SA Closed in Red, Concerns Continue on the Spread of the Omicron Coronavirus

  • Market Overview
  • Editor's Pick

SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the red yesterday, amid concerns about the spread of the Omicron coronavirus variant and following hawkish comments from the US Federal Reserve (Fed) Chairman, Jerome Powell.
  • Gold miners, AngloGold Ashanti (JO: ANGJ ), Gold Fields (JO: GFIJ ) and Harmony Gold Mining plunged 5.3%, 4.9% and 4.1%, respectively.
  • Retail companies, Steinhoff International Holdings (JO: SNHJ ) N.V., Lewis Group and Cie Financiere Richemont SA (JO: CFRJ ) shed 3.4%, 3.2% and 1.2%, respectively.
  • On the flipside, real estate property sector stocks, Delta Property Fund (JO: DLTJ ), Growthpoint Properties (JO: GRTJ ) and Fortress REIT soared 8.8%, 3.0% and 1.6%, respectively.
  • Platinum miners, Impala Platinum Holdings (JO: IMPJ ) and Royal Bafokeng Platinum (JO: RBPCBe ) gained 3.3% and 2.9%, respectively.
  • The JSE All Share index declined 0.2% to close at 71,020.76.

UK MARKET REVIEW

  • The UK market finished weaker yesterday, as persistent concerns about the spread of the Omicron variant of coronavirus dampened investor sentiment.
  • Retail sector stocks, Just Eat Takeaway.com N.V. and JD Sports Fashion (LON: JD ) declined 4.9% and 4.8%, respectively.
  • Mining sector companies, Glencore (LON: GLEN ), Antofagasta (LON: ANTO ) and Fresnillo (LON: FRES ) shed 4.1%, 1.9% and 1.6%, respectively.
  • Tobacco companies, Imperial Brands (LON: IMB ) and British American Tobacco eased 1.0% and 0.5%, respectively.
  • On the flipside, oil and energy companies, Royal Dutch Shell (LON: RDSa ) and BP (LON: BP ) added 1.6% and 1.1%, respectively.
  • Hammerson (LON: HMSO ) gained 1.5%, after the real estate company announced that it expects an increase in its FY21 earnings.
  • The FTSE 100 index declined 0.6% to close at 7,129.21.

US MARKET REVIEW

  • US markets ended higher yesterday, amid the release of robust corporate results and as investors shrugged off concerns about Omicron.
  • Kroger (NYSE: KR ) soared 11.0%, after the grocery store company reported better than expected 3Q21 earnings.
  • Chesapeake Energy Corporation (NYSE: CHK ) surged 6.8%, after the company announced its plan to buy-back up to $1.00bn worth of its common stock and warrants over the next two years.
  • On the contrary, variety stores company, Dollar General Corporation (NYSE: DG ) declined 3.1%, after the company reported a decline in its 3Q21 profits.
  • The S&P 500 index rose 1.4% to settle at 4,577.10, while the DJIA index advanced 1.8% to close at 34,639.79.
  • The NASDAQ index climbed 0.8% to end the trading session at 15,381.32.

ASIA MARKET REVIEW

  • Asian markets are trading mostly higher this morning, tracking overnight gains on Wall Street.
  • In Japan, SoftBank Group (T: 9984 ) has shed 2.8%.
  • On the flipside, transport company, Kawasaki Kisen Kaisha (T: 9107 ) has soared 9.9%.
  • In Hong Kong, technology company, Alibaba (NYSE: BABA ) Group has eased 3.6%.
  • On the contrary, bank, HSBC Holdings (LON: HSBA ) has advanced 1.4%. In South Korea, Central Insight has surged 18.3%.
  • On the other hand, electronics company, LG Electronics (KS: 066570 ) has dropped 1.2%.
  • Peer, Samsung Electronics (KS: 005930 ) has lost 0.8%.
  • The company earlier announced new auto chips targeting demand for advanced chips in cars, including one mounted in Volkswagen’s infotainment system developed by LG Electronics.
  • The Nikkei 225 index is trading 0.1% higher at 27,790.92.
  • The Hang Seng index has declined 0.9% to trade at 23,567.64, while the Kospi index is trading 0.8% higher at 2,968.94.

