Wall Street Gains, SA Banking Companies Rose, See What Else Is Happening Today

  • Market Overview

SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the green yesterday, tracking gains on Wall Street, after the US Federal Reserve (Fed) Chairman, Jerome Powell stated that despite tapering, bond purchases would continue until mid-2022.
  • Banking companies, FirstRand (JO: FSRJ ), Absa (JO: ABGJ ) Group and Nedbank Group (JO: NEDJ ) rose 2.5%, 2.3% and 2.2%, respectively.
  • Retail sector companies, Lewis Group (JO: LEWJ ), Cie Financiere Richemont SA (JO: CFRJ ) and Clicks (JO: CLSJ ) Group advanced 2.4%, 1.8% and 0.4%, respectively.
  • Mining sector stocks, Anglo American (JO: AMSJ ) and BHP Group (JO: BHPJ ) added 1.6% and 0.6%, respectively.
  • However, peer, Exxaro (JO: EXXJ ) Resources plunged 10.5%.
  • On the flipside, real estate sector companies, Attacq (JO: ATTJ ), Dipula Income Fund (JO: DIBJ ) and Accelerate Property Fund (JO: APFJ ) declined 1.8%, 1.1% and 1.0%, respectively.
  • The JSE All Share index advanced 0.9% to close at 64,363.66.

UK MARKET REVIEW

  • The UK market finished firmer yesterday, buoyed by gains in pharmaceutical and retail sector stocks.
  • Pharmaceutical company, AstraZeneca (LON: AZN ) rose 4.2%, after the company announced that its Alexion (NASDAQ: ALXN ) business would buy the remaining shares of drug maker, Caelum Biosciences for a consideration of $500.00mn.
  • Peer, Hikma Pharmaceuticals (LON: HIK ) added 2.5%. Retail company, Next gained 3.9%, after the company raised its earnings guidance for FY21, following a rise in its 1H21 profits and sales, as its stores reopened from COVID-19 lockdowns.
  • On the flipside, Royal Mail (LON: RMG ) plunged 8.8%. Homebuilding companies, Taylor Wimpey (LON: TW ) and Berkeley Group Holdings (LON: BKGH ) declined 1.9% and 0.9%, respectively.
  • The FTSE 100 index advanced 1.1% to close at 7,108.16.

US MARKET REVIEW

  • US markets ended mostly higher yesterday, after the US Fed Chairman Jerome Powell stated that he expects price pressures to ease off as supply-chain bottlenecks receded.
  • Dollar Tree (NASDAQ: DLTR ) surged 16.5%, after the company announced that it would be testing higher-priced merchandise in its stores.
  • Insurance sector companies, Travelers (NYSE: TRV ) and UnitedHealth Group (NYSE: UNH ) added 0.9% and 0.5%, respectively.
  • On the flipside, Micron Technology (NASDAQ: MU ) dropped 2.0%, after the company raised its FY22 earnings outlook by less than expected.
  • Technology firms, Intel (NASDAQ: INTC ) and salesforce.com (NYSE: CRM ) declined 0.9% and 0.7%, respectively.
  • The S&P 500 index rose 0.2% to settle at 4,359.46, while the DJIA index advanced 0.3% to close at 34,390.72.
  • The NASDAQ index eased 0.2% to end the trading session at 14,512.44.

ASIA MARKET REVIEW

  • Asian markets are trading mostly lower this morning, as weaker than expected Chinese factory activity data dampened investor sentiment.
  • In Japan, electric services company, Tokyo Electric Power Company has plummeted 8.5%. On the contrary, glass manufacturing company, Nippon Electric Glass has surged 8.8%.
  • In Hong Kong, China Evergrande (HK: 3333 ) has plunged 6.0%, amid reports that some bondholders did not receive a due coupon payment.
  • Investment company, CITIC has declined 3.1%. In South Korea, technology company, LG Electronics (KS: 066570 ) has dropped 1.2%.
  • On the flipside, chemicals company, Hannong Chemicals (KS: 011500 ) has surged 22.3%. The Nikkei 225 index is trading 0.4% lower at 29,430.63.
  • The Hang Seng index has declined 1.0% to trade at 24,420.68, while the Kospi index is trading 0.5% higher at 3,076.48.

COMMODITIES

  • At 06:00 SAST today, Brent spot prices fell 0.2% to trade at $78.23/bl, reversing the previous session’s gains.
  • Yesterday, Brent spot prices rose 0.7% to settle at $78.40/bl. The US Energy Information Administration (EIA) reported that US crude inventories advanced by 4.60mn bls for the week ended 24 September. Meanwhile, the OPEC+ plans to sustain its cautious approach to adding supply to the market.
  • Yesterday, the Illinois North Central No.2 Yellow corn spot prices rose 1.3% to $5.02/bushel.
  • At 06:00 SAST today, gold prices advanced 0.4% to trade at $1,732.50/oz. Yesterday, gold declined 0.4% to close at $1,726.37/oz, as strength in the greenback dented demand for the safe haven yellow metal.
  • Yesterday, copper declined 1.2% to close at $9,174.00/mt. Aluminium closed 1.1% lower at $2,894.60/mt.

