The Traders' Update, 18-19 June 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 higher on Tuesday, i.e.:
The pan-European Stoxx 600 closed 0.66% higher with construction stocks closing 1.3% higher to lead the gains. Household goods stocks bucked the trend to close 0.5% lower.
British financial services firm Hargreaves Lansdown share closed higher after its board of directors stated that it recommends shareholders approve a private-equity-consortium non-binding proposal from, led by German private equity firm CVC.
On the data front, the European Union's (EU) statistical office Eurostat reported that inflation in the 20-nation trading bloc rose by 2.6% year-on-year in May, up from the 2.4% reported in the previous month.
Asia-Pacific Markets
Hong Kong
The Hang Seng closed 0.11% lower at 17,915.55.
China
Mainland markets closed higher on Tuesday:
Japan
Broader markets closed higher, i.e.:
South Korea
Automaker Hyundai shares closed at a record high as the company reported that it aims to list its India subsidiary on the Bombay Stock Exchange in India.
Korean markets closed flat to higher, i.e.:
Singapore
The Straits Times Index closed 0.13% higher at 3,301.78.
Australia
The Reserve Bank of Australia kept its benchmark lending rate unchanged at 4.35% for the fifth consecutive time even though as the Governor stated that inflation remained above the Bank's target and remained persistent.
The S&P/ASX 200 closed 1.01% higher at 7,778.10.
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U.S. Markets
Equity markets closed higher as artificial intelligence (AI) chipmaker Nvidia's market capitalisation exceeded that of tech giant Microsoft, i.e.:
Energy company GE Vernova shares led the gains in the S&P 500 after the company announced in the last week that it had sold off its steam energy company to a French state-owned company, EDF. Furthermore, it signed a memorandum of understanding (MOU) with a Ukrainian company, DTEK, to develop renewable energy projects in Ukraine and the EU.
Pharmacy giant Walgreens Boots Alliance shares rose after the stock appeared in the Monday report of the The Motley Fool with analysts highlighting the company's attractive dividend yield. However, the company is currently facing high debt levels and lawsuits relating to the opioid crisis.
Manufacturer of automated test equipment Teradyne shares rose after analysts at Swiss investment bank UBS upgraded their price target on the stock and hence reiterated their "buy" rating on the stock. The analysts cite that the stock's upwards momentum can still be expected to persist due to a recovery in testing requirements from iPhone maker, Apple.
Maker of aluminum packaging for beverages Ball Corp. shares suffered the steepest loss in the S&P 500 even though the price of aluminum rose to a two-year high on the back of concerns about output from China and market expectations that the metal will be experience significant demand.
Homebuilder Lennar shares fell after the company's guidance for home deliveries in the current quarter was lower than expected even though the company beat current quarter sales and profit estimates for its fiscal second-quarter results.
Cosmetics maker Estee Lauder shares fell even though the company recognised demand growth in emerging markets. However, the company recorded soft sales in its Chinese market and this may be due to reduced consumer confidence in the market.
Segment 2: African Markets
Kenya
A parliamentary panel has suggested that the government needs to scrap some of its proposed new taxes in the next year's budget. Some of the new tax levies include taxes on cars and bread, as the new government aims to boost its revenue and reduce borrowing.
Ivory Coast
The government expects its oil output to increase more than threefold by 2027 due to recent oil and gas discoveries at the country's Baleine and Calao offshore fields. The Presidency expects to invest more than US$15 billion in the country's oil sector and output is expected to grow to about 200,000 barrels per day from the 60,000 barrels per day currently being produced.
Botswana
The Central Bank of Botswana stated that it expects its economy to miss the government's growth target of 4.2% due to sluggish mining market conditions globally which have impacted the local mining industry.
Ghana
Ghana Statistical Services reported that the economy expanded by 4.7% year-on-year in the first quarter of 2024 and the government is expected to meet with its bondholders this week to restructure about US$13 billion worth of international/external debt.
Segment 3: South African Markets
Telecommunications company Telkom released its financial results for the financial year ended 31 March 2024 on Tuesday and reported that revenue from total operations increased by 1.65% to R43.23 billion (US$2.41 billion). Net profit for the period increased by 81% from a loss of R9.97 billion to R1.88 billion and basic earnings per share increased from a loss of R2.12 per share to positive earnings of 298 cents per share.
Green energy supplier Renergen reported that it had successfully produced helium at its Virginia Gas Project following comments made earlier that the company was well on its way to ensuring it is able to successfully produce the gas.
Hospital group Life Healthcare is expanding its capacity by building two particle accelerators in Johannesburg and this will assist with detecting early signs of diseases, such as cancer, in patients.
The Government Employees' Pension Fund (GEPF), through the Public Investments Corporation (PIC), is expected to receive a dividend payout of R544 million (US$30.28 million) as private lender Investec is set to pay out dividends to shareholders.
Segment 4: JSE Market Morning?Update