COMMODITIES

  • At 06:00 SAST today, Brent spot prices rose 0.4% to trade at $70.32/bl, extending the previous session’s gains.
  • Yesterday, Brent spot prices rose 2.1% to settle at $70.02/bl, after OPEC+ producers reached an agreement to stick to their existing policy of monthly oil output increases despite fears that a US release of crude oil reserves and the new Omicron coronavirus variant would lead to a fresh drop in oil prices.
  • Yesterday, the Illinois North Central No.2 Yellow corn spot prices rose 1.0% to $5.64/bushel.
  • At 06:00 SAST today, gold prices advanced 0.3% to trade at $1,773.34/oz. Yesterday, gold declined 0.7% to close at $1,768.74/oz, as strength in the greenback after hawkish comments from the US Fed Chairman, Jerome Powell dampened demand for the safe haven yellow metal.
  • Yesterday, copper rose 1.0% to close at $9,590.00/mt. Aluminium closed 2.5% lower at $2,615.00/mt.

CURRENCIES

  • Yesterday, the South African rand strengthened against the US dollar. In the US, initial jobless claims increased less than expected for the week ended 26 November, indicating towards tightening domestic labour market conditions, while layoffs tumbled to the lowest level in 28 and a half years in November.
  • The yield on benchmark government bonds fell yesterday. The yield on 2026 bond fell to 7.98%. Further, the yield on 2023 bond declined to 4.97%, while that for the longer-dated 2030 issue fell to 9.64%.
  • At 06:00 SAST, the US dollar is trading 0.2% higher against the South African rand at R15.9670, while the euro is trading 0.1% higher at R18.0328. At 06:00 SAST, the British pound has gained 0.1% against the South African rand to trade at R21.2144.
  • Yesterday, the euro declined against most of the major currencies. In the eurozone, the producer price index (PPI) accelerated more than expected in October, amid surging energy prices. Unemployment in the eurozone dropped in October. Meanwhile, the European Central Bank (ECB) board member, Fabio Panetta stated that the current inflation spike is temporary and driven largely by supply factors and that global central banks should have the patience to look through these effects and explain their policies to the people.
  • At 06:00 SAST, the euro slipped 0.1% against the US dollar to trade at $1.1294, while it has gained 0.1% against the British pound to trade at GBP0.8500.

ECONOMIC UPDATES

  • Retail sales in Switzerland rose 1.2% on a YoY basis, in October. Real retail sales had advanced by a revised 2.6% in the prior month.
  • The number of people unemployed in Spain dropped by 74.40K in November. Spain had recorded a fall of 0.70K jobs in the prior month.
  • In October, unemployment rate in Italy advanced unexpectedly to 9.4%. In the prior month, unemployment rate had recorded a level of 9.2%.
  • On a MoM basis, the PPI in the eurozone rose 5.4% in October, more than market expectations for an advance of 3.5%. The PPI had risen by a revised 2.8% in the previous month.
  • The unemployment rate dropped to 7.3% in the eurozone, in October, compared to a reading of 7.4% in the previous month. Market anticipations were for the unemployment rate to drop to 7.3%.
  • Number of initial jobless claims climbed to 222.00K in the US, in week ended 27 November 2021. In previous week, the seasonally adjusted number of initial jobless claims had registered a revised reading of 194.00K.
  • The final Nikkei Japan services PMI in Japan advanced to 53.00 in November. The preliminary figures had recorded an advance to 52.10, compared to a reading of 50.70 in the previous month,
  • In China, the Caixin/Markit services PMI index recorded a drop to 52.10 in November, compared to a level of 53.80 in the prior month.

CORPORATE UPDATES

SOUTH AFRICA

  • Nedbank Group (JO: NEDJ ) Limited: The banking company announced that Hubert Brody has been appointed as Lead Independent Director to the boards of Nedbank Group and Nedbank, with immediate effect.
  • Rebosis Property Fund Limited (JO: REAJ ): The real estate investment trust company, in its FY21 results, reported that its revenue declined 2.2% from the preceding year to R1.67bn. Its basic and diluted earnings per REA share stood at 292.72c compared with 278.78c recorded in the last year. Basic and diluted loss per REB share stood at 68.39c compared to 9.67c recorded in the previous year.
  • Oil prices rise as Opec+ meets to decide on supply: Oil prices rose as investors adjusted positions before an Opec+ decision on supply policy, though gains were capped by fears that the Omicron coronavirus variant could hit fuel demand.

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