit of GBP12.35bn in the previous month.
- In the UK, industrial production registered a rise of 2.3% in January on a YoY basis, higher than market expectations of a rise of 1.9%. In the previous month, industrial production had advanced 0.4%.
- On a MoM basis, the index of services in the UK advanced 0.8% in January. The index of services had registered a drop of 0.5% in the previous month.
- On a monthly basis, construction output rose 1.1% in January, in the UK. Construction output had recorded a rise of 2.0% in the prior month.
- GDP in the UK registered a rise of 0.8% in January on a monthly basis. GDP had dropped 0.2% in the prior month.
- The final consumer price index (CPI) recorded a rise of 0.8% in Spain on a MoM basis in February, compared to a fall of 0.4% in the prior month. Markets were anticipating the CPI to rise 0.6%. The preliminary figures had recorded an advance of 0.6%.
- In 4Q21, the unemployment rate in Italy remained flat at 9.1%. In the prior quarter, the unemployment rate had recorded a revised similar reading of 9.1%.
- The final CPI advanced 0.9% on a MoM basis in February, in Germany, compared to a rise of 0.4% in the prior month. The preliminary figures had also recorded an advance of 0.9%. Market anticipations were for the CPI to climb 0.9%.
- In the US, the flash Reuters/Michigan consumer sentiment index recorded a drop to 59.70 in March, higher than market expectations of a drop to a level of 61.30. In the prior month, the Reuters/Michigan consumer sentiment index had registered a level of 62.80.
- The unemployment rate recorded a drop to 5.5% in Canada, in February, compared to a reading of 6.5% in the prior month. Market anticipations were for the unemployment rate to ease to 6.2%.
CORPORATE UPDATES
SOUTH AFRICA
- Mondi Plc (LON:MNDI): The paper and packaging company, in its voluntary update on its Russian business activities, revealed that the group also has three converting plants in Russia. All these facilities primarily serve the domestic market and have continued to operate through this time of heightened geopolitical tension.
- Standard Bank (JO:SBKJ) Group Limited: The banking company, in its FY21 results, indicated that its revenue rose to R132.98bn from R123.67bn posted in the previous year. Its diluted EPS increased 100.7% from the prior year to R15.55.
- SA Corporate Real Estate Limited: The real estate investment trust company, in its FY21 trading statement, stated that it expects its distributable income to increase by more than 6.0% as compared to the prior year and the group’s robust financial position will enable a normalised pay-out ratio and distribution per share to be between 21.00c and 23.00c per share, representing an increase of between 17.0% and 28.0% compared to 17.93c share for the prior year ended 31 December 2020.
- Oil steadies as supply concerns ease: Oil prices stabilised and were on track for their biggest weekly drops since November after see-sawing on fears of escalating bans on Russian oil versus efforts to bring more supply to market from other major producers.