CURRENCIES

  • Yesterday, the South African rand weakened against the US dollar. In the US, deals to buy previously owned homes bounced back to a seven-month high in August, however, higher prices amid supply constraints slowed the housing market momentum. Meanwhile, MBA mortgage applications dropped despite interest rates remaining close to an all-time low. The US Fed Chairman, Jerome Powell stated that inflation would continue till early next year, as material shortages are getting worse.
  • The yield on benchmark government bonds fell yesterday. The yield on 2026 bond fell to 7.61%. Further, the yield on 2023 bond declined to 5.17%, while that for the longer-dated 2030 issue fell to 9.26%.
  • At 06:00 SAST, the US dollar is trading 0.3% lower against the South African rand at R15.1484, while the euro is trading 0.2% lower at R17.5841. At 06:00 SAST, the British pound has declined 0.1% against the South African rand to trade at R20.3765.
  • Yesterday, the euro declined against most of the major currencies. In the eurozone, consumer confidence dropped more than expected in September, due to worsening confidence in retail and service industries. In contrast, industrial confidence improved in September, buoyed by the construction industry. Business climate in the eurozone was steady in September. Meanwhile, the European Central Bank (ECB) President, Christine Lagarde stated that the economic guidance for the eurozone is filled with uncertainty, on account of supply bottlenecks, rising energy prices and new waves of the coronavirus pandemic.
  • At 06:00 SAST, the euro advanced 0.1% against the US dollar to trade at $1.1608, while it has weakened 0.1% against the British pound to trade at GBP0.8629.

ECONOMIC UPDATES

  • The preliminary consumer price index (CPI) in Spain rose 4.0% on a YoY basis in September, higher than market expectations of an advance of 3.5%. In the previous month, the CPI had advanced 3.3%.
  • The producer price index (PPI) in Italy rose 0.4% on a MoM basis, in August. The PPI had climbed by a revised 3.6% in the prior month.
  • On a MoM basis in Germany, the import price index advanced 1.4% in August, higher than market expectations of an advance of 1.2%. The import price index had registered a rise of 2.2% in the previous month.
  • In September, the final consumer confidence index in the eurozone climbed to -4.00, in line with market expectations of a rise to a level of -4.00. The consumer confidence index had recorded a level of -5.30 in the previous month. The preliminary figures had also indicated a rise to -4.00.
  • In the eurozone, the economic sentiment indicator registered an unexpected rise to a level of 117.80 in September. In the prior month, the economic sentiment indicator had registered a revised reading of 117.60.
  • The industrial confidence index in the eurozone recorded an unexpected rise to a level of 14.10 in September, compared with a revised reading of 13.80 in the prior month.
  • In September, the services sentiment indicator registered a drop to 15.10 in the eurozone, more than market expectations for a fall to a level of 16.50. The services sentiment indicator had registered a level of 16.80 in the previous month.
  • In August, on a YoY basis, pending home sales in the US dropped 8.3%. Pending home sales had registered a drop of 8.5% in the prior month.
  • In the US, the number of mortgage applications eased 1.1% on a weekly basis, in the week ended 24 September 2021. The number of mortgage applications had advanced 4.9% in the prior week.
  • In August, the industrial product price index in Canada fell 0.3% on a monthly basis, compared with a fall of 0.4% in the prior month. Markets were anticipating the industrial product price index to advance 0.1%.
  • The NBS non-manufacturing PMI in China registered a rise to 53.20 in September. In the prior month, the NBS non-manufacturing PMI had recorded a reading of 47.50.
  • Caixin/ Markit manufacturing PMI index in China climbed to 50.00 in September, more than market expectations for an advance to 49.50. In the prior month, Caixin/Markit manufacturing PMI index had registered a level of 49.20.
  • Building permits in New Zealand advanced 3.8% in August on a MoM basis. In prior month, the seasonally adjusted building permits had recorded a revised rise of 2.2%.

CORPORATE UPDATES

SOUTH AFRICA

  • Reunert Limited (JO: RLOJ ): The fiber optic cable manufacturing company announced the retirement of both the Chair of the Board, Mr. Trevor Munday, and the Lead Independent Director, Mr. Sean Jagoe, immediately following the conclusion of its 2022 Annual General Meeting, currently planned for 15 February 2022. Mr. John Hulley, an Independent Non-Executive Director of the Board, will be appointed as the Lead Independent Director of the Board with effect from 15 February 2022, after the conclusion of the 2022 AGM. Also, Dr. Tumeka Matshoba-Ramuedzisi, an Independent Non-Executive Director of the Board, will succeed Advocate Thandi Orleyn, a Non-Executive Director of the Board, as Chair of the Social, Ethics and Transformation Committee, with Advocate Orleyn remaining as a member; and Ms. Tasneem Abdool-Samad, an Independent Non-Executive Director of the Board, will succeed Ms. Sarita Martin, an Independent Non-Executive Director of the Board, as Chair of the Remuneration Committee, with Ms Martin remaining as a member.
  • Ascendis Health (JO: ASCJ ) Limited: The pharmaceutical company, in its FY21 trading statement, indicated that it expects its basic loss per share to be between 308.50c and 371.40c, as compared with 316.70c in the previous year. It expects its headline loss per share to be between 300.90c and 346.40c, as compared with a headline loss per share of 229.40c in the prior year.
  • Tharisa (JO: THAJ ) wants to cut carbon emissions 30.0% by 2030: Chrome and platinum group metals (PGMs) miner Tharisa is targeting reducing carbon emissions by 30.0% by 2030 and becoming carbon neutral in 2050.

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