SOUTH AFRICA MARKET REVIEW
- South African markets closed in the green on Friday, as investors shrugged off tensions after the US, UK and Europe imposed a new round of sanctions against Russia for its Ukraine invasion.
- Retailers, Steinhoff International Holdings (JO:SNHJ) N.V. and Cie Financiere Richemont SA (JO:CFRJ) soared 16.6% and 2.5%, respectively.
- Bankers, FirstRand (JO:FSRJ), Absa (JO:ABGJ) Group and Capitec Bank (JO:CPIJ) Holdings gained 3.1%, 2.8% and 1.6%, respectively.
- Real estate sector companies, Emira Property Fund (JO:EMIJ), Delta Property Fund (JO:DLTJ) and Capital & Counties Properties Plc (JO:CCOJ) advanced 3.0%, 1.8% and 1.5%, respectively.
- On the flipside, gold miners, Harmony Gold Mining, AngloGold Ashanti (JO:ANGJ) and Gold Fields (JO:GFIJ) plunged 9.2%, 7.4% and 6.1%, respectively.
- Platinum miners, Northam (JO:NHMJ) Platinum and Impala Platinum (JO:IMPJ) Holdings shed 4.4% and 1.9%, respectively.
- The JSE All Share index advanced 0.7% to close at 74,205.69.
- The UK market finished firmer on Friday, following western sanctions against Russia.
- Mining companies, Polymetal International (LON:POLYP), Antofagasta (LON:ANTO) and Anglo American (JO:AMSJ) skyrocketed 17.0%, 5.6% and 3.9%, respectively.
- Pearson jumped 12.1%, after the company announced its plan to launch a GBP350.00mn share buyback and stated that demand for assessment and qualification services had allowed it to hit its 2021 targets.
- Banks, Standard Chartered (LON:STAN), Lloyds Banking Group (LON:LLOY) and Barclays (LON:BARC) surged 8.7%, 6.7% and 5.3%, respectively.
- Travel and leisure companies, InterContinental Hotels Group (LON:IHG), International Consolidated Airlines Group (LON:ICAG) SA and Whitbread (LON:WTB) gained 5.2%, 4.8% and 4.0%, respectively.
- On the contrary, retailer, JD Sports Fashion (LON:JD) eased 2.1%.
- The FTSE 100 index advanced 3.9% to close at 7,489.46.
US MARKET REVIEW
- US markets ended higher on Friday, on the back of news that Russia was willing to conduct negotiations with Ukraine, citing a call summary between Russian President, Vladimir Putin and Chinese leader, Xi Jinping provided by China’s Foreign Ministry.
- Johnson & Johnson gained 5.0%, after the pharmaceutical company along with three major distributors completed nationwide settlements over their role in the opioid addiction crisis.
- Insurance companies, UnitedHealth Group (NYSE:UNH), Travelers (NYSE:TRV) and American Express (NYSE:AXP) advanced 4.4%, 4.2% and 2.9%, respectively.
- Financial companies, Goldman Sachs Group (NYSE:GS) and JPMorgan Chase (NYSE:JPM) & Company rose 2.9% and 2.4%, respectively.
- The S&P 500 index rose 2.2% to settle at 4,384.65, while the DJIA index advanced 2.5% to close at 34,058.75.
- The NASDAQ index climbed 1.6% to end the trading session at 13,694.62.
ASIA MARKET REVIEW
- Asian markets are trading mostly lower this morning, as investors monitor the Russia-Ukraine crisis and related sanctions.
- In Japan, Japan Tobacco (T:2914) has shed 2.6%. On the contrary, engineering company, Hitachi Zosen Corp. (T:7004) Corporation has advanced 3.2%.
- In Hong Kong, Geely Automobile Holdings (HK:0175) has dropped 4.0%.
- On the other hand, Netease (HK:9999) has gained 5.4%.
- In South Korea, electronics company, LG Electronics (KS:066570) has eased 1.2%.
- On the flipside, equipment manufacturing company, Doosan (KS:000150) has surged 16.2%.
- The Nikkei 225 index is trading 0.4% lower at 26,364.90.
- The Hang Seng index has declined 1.4% to trade at 22,454.12, while the Kospi index is trading 0.1% higher at 2,679.76.
COMMODITIES
- At 06:00 SAST today, Brent spot prices rose 4.2% to trade at $101.79/bl, after Russian President, Vladimir Putin put its nuclear deterrent on high alert amid increasing sanctions against the country over its invasion of Ukraine.
- On Friday, Brent spot prices fell 1.4% to settle at $97.68/bl, amid concerns over potential global supply disruptions from sanctions on major crude exporter Russia. Meanwhile, Baker Hughes reported that the number of active US oil drilling rigs climbed by 2 to 522 for the week ended 25 February. Moreover, a deal among OPEC+ oil producers including Russia is showing no cracks so far after Russia's invasion of Ukraine. Further, India is prepared to release additional crude from its national stocks in support of efforts by other major oil importers to mitigate surging global prices.
- On Friday, the Illinois North Central No.2 Yellow corn spot prices fell 5.7% to $6.40/bushel.
- At 06:00 SAST today, gold prices advanced 0.9% to trade at $1,906.62/oz. On Friday, gold declined 0.8% to close at $1,889.34/oz, as a stronger greenback dented demand for the safe haven yellow metal.
