The Traders' Update, 15-16 April 2024
Realeboha Molaba
Actuarial Junior Consultant; Actuarial Science Honours Graduate from the University of Cape Town; Actuarial Science and Mathematical Statistics Graduate from the University of the Witwatersrand
Segment 1: Overseas Markets
European Markets
Equity markets closed mixed on Monday on the back of heightened geopolitical tensions in the Middle East, i.e.:
The pan-European Stoxx 600 closed 0.05% higher with oil and gas stocks leading the losses to close 1.60% lower.
On the individual shares front, Swiss banking software company Temenos shares jumped after the company reported that an independent probe cleared allegations made by short-seller Hindenburg Research. The short-seller alleged "accounting irregularities" at the company.
Dutch private equity firm CVC Capital Partners plans to list on Euronext Amsterdam and it plans to raise about €250 million (US$266 million) as part of its initial offering (or IPO).
Asia-Pacific Markets
Hong Kong
The Hang Seng closed 0.72% lower at 16,600.46.
China
Real estate firm China Vanke stated that it is in meetings with analysts on the back of the challenges the company is facing, which include operational difficulties and short-term liquidity.
Mainland markets closed higher, i.e.:
Japan
Broader markets closed lower, i.e.:
South Korea
Korean markets slipped, i.e.:
India
Wholesale price inflation in March rose by 0.53% year-on-year and it was slightly higher than the 0.51% estimate Reuters analysts proposed. The increase was due to price increases of food, crude petroleums and natural gas products, minerals and non-food articles.
The Nifty 50 closed 1.10% lower at 22,272.50.
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Australia
The S&P/ASX 200 closed 0.46% lower at 7,752.00.
U.S. Markets
Equity markets fell amid the geopolitical tensions in the Middle East, i.e.:
Cloud-based software manager Salesforce shares led the losses in the S&P 500 after reports surfaced that the company is in talks to acquire data management software firm Informatica. Informatica shares also fell following the news.
Electric vehicle (EV) maker Tesla shares also fell amid reports that the company plans to layoff 10% of its global workforce. The company is facing challenges due to uncertainty in demand for EV vehicles and increasing competition in the EV market.
Insurer Global Life shares continued to fall on Monday since Thursday after short seller Fuzzy Panda disclosed that it had taken a short position on the stock amid allegations of fraud at the company. Global Life and its subsidiaries were subpoenaed by the Department of Justice as part of its probe into unethical practices by the firm.
Regional lender M&T shares posted the strongest gains in the S&P 500 after the bank reported that it had reduced its exposure to commercial real estate loans. The company's net interest income in the first quarter matched market expectations, however, earnings per share (EPS) fell slightly short of expectations.
Investment bank Goldman Sachs shares advanced after the company reported its first quarter results and thus its revenue and net income came in ahead of market expectations. However, its net interest income declined year-on-year even though the company reported increases in several key revenue items like debt and equity underwriting as well as investment banking fees.
Health insurer Centene shares advanced on news that the company had retained a statewide Medicaid contract in Florida after the state's re-procurement process. The contract will assist the company to retain its market share and thus retain members. Furthermore, investment bank Wells Fargo increased its price target on the stock.
Segment 2: African Markets
Nigeria
The country's electricity grid collapsed for the fifth time this year in the early hours of Monday morning. This is after the national regulator approved a tariff increase of 250% for wealthy consumers and the government is aiming to reduce its subsidies which are worth US$2.6 million (?2.998 billion).
Ghana
The government failed to reach a deal with two bondholder groups to restructure US$13 billion worth of international bonds. This is a blow to the government's attempt to emerge from its credit default status and economic crisis.
Segment 3: South African Markets
Asset managers state that retailer Pick 'n Pay's stock is a risky investment considering that its share price has plummeted by close to 78% from the highs achieved in 2018. The retailer is navigating through the tough economic headwinds and management woes it has been experiencing in the last year.
Old Mutual chairperson has stated that foreign investors have disinvested close to R1 trillion out of the domestic economy in the past decade due to an uncertain regulatory environment.
The South African Reserve Bank (SARB) has defended its stance on aiming for the consumer price index to reach the mid-point target of 4.5%, even though rising oil and food prices delay the relief from high interest rates. The Governor stated that price stability remains the Bank's main priority and thus the government needs to play an active role to encourage economic balance and growth.
Segment 4: JSE Morning Update