Mining, Banking and Commodity Overview

  • Market Overview

SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the green yesterday, buoyed by broad based gains in mining and retail sector stocks.
  • Mining company, Sibanye Stillwater (JO: SSWJ ) gained 2.6%, after the company announced its acquisition of two Brazilian mining companies for $1.00bn.
  • Retailers, Cie Financiere Richemont SA (JO: CFRJ ), Cashbuild (JO: CSBJ ) and Clicks (JO: CLSJ ) Group advanced 2.7%, 1.9% and 1.6%, respectively.
  • Banking firms, FirstRand (JO: FSRJ ), Absa (JO: ABGJ ) Group and Capitec Bank (JO: CPIJ ) Holdings added 1.4%, 1.0% and 0.7%, respectively.
  • On the flipside, real estate property sector companies, Accelerate Property Fund (JO: APFJ ), Attacq (JO: ATTJ ) and Capital & Regional (JO: CRPJ ) shed 2.3%, 1.7% and 1.3%, respectively.
  • Meanwhile, peer, Capital & Counties Properties (JO: CCOJ ) rose 0.2%.
  • The JSE All Share index advanced 0.9% to close at 67,615.31.

UK MARKET REVIEW

  • The UK market finished firmer yesterday, buoyed by the release of upbeat 3Q21 earnings.
  • Reckitt Benckiser Group (LON: PSN ) soared 5.8%, after the company reported an increase in its 3Q21 revenue and raised its FY21 earnings guidance.
  • Whitbread (LON: WTB ) advanced 4.4%, after the restaurant company reported a less than expected 1H21 loss, following a rebound in its room revenues.
  • InterContinental Hotels Group (LON: IHG ) added 2.6%.
  • On the flipside, Entain plunged 6.3%, after DraftKings (NASDAQ: DKNG ) withdrew its proposed acquisition offer for the company.
  • Polymetal International shed 3.1%, after reporting a drop in its 3Q21 gold production.
  • The FTSE 100 index advanced 0.8% to close at 7,277.62.

US MARKET REVIEW

  • US markets ended higher yesterday, as robust 3Q21 corporate earnings buoyed investor morale.
  • United Parcel Service (NYSE: UPS ) surged 7.0%, after reporting better than expected 3Q21 results in all its business segments.
  • Eli Lilly (NYSE: LLY ) & Co. rose 1.4%, after the company reported better than expected 3Q21 sales.
  • General Electric (NYSE: GE ) added 2.0%, after the company reported more than expected 3Q21 profits and industrial free cash flows and raised its FY21 earnings guidance.
  • On the contrary, Lockheed Martin (NYSE: LMT ) plummeted 11.8%, after the company reported weaker 3Q21 profit and sales.
  • 3M (NYSE: MMM ) dipped 0.1%, despite reporting robust 3Q21 profits.
  • The S&P 500 index rose 0.2% to settle at 4,574.79, while the DJIA index marginally advanced to close at 35,756.88.
  • The NASDAQ index climbed 0.1% to end the trading session at 15,235.71.

ASIA MARKET REVIEW

  • Asian markets are trading lower this morning, after Hui Ka Yan, the founder of China Evergrande Group, was urged by government authorities to use his own wealth to help solve the company’s deepening debt crisis.
  • In Japan, transport company, Kawasaki Kisen Kaisha (T: 9107 ) has shed 4.2%.
  • On the flipside, Nitto Denko (T: 6988 ) has jumped 6.4%.
  • In Hong Kong, delivery company, Meituan (HK: 3690 ) has declined 4.6%.
  • On the contrary, investment holding company, Longfor Group Holdings has gained 1.2%.
  • In South Korea, technology company, LG Electronics (KS: 066570 ) has eased 2.8%.
  • On the flipside, HSD Engine (KS: 082740 ) has surged 9.3%.
  • The Nikkei 225 index is trading 0.6% lower at 28,927.23.
  • The Hang Seng index has dropped 1.6% to trade at 25,617.60, while the Kospi index is trading 0.9% lower at 3,022.44.

COMMODITIES

  • At 06:00 SAST today, Brent spot prices fell 0.3% to trade at $85.31/bl. amid an unexpected increase in US crude oil inventories.
  • Yesterday, Brent spot prices rose 0.2% to settle at $85.54/bl, amid supply scarcities and stronger US oil demand. However, the American Petroleum Institute reported that crude oil inventories rose by 2.30mn bls for the week ended 22 October.
  • Yesterday, the Illinois North Central No.2 Yellow corn spot prices rose 1.1% to $5.10/bushel.
  • At 06:00 SAST today, gold prices declined 0.2% to trade at $1,788.55/oz. Yesterday, gold declined 0.8% to close at $1,792.91/oz, as strength in the greenback buoyed by robust corporate earnings dented demand for the safe haven yellow metal.
  • Yesterday, copper declined 1.1% to close at $9,955.50/mt. Aluminium closed 1.6% lower at $2,816.50/mt.