- On Friday, copper marginally declined to close at $9,918.00/mt. Aluminium closed 1.4% lower at $3,386.50/mt.
CURRENCIES
- On Friday, the South African rand strengthened against the US dollar. In the US, consumer spending increased more than expected in January, despite price pressures with annual inflation surging at rates last experienced four decades ago. The durable goods sector increased more than expected, despite worries about signs of a moderation in orders. Pending home sales dropped in January, while existing home sales increased.
- The yield on benchmark government bonds mostly fell on Friday. The yield on 2026 bond fell to 7.76%. Further, the yield on 2023 bond advanced to 5.28%, while that for the longer-dated 2030 issue fell to 9.26%.
- At 06:00 SAST, the US dollar is trading 1.5% higher against the South African rand at R15.3765, while the euro is trading 0.4% higher at R17.1495. At 06:00 SAST, the British pound has gained 1% against the South African rand to trade at R20.5276.
- On Friday, the euro declined against most of the major currencies. In Germany, the economy contracted in 4Q21 due to rising Covid-19 cases and the restrictions imposed to curb the infection. Meanwhile, in the eurozone, consumer confidence rose in February, following an ease in restrictions amid a drop in Covid-19 infections.
- At 06:00 SAST, the euro slipped 1.0% against the US dollar to trade at $1.1152, while it has weakened 0.6% against the British pound to trade at GBP0.8354.
ECONOMIC UPDATES
- The producer price index (PPI) in Spain climbed 3.8% on a MoM basis, in January. The PPI had registered a revised rise of 3.2% in the prior month.
- In February, the business confidence index eased unexpectedly to 113.40 in Italy, compared with a revised level of 113.70 in the previous month.
- On a monthly basis, consumer spending slid 1.5% in January, in France. In the prior month, consumer spending had climbed 0.2%.
- In January, on a MoM basis, the PPI in France registered a rise of 4.6%. In the previous month, the PPI had climbed by a revised 1.3%.
- On a quarterly basis, the final gross domestic product (c) advanced 0.7% in France, in 4Q21, compared with a revised advance of 3.1% in the previous quarter. Market expectations were for GDP to advance 0.7%. The preliminary figures had also recorded a rise of 0.7%.
- In France, the preliminary EU normalised consumer price index (CPI) registered a rise of 4.1% on an annual basis, in February. EU normalised CPI had advanced 3.3% in the previous month.
- In February, on a MoM basis, the flash EU normalised CPI in France advanced 0.8%. EU normalised CPI had climbed 0.2% in the prior month.
- In 4Q21, the final GDP climbed 5.4% in France on an annual basis, meeting market expectations of an advance of 5.4%. In the previous quarter, GDP had climbed by a revised 3.5%. The preliminary figures had also recorded a rise of 5.4%.
- The final GDP fell 0.3% in Germany on a quarterly basis in 4Q21, compared with a rise of 1.7% in the prior quarter. Market expectations were for GDP to ease 0.7%. The preliminary figures had indicated a drop of 0.7%.
- In the eurozone, the industrial confidence index advanced to 14.00 in February, compared with a reading of 13.90 in the previous month. Markets were expecting the industrial confidence index to advance to a level of 14.20.
- In February, the economic sentiment indicator in the eurozone advanced to 114.00, higher than market expectations of an advance to 113.10. The economic sentiment indicator had registered a level of 112.70 in the previous month.
- The final consumer confidence index fell to a level of -8.80 in the eurozone, in February, at par with market expectations of a fall to -8.80. In the prior month, the consumer confidence index had registered a reading of -8.50. The preliminary figures had also indicated a fall to -8.80.
- On a MoM basis, the preliminary durable goods orders in the US rose 1.6% in January, compared with a drop of 0.7% in the previous month. Markets were expecting durable goods orders to advance 0.5%.
- In January, pending home sales in the US eased 5.7% on a monthly basis, compared with market expectations of a rise of 1.0%. In the prior month, pending home sales had dropped by a revised 2.3%.
- The final Reuters/Michigan consumer sentiment index fell to a level of 62.80 in February, in the US, compared with a reading of 67.20 in the prior month. Markets were expecting the Reuters/Michigan consumer sentiment index to ease to 61.70. The preliminary figures had indicated a drop to 61.70.
CORPORATE UPDATES
SOUTH AFRICA
- City Lodge Hotels Limited (JO:CLHJ): The hotel and resort company, in its 1H22 results, reported that its revenue advanced 102.2% from the same period of the preceding year to R436.01mn. Its diluted loss per share stood at 5.90c, compared with 127.60c recorded in the corresponding period of the previous year.
- Steinhoff (JO:SNHJ) Investment Holdings Limited: The household goods company announced, in its 3M22 trading statement, that revenue from continuing operations increased 10.0% to EUR2.83bn as compared with the comparative previous year period. Despite challenges faced, looking through the COVID-19 cycle all of the operations have managed to increase revenue over the longer term.
- Brent tops $105 for first time since 2014 as Russia rolls into Ukraine: Oil prices jumped, with Brent rising above $105 a barrel for the first time since 2014, after Russia’s attack on Ukraine worsened concerns about disruptions to global energy supply.