Market Review: Rebosis, Blue Label, Libstar Holdings

  • Market Overview
  • Editor's Pick

SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the red on Friday, pulled down by losses in financial sector stocks and as the release of weaker-than-expected US employment data dampened investor sentiment.
  • Ninety One and PSG Konsult (JO: KSTJ ) dropped 6.3% and 2.5%, respectively. Mining sector companies, Thungela Resources (JO: TGAJ ) and Harmony Gold Mining declined 5.6% and 4.7%, respectively.
  • However, peer, Anglo American (JO: AMSJ ) climbed 1.8%.
  • On the other hand, real estate property sector stocks, Fortress REIT and Arrowhead Properties (JO: AHAJ ) advanced 2.3% and 1.5%, respectively.
  • Consumer goods companies, Libstar Holdings Ltd (JO: LBRJ ) and AVI gained 2.1% and 1.5%, respectively.
  • Moreover, telecom company, Blue Label Telecoms (JO: BLUJ ) gained 4.5%. Meanwhile, peer, MTN Group (JO: MTNJ ) lost 2.7%.
  • The JSE All Share index declined 0.3% to close at 73,939.71.

UK MARKET REVIEW

  • The UK market finished firmer on Friday, boosted by broad-based gains in mining sector stocks.
  • However, gains were capped amid the release of disappointing US payrolls data.
  • Anglo American, BHP Group (JO: BHPJ ), Rio Tinto (LON: RIO ) and Antofagasta (LON: ANTO ) climbed 2.9%, 2.7%, 2.6% and 1.9%, respectively.
  • Oil company, Royal Dutch Shell (LON: RDSa ) advanced 1.1%, after the company announced that its $7.00bn share buyback programme would continue "at pace", despite weaker oil product sales due to the Omicron variant, and currency headwinds in Turkey.
  • Peer, BP (LON: BP ) gained 2.1%. On the other hand, B&M European Value Retail (LON: BMEB ) dropped 2.2%.
  • The company had earlier announced that its FY21 profits were set to be above expectations, amid a "strong" performance over the Christmas period. The FTSE 100 index advanced 0.5% to close at 7,485.28.

US MARKET REVIEW

  • US markets ended lower on Friday, following the release of weaker-than-expected US monthly jobs data, highlighting some impact of the spread of the Omicron variant of the coronavirus on the domestic jobs market.
  • Gap dropped 2.4%, even after Kanye West announced a partnership with luxury label, Balenciaga on a Yeezy collection that will be available at Gap stores.
  • Willis Towers Watson (NASDAQ: WTW ) declined 1.2%. The company announced that it would change its Nasdaq stock ticker symbol to “WTW” from 10 January.
  • On the flipside, Boot Barn Holdings (NYSE: BOOT ) rose 0.6%, after the retailer announced better-than-expected 3Q22 results.
  • The S&P 500 index fell 0.4% to settle at 4,677.03, while the DJIA index marginally declined to close at 36,231.66.
  • The NASDAQ index eased 1.0% to end the trading session at 14,935.90.

ASIA MARKET REVIEW

  • Asian markets are trading mixed this morning, amid cautious investor sentiment ahead of the release of US inflation data later this week.
  • In Japan, markets are closed today on account of a public holiday.
  • In Hong Kong, market heavyweight, Tencent Holdings (HK: 0700 ) has climbed 1.5%, while Alibaba (NYSE: BABA ) Group Holdings has declined 1.2%.
  • In South Korea, technology company, Samsung Electronics (KS: 005930 ) has eased 0.6%, even though the company announced that it expects a significant increase in its 4Q21 operating profit, driven mainly by robust demand for server memory chips and higher margins in chip contract manufacturing.
  • On Friday, the Nikkei 225 index marginally dropped to end the session at 28,478.56.
  • Today, the Hang Seng index has climbed 0.8% to trade at 23,671.27, while the Kospi index is trading 0.9% lower at 2,926.97.

COMMODITIES

  • At 06:00 SAST today, Brent spot prices marginally fell to trade at $81.91/bl, extending the previous session’s losses. Meanwhile, oil supply resumed in Libya and Kazakhstan. Libyan production rose to 900,000 barrels per day after maintenance was completed, while some output was restored in Kazakhstan following unrest that hampered supplies last week.
  • On Friday, Brent spot prices fell 0.2% to settle at $81.92/bl, as concerns over supply due to unrest in Kazakhstan and outages in Libya, along with a US jobs report that missed expectations and its potential impact on US Federal Reserve policy dampened sentiment.
  • On Friday, the Illinois North Central No.2 Yellow corn spot prices rose 0.6% to $5.91/bushel.
  • At 06:00 SAST today, gold prices declined 0.2% to trade at $1,792.16/oz. On Friday, gold gained 0.3% to close at $1,796.55/oz, as the release of disappointing US jobs data dampened investor risk sentiment and boosted demand for the safe haven yellow metal.
  • On Friday, copper rose 1.6% to close at $9,692.00/mt. Aluminium closed 0.2% lower at $2,904.25/mt.

CURRENCIES

  • On Friday, the South African rand strengthened against the US dollar. In South Africa, factory activity expanded at a slower pace in December, as new sales orders and employment edged lower. However, it remained in expansionary territory. In the US, non-farm payrolls increased much less than anticipated, raising the likelihood that the US Fed would kick off its policy normalisation sooner than expected. However, unemployment rate fell sharply, while wages climbed, a sign that companies are competing fiercely to fill their open jobs.
  • The yield on benchmark government bonds mostly fell on Friday. The yield on 2026 bond fell to 7.88%. Further, the yield on 2023 bond advanced to 5.20%, while that for the longer-dated 2030 issue fell to 9.39%.
  • At 06:00 SAST, the US dollar is trading marginally higher against the South African rand at R15.5851, while the euro is trading 0.2% lower at R17.6698. At 06:00 SAST, the British pound has marginally declined against the South African rand to trade at R21.1669.
  • On Friday, the euro advanced against most of the major currencies. In the eurozone, retail sales climbed, driven by in-store non-food purchases, indicating that consumer demand was healthy even as new pandemic-related restrictions were implemented. Meanwhile, the trading bloc’s inflation rate hit a record high in December as the economy came under renewed stress amid surging Omicron infections and tighter restrictions. Further, confidence among the eurozone's consumers and businesses fell to a 7-month low in December.
  • At 06:00 SAST, the euro slipped 0.2% against the US dollar to trade at $1.1338, while it has weakened 0.2% against the British pound to trade at GBP0.8346.

ECONOMIC UPDATES

  • The manufacturing PMI fell to a level of 54.10 in December, in South Africa, compared to a reading of 57.20 in the prior month.
  • Gross gold & forex reserve fell to a level of $57.59bn in South Africa, in December. In the prior month, gross gold & forex reserve had recorded a level of $57.62bn.
  • In South Africa, the net gold & forex reserves recorded a rise to $55.31bn in December. In the previous month, the net gold & forex reserves had registered a reading of $55.16bn.
  • In December, the construction PMI in the UK dropped to 54.30, compared to a level of 55.50 in the previous month. Markets had expected it to drop to a level of 54.00.
  • The Halifax house price index in the UK rose 1.1% on a monthly basis, in December. In the previous month, the Halifax house price index had advanced 1.0%.
  • The seasonally adjusted unemployment rate dropped unexpectedly to 2.4% in December, in Switzerland. Unemployment rate had registered a reading of 2.5% in the prior month.
  • France had registered trade deficit of EUR9.70bn in November, compared to a trade deficit of EUR7.60bn in the prior month.
  • In November, on an annual basis, manufacturing production in France fell 1.2%. Manufacturing production had registered a revised rise of 0.2% in the previous month.
  • Industrial production in France slid 0.5% on an annual basis, in November. In the prior month, industrial production had registered a revised drop of 0.6%.
  • In Germany, the non-seasonally & working day adjusted industrial production slid 2.4% in November on a YoY basis. In the prior month, industrial production had fallen by a revised 0.9%.
  • The seasonally adjusted trade surplus in Germany fell to EUR12.00bn in November, following a trade surplus of EUR12.80bn in the previous month.
  • On an annual basis in the eurozone, the seasonally adjusted retail sales rose 7.8% in November, more than market expectations for an advance of 5.6%. Retail sales had advanced by a revised 1.7% in the previous month.
  • The services sentiment indicator eased to 11.20 in the eurozone, in December, compared to a revised level of 18.30 in the prior month. Markets were expecting the services sentiment indicator to ease to a level of 16.00.
  • In December, the industrial confidence index advanced unexpectedly to 14.90 in the eurozone. In the previous month, the industrial confidence index had recorded a revised level of 14.30.
  • The final consumer confidence index in the eurozone dropped to -8.30 in December, in line with market expectations of a fall to a level of -8.30. In the prior month, the consumer confidence index had registered a level of -6.80. The preliminary figures had also indicated a fall to -8.30.
  • In the eurozone, the economic sentiment indicator fell to a level of 115.30 in December, higher than market expectations of a fall to a level of 116.00. In the prior month, the economic sentiment indicator had registered a revised level of 117.60.
  • In December, on an annual basis, the preliminary consumer price index (CPI) in the eurozone registered a rise of 5.0%, compared to a rise of 4.9% in the previous month. Market anticipations were for the CPI to climb 4.7%.
  • Average hourly earnings of all employees advanced 0.6% in the US on a monthly basis in December, higher than market expectations of an advance of 0.4%. Average hourly earnings of all employees had recorded a revised rise of 0.4% in the prior month.
  • In the US, unemployment rate eased to 3.9% in December, compared to a level of 4.2% in the prior month. Market anticipations were for unemployment rate to ease to 4.1%.
  • Private payrolls climbed by 211.00K in the US, in December, lower than market anticipations of an advance of 365.00K jobs. The US had registered a revised gain of 270.00K jobs in the previous month.
  • The unemployment rate registered an unexpected drop to 5.9% in December, in Canada, compared to market expectations of an unchanged reading of 6.0%. The unemployment rate had recorded a level of 6.0% in the prior month.
  • In December, the seasonally adjusted Ivey PMI in Canada dropped to 45.00, compared to a level of 61.20 in the prior month.

CORPORATE UPDATES

SOUTH AFRICA

  • Rebosis Property Fund Ltd (JO: REAJ ): The real estate investment trust company, in its FY21 results, indicated that its revenue fell to R1.67bn from R1.70bn posted in the previous year. Its diluted EPS increased 5.0% from the prior year to 292.72c.
  • MTN set for court battle with Telkom (JO: TKGJ ) over spectrum auction: Africa’s biggest wireless carrier MTN Group Ltd (JO: MTNJ ). has mounted a legal challenge against Telkom SA SOC Ltd. in bid to prevent further delays in South Africa’s long-awaited release of additional broadband spectrum.

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