CURRENCIES

  • Yesterday, the South African rand weakened against the US dollar. In the US, consumer confidence increased in October, as consumers shrug off inflation fears amid improvement in the domestic labour market, thus indicating towards an uptick in economic growth. New home sales in the US advanced more than expected in September. However, the S&P/Case-Shiller Home Price rose less than expected in August. The Richmond Fed Manufacturing index advanced more than expected in October.
  • The yield on benchmark government bonds mostly fell yesterday. The yield on 2026 bond fell to 7.95%. Further, the yield on 2023 bond advanced to 5.42%, while that for the longer-dated 2030 issue fell to 9.49%.
  • At 06:00 SAST, the US dollar is trading marginally lower against the South African rand at R14.8495, while the euro is trading 0.1% higher at R17.2259. At 06:00 SAST, the British pound has gained 0.1% against the South African rand to trade at R20.4532.
  • Yesterday, the euro declined against most of the major currencies. Meanwhile, the European Central Bank (ECB) President, Christine Lagarde is expected this week to push back against a growing belief among investors that the ECB is underestimating future inflation, and that the central bank could raise interest rates next year.
  • At 06:00 SAST, the euro marginally advanced against the US dollar to trade at $1.1599, while it has marginally weakened against the British pound to trade at GBP0.8422.

ECONOMIC UPDATES

  • The BRC shop price index registered a drop of 0.4% in the UK on an annual basis, in October. The BRC shop price index had recorded a drop of 0.5% in the previous month.
  • In Spain, the producer price index (PPI) climbed 5.2% in September on a monthly basis. In the previous month, the PPI had climbed by a revised 1.8%.
  • The housing price index in the US climbed 1.0% on a monthly basis, in August. The housing price index had recorded a rise of 1.4% in the prior month.
  • In August, on a monthly basis, the seasonally adjusted S&P/Case-Shiller composite index of 20 metropolitan areas in the US climbed 1.2%. The S&P/Case-Shiller composite index of 20 metropolitan areas had registered a rise of 1.55% in the prior month.
  • In October, the Richmond Fed manufacturing index climbed to 12.00 in the US. In the previous month, the Richmond Fed manufacturing index had registered a reading of -3.00.
  • The CB consumer confidence index in the US recorded an unexpected rise to a level of 113.80 in October, compared with a revised reading of 109.80 in the previous month.
  • In the US, new home sales rose 14.0% in September on a monthly basis. In the prior month, new home sales had recorded a revised drop of 1.4%.
  • In September, on a YoY basis, industrial profits climbed 16.3% in China. In the prior month, industrial profits had recorded a rise of 10.1%.
  • On a YoY basis in 3Q21, the consumer price index (CPI) advanced 3.0% in Australia, less than market expectations for an advance of 3.1%. The CPI had advanced 3.8% in the prior quarter.
  • The trade deficit in New Zealand widened to NZD2.17bn in September, following a trade deficit of NZD2.14bn in the previous month.

CORPORATE UPDATES

SOUTH AFRICA

  • Tiger Brands Limited (JO: TBSJ ): The packaged goods company, in its FY21 trading statement, revealed that it expects its EPS to be between 80.0% and 90.0% higher as compared with the 612.00c recorded in the previous year. It expects its HEPS from total operations to be between 15.0% and 25.0% higher than the 940.00c posted in the prior year.
  • Sibanye Stillwater Limited (JO: SSWJ ): The mining company announced that it has signed definitive purchase and sale agreements with affiliates of funds advised by Appian Capital Advisory LLP to purchase 100.0% of both the Santa Rita nickel mine and the Serrote copper mine, located in Brazil, for a cash consideration of $1.00bn and a 5.0% net smelter return royalty over potential future underground production at Santa Rita
  • Delta Property Fund Limited (JO: DLTJ ): The real estate investment trust company announced that it has entered into an agreement with The Independent Institute of Education Proprietary Limited T/A Property Division, represented by Jean Didier Raico Oesch and/or Vongani Pilate Mbhokota, to dispose of its property situated at Corner of Pretorius and Thabu Sehume Streets, Pretoria, together with all buildings and improvements thereon, as more commonly known as “Delta House”, including the rental enterprise conducted thereon for a cash consideration of R74.00mn. The net proceeds of R72.50mn will be utilised by the company to reduce the Loan to Value from 56.5% to 55.3% and to reduce vacancy levels by 0.6% from 23.6% to 22.9%.
  • Oil rally likely to continue on strong US demand: Oil prices edged higher after trading down earlier, looking set to sustain a rally driven by strong demand in the US, the world’s biggest consumer of oil and its products.

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