Market Update: SA Markets Closed In Red, Mining Companies Advanced

  • Market Overview

SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the red yesterday, as concerns over rising COVID-19 cases in China and continued global inflation pressures dampened investor morale.
  • Gold mining companies, Gold Fields (JO: GFIJ ), Harmony Gold Mining and AngloGold Ashanti (JO: ANGJ ) shed 2.6%, 2.0% and 1.0%, respectively.
  • Real estate property sector companies, Emira Property Fund (JO: EMIJ ) and Attacq (JO: ATTJ ) declined 1.8% and 1.4%, respectively.
  • However, peer, Delta Property Fund (JO: DLTJ ) surged 10.4%.
  • On the flipside, platinum mining companies, Anglo American (JO: AMSJ ) Platinum, Royal Bafokeng Platinum (JO: RBPCBe ) and Impala Platinum Holdings (JO: IMPJ ) advanced 2.8%, 1.8% and 0.5%, respectively.
  • Banking firms, Absa Group (JO: ABGJ ), Capitec Bank Holdings (JO: CPIJ ) and Standard Bank Group (JO: SBKJ ) added 1.3%, 1.1% and 0.7%, respectively.
  • The JSE All Share index declined 0.1% to close at 66,980.45.

UK MARKET REVIEW

  • The UK market finished firmer yesterday, buoyed by broad-based gains in mining and banking sector stocks.
  • Mining companies, Antofagasta (LON: ANTO ), BHP Group (JO: BHPJ ) and Rio Tinto (LON: RIO ) advanced 3.0%, 2.8% and 2.0%, respectively.
  • Banking company, HSBC Holdings (LON: HSBA ) climbed 1.9%, after the company reported better than expected 3Q21 profits, and revealed its plans for a share buyback of up to $2.00bn.
  • Retail companies, Associated British Foods (LON: ABF ), Tesco (LON: TSCO ) and J Sainsbury (OTC: JSAIY ) added 1.4%, 1.1% and 0.8%, respectively.
  • On the flipside, ITV (LON: ITV ) shed 1.1%, on the back of news that the broadcasting company plans to buy state owned Channel 4.
  • The FTSE 100 index advanced 0.3% to close at 7,222.82.

US MARKET REVIEW

  • US markets ended higher yesterday, buoyed by the release of robust domestic 3Q21 corporate earnings.
  • Electric carmaker, Tesla (NASDAQ: TSLA ) surged 12.7%, after Hertz Global Holdings (OTC: HTZZ ) announced its plans to order 100,000 Tesla electric vehicles (EV), as part of its objective to offer the largest EV rental fleet in North America.
  • Supermarket company, Walmart (NYSE: WMT ) advanced 1.2%. Financial services company, Visa (NYSE: V ) added 1.2%.
  • On the contrary, Kimberly-Clark (NYSE: KMB ) shed 2.2%, after the company reported a less than expected increase in its 3Q21 earnings.
  • The S&P 500 index rose 0.5% to settle at 4,566.48, while the DJIA index advanced 0.2% to close at 35,741.15.
  • The NASDAQ index climbed 0.9% to end the trading session at 15,226.71.

ASIA MARKET REVIEW

  • Asian markets are trading mostly higher this morning, tracking overnight gains on Wall Street.
  • In Japan, technology company, Panasonic (T: 6752 ) has added 4.2%. On the flipside, electronics company, Seiko Epson Corporation has shed 4.4%.
  • In Hong Kong, pharmaceutical company, Sino Biopharmaceutical Ltd (HK: 1177 ) has dropped 2.5%.
  • On the contrary, banking company, HSBC Holdings PLC (HK: 0005 ) has added 1.1%.
  • In South Korea, technology company, LG Electronics (KS: 066570 ) has added 0.8%.
  • On the flipside, security and surveillance systems manufacturer, Hitron Systems (KS: 019490 ) has plunged 5.6%.
  • The Nikkei 225 index is trading 1.8% higher at 29,105.76.
  • The Hang Seng index has declined 0.4% to trade at 26,019.67, while the Kospi index is trading 0.6% higher at 3,040.42.

COMMODITIES

  • At 06:00 SAST today, Brent spot prices rose 0.2% to trade at $85.56/bl, amid robust global crude oil demand coupled with tighter supply conditions.
  • Yesterday, Brent spot prices rose 0.4% to settle at $85.36/bl, as energy transition and strong demand predictions have led to the prospects of peak production being undertaken sooner than anticipated.
  • Yesterday, the Illinois North Central No.2 Yellow corn spot prices fell 0.1% to $5.05/bushel.
  • At 06:00 SAST today, gold prices declined 0.2% to trade at $1,804.60/oz. Yesterday, gold gained 0.8% to close at $1,807.73/oz, as a weaker greenback and concerns about rising global inflation gave a boost to the safe haven yellow metal.
  • Yesterday, copper rose 2.2% to close at $10,070.75/mt. Aluminium closed 0.3% higher at $2,863.25/mt.

CURRENCIES

  • Yesterday, the South African rand strengthened against the US dollar. In the US, the economy grew at a slower pace in September, amid labour constraints and production disruptions, as per the Federal Reserve Bank of Chicago. Also, factory output decelerated in October amid supply chain disruptions.
  • The yield on benchmark government bonds fell yesterday. The yield on 2026 bond fell to 5.42%. Further, the yield on 2023 bond declined to 9.53%, while that for the longer-dated 2030 issue fell to 7.98%.
  • At 06:00 SAST, the US dollar is trading 0.1% lower against the South African rand at R14.6980, while the euro is trading 0.2% lower at R17.0514. At 06:00 SAST, the British pound has declined 0.1% against the South African rand to trade at R20.2333.
  • Yesterday, the euro declined against most of the major currencies. In Germany, business confidence weakened in October, as supply bottlenecks in manufacturing, rising energy prices, and rising COVID-19 infections slowed the pace of recovery in the economy.
  • At 06:00 SAST, the euro slipped 0.1% against the US dollar to trade at $1.1601, while it has weakened 0.1% against the British pound to trade at GBP0.8428.

ECONOMIC UPDATES

  • The Ifo business climate index eased to 97.70 in October, in Germany, higher than market expectations of a drop to 97.90. In the prior month, the Ifo business climate index had registered a revised level of 98.90.
  • In October, the Ifo current assessment index in Germany dropped to 100.10, less than market expectations for a drop to a level of 99.40. The Ifo current assessment index had registered a level of 100.40 in the prior month.
  • The Ifo business expectations index registered a drop to 95.40 in October, in Germany, more than market expectations for a drop to 96.40. In the prior month, the Ifo business expectations index had recorded a revised level of 97.40.
  • In September, the Chicago Fed national activity index in the US fell to a level of -0.13, compared with a revised level of 0.05 in the previous month.
  • The Dallas Fed manufacturing business index in the US climbed to 14.60 in October, compared with a level of 4.60 in the previous month.
  • The corporate service price index in Japan recorded a rise of 0.9% on an annual basis, in September. In the previous month, the corporate service price index had registered a rise of 1.0%

CORPORATE UPDATES

SOUTH AFRICA

  • Royal Bafokeng Platinum Ltd (JO: RBPJ ): The platinum mining company, in its 3Q21 production report, indicated that it achieved record 4E ounce production of 127.00koz for the reporting period. This has been underpinned by steady BRPM performance and an improved Styldrift performance, marginally offset by lower grades and concentrator recoveries. Total tonnes hoisted for the reporting period increased by 3.5% to 1,340.00kt, whilst total tonnes milled increased by 7.7% to 1,248.00kt. Closing surface stocks at the end of the reporting period are estimated at 228.00kt.
  • Mix Telematics Limited: The software company, in its 1H22 trading statement, revealed that it expects its EPS and HEPS to be between 11.00c and 14.00c, between 22.0% to 39.0% lower as compared with the 18.00c recorded in the corresponding previous year.
  • Rebosis Property Fund Ltd (JO: REAJ ): The real estate investment trust company announced that Dr Sisa Ngebulana has decided to step down and retire as Chief Executive Officer (CEO) and from the Board with effect from 1 December 2021, as was planned with the Board. The company announced the appointment of Mr. Otis Tshabalala as CEO with effect from 1 December 2021.
  • Oil at multiyear highs on tight supply and rising demand: Oil prices extended pre-weekend gains to hit multiyear highs, lifted by tight global supply and strengthening fuel demand in the US and beyond as economies recover from pandemic-induced slumps.

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