The Traders' Update, 21-22 October 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 were trading lower on Tuesday, i.e.:
On the individual shares front, German software company SAP was expected to report its third-quarter earnings on Monday evening and investors are likely to be pessimistic about the company's results given the disappointing results from German chipmaker ASML in the last week.
Dutch coffee and tea company JDE Peet shares rose to the top of the Stoxx 600 after German investment holding company JAB noted that it may acquire 86 million shares in the company.
Spanish oil company Repsol reported that it had halted its planned green hydrogen projects in the country citing unfavourable regulatory conditions for long-term industrial investments.
Norwegian lender DNB reported that it had entered into an agreement with Swedish investment bank and asset manager Carnegie to purchase the company from Swedish equity firm Altor and other minority shareholders for around 12 billion Swedish krona (US$1.14 billion).
Swedish investment firm EQT reported that it had formed a consortium with U.S.-based Neuberger Berman Private Markets and Canada Pension Plan Investment Board to acquire British international schools operator Nord Anglia Education for 153.51 billion Swedish krona (US$14.5 billion).
Danish shipping company Moller-Maersk shares rose on Monday after the company reported that it had stopped accepting bookings to and from Haiti which is crisis-stricken.
Swiss inspection services firm SGS shares fell after Canadian investment bank RBC cut its price target on the stock.
Asia-Pacific Markets
Hong Kong
The Hang Seng closed 1.57% lower at 20,478.46.
China
The People's Bank of China cut its one-year and five-year loan prime rates (LPRs) by 25bps to 3.1% and 3.6% respectively.
Mainland markets closed higher, i.e.:
Japan
Broader markets closed lower, i.e.:
South Korea
Korean markets closed higher, i.e.:
Singapore
The Straits Times Index closed 0.70% lower at 3,614.58.
Australia
The S&P/ASX 200 closed 0.74% higher at 8,344.40.
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U.S. Markets
Equity markets closed mixed, i.e.:
Construction materials supplier Builders FirstSource shares plunged to the bottom of the S&P 500 on the likelihood of mortgage bond rates remaining higher than expected due to expectations on the pace of interest rate reductions waning.
Health insurer Cigna shares fell on reports that merger talks with rival health insurer Humana had resumed. Cigna announced in January that it plans to sell its Medicare Advantage to Health Care Service Corporation in an attempt to make its merger with Humana more palatable for the regulator.
Semiconductor maker Monolithic Power Systems shares also fell on reports that some of the company's employees unloaded over US$300 million worth of shares and this is interpreted as insiders having limited confidence in the company's future performance.
Consumer health firm Kenvue shares rose to the top of the S&P 500 on reports that activist investor Starboard Value had accumulated a significant position in the company.
Artificial intelligence (AI) semiconductor firm Nvidia shares after the Bank of America and investment research firm CFRA boosted their price target on the stock. Bank of America cited that the company's partnerships with tech companies like Microsoft solidified the company's position in the AI space.
Aircraft maker Boeing shares rose after the company reached a tentative deal with a union representing its machinists and this could potentially end a strike that lasted five weeks. The strike negatively impacted the company's operations and some of the agreements to be implemented include a 35% increase in wages to phased in over four years.
Segment 2: African Markets
Tanzania
The government is building a grid interconnector with the government of Zambia to assist in mitigating the drought-influenced power crisis.
Ethiopia
The International Monetary Fund (IMF) has approved the initial review of the country's US$3.4 billion (41.1 trillion Ethiