SOUTH AFRICA MARKET REVIEW
- South African markets closed in the green yesterday, as broad based gains in retail and gold mining sector stocks boosted investor sentiment.
- Retailers, Cashbuild (JO:CSBJ), Mr Price Group (JO:MRPJ) and Steinhoff International Holdings (JO:SNHJ) N.V. soared 5.2%, 2.0% and 1.1%, respectively.
- Gold miners, Gold Fields (JO:GFIJ), AngloGold Ashanti (JO:ANGJ) and Harmony Gold Mining Company gained 3.6%, 3.5% and 1.6%, respectively.
- Real estate property companies, Attacq (JO:ATTJ), Dipula Income Fund (JO:DIBJ) and Emira Property Fund (JO:EMIJ) added 3.3%, 1.9% and 1.2%, respectively.
- Bankers, FirstRand (JO:FSRJ), Absa (JO:ABGJ) Group and Capitec Bank (JO:CPIJ) Holdings advanced 2.8%, 1.9% and 1.6%, respectively.
- On the flipside, market heavyweight, Naspers (JO:NPNJn) shed 1.2%.
- The JSE All Share index advanced 0.5% to close at 76,090.52.
- The UK market finished weaker yesterday, dragged down by weaker corporate earnings.
- Ocado (LON:OCDO) Group plummeted 12.9%, after the online supermarket company reported a rise in its FY21 loss, following increased investment in its solutions business and after it warned of a decline in its FY22 earnings.
- BP (LON:BP) decline 2.4%, as the company warned of lower production and flat refining margins in 1Q22, despite reporting huge FY21 profits, driven by surging oil and gas prices.
- DCC shed 2.6%, despite reporting 3Q22 profits that were in line with market expectations, amid growth in sales and its marketing group's energy and healthcare businesses.
- However, travel and leisure companies, International Consolidated Airlines Group (LON:ICAG) S.A. and InterContinental Hotels Group (LON:IHG) advanced 3.8% and 2.4%, respectively.
- The FTSE 100 index declined 0.1% to close at 7,567.07.
US MARKET REVIEW
- US markets ended higher yesterday, buoyed by robust corporate earnings.
- Norwegian Cruise Line Holdings (NYSE:NCLH) advanced 3.6%, after the company stated that it expects to be in profits in 2H22, despite delaying its timing to be cash flow positive as the Omicron variant hurt bookings.
- Nvidia Corporation gained 1.5%, after the company dropped its planned $40.00bn acquisition of microchip designer, Arm Holdings from Japanese investor, SoftBank amid regulatory opposition.
- On the contrary, Pfizer (NYSE:PFE) shed 2.8%, after the pharmaceutical company reported better than expected FY21 profits but missed on revenues.
- The S&P 500 index rose 0.8% to settle at 4,521.54, while the DJIA index advanced 1.1% to close at 35,462.78.
- The NASDAQ index climbed 1.3% to end the trading session at 14,194.46.
ASIA MARKET REVIEW
- Asian markets are trading higher this morning, tracking overnight gains on Wall Street.
- In Japan, market heavyweight, SoftBank Group has advanced 4.8%.
- On the other hand, banking company, Shinsei Bank has declined 2.1%.
- In Hong Kong, sports products company, Anta Sports Products (HK:2020) has surged 5.8%.
- Meanwhile, Sands China (HK:1928) has eased 0.9%. In South Korea, electronics company, LG Electronics (KS:066570) has advanced 2.4%.
- On the contrary, automobile company, SsangYong Motor (KS:003620) Company has plunged 19.2%.
- The Nikkei 225 index is trading 1.1% higher at 27,589.25.
- The Hang Seng index has advanced 2.1% to trade at 24,829.36, while the Kospi index is trading 0.7% higher at 2,764.70.
COMMODITIES
- At 06:00 SAST today, Brent spot prices fell 1.3% to trade at $92.66/bl, extending previous session’s losses.
- Yesterday, Brent spot prices fell 2.1% to settle at $93.92/bl, following the resumption of indirect talks between the US and Iran to revive an international nuclear agreement and to allow more oil exports from the OPEC+ producer. This deal could return more than 1.00mn bls per day (bpd) of Iranian oil to the market, boosting global supply by about 1.0%. Meanwhile, the American Petroleum Institute (API) reported that crude oil inventories declined by 2.00mn bls for the week ended 4 February.
- Yesterday, the Illinois North Central No.2 Yellow corn spot prices fell 0.5% to $6.16/bushel.
- At 06:00 SAST today, gold prices advanced 0.1% to trade at $1,828.06/oz. Yesterday, gold gained 0.3% to close at $1,825.92/oz, as soaring inflation and a weaker greenback gave a boost to the safe haven yellow metal.
- Yesterday, copper marginally rose to close at $9,809.25/mt. Aluminium closed 1.3% higher at $3,214.50/mt.
CURRENCIES
- Yesterday, the South African rand strengthened against the US dollar. In the US, small business confidence dropped to an 11-month low in January, amid persistent labour constraints and higher prices for raw materials. The US trade deficit expanded to a record high in 2021, as imports increased sharply amid the restocking of shelves by businesses to meet robust domestic demand.
- The yield on benchmark government bonds fell yesterday. The yield on 2026 bond fell to 7.77%. Further, the yield on 2023 bond declined to 5.32%, while that for the longer-dated 2030 issue fell to 9.32%.
- At 06:00 SAST, the US dollar is trading marginally higher against the South African rand at R15.357, while the euro is trading 0.2% higher at R17.5548. At 06:00 SAST, the British pound has gained 0.1% against the South African rand to trade at R20.8236.
- Yesterday, the euro declined against most of the major currencies. The US and Germany are working in “lockstep” to deter Russian “aggression” in Europe, US President Joe Biden has said, as he met with German Chancellor Olaf Scholz. The meeting came hours after the US and the European Union (EU) expressed “firm support for a strong and resilient Ukraine” following a meeting of the US-EU Energy Council.
- At 06:00 SAST, the euro advanced 0.1% against the US dollar to trade at $1.143, while it has marginally gained against the British pound to trade at GBP0.843.
ECONOMIC UPDATES
- Trade deficit in France rose to EUR11.30bn in December, following a trade deficit of EUR9.80bn in the prior month.
- France had registered current account deficit of EUR7.10bn in December, compared with a current account deficit of EUR3.60bn in the prior month.
- In December, on a monthly basis, the seasonally adjusted retail sales in Italy advanced 0.9%. Retail sales had dropped 0.4% in the prior month.
- The small business optimism index dropped to 97.10 in the US, in January, compared with a level of 98.90 in the prior month.
- The trade deficit in the US rose to $80.70bn in December, compared with market expectations of a trade deficit of $83.00bn. The US had registered a trade deficit of $79.30bn in the prior month.
- The economic optimism index dropped to 44.00 in February, in the US. In the previous month, the economic optimism index had recorded a level of 44.70.
CORPORATE UPDATES
SOUTH AFRICA
- Sasol (JO:SOLJ) Limited: The chemical company, in its 1H22 trading statement, indicated that it expects its EPS to be between R22.81 and R25.15, as compared with R23.41 posted in the corresponding period of the previous year. It expects its HEPS to be between R14.25 and R16.17, as compared with R19.16 recorded in the same period of the prior year.
- RCL Foods Limited: The food company, in its 1H22 trading update, reported that it expects EPS to be between 70.00c and 77.00c as compared with 61.60c reported in the same period of the preceding year. It expects its HEPS to be between 69.00c and 76.00c as compared with 59.70c posted in the same period of the previous year.
- Telkom (JO:TKGJ) case against Icasa set for mid-April: Telkom’s court challenge to the telecommunications industry regulator’s spectrum auction will be heard in mid-April, risking yet another delay in opening SA’s airwaves and the rollout of 5G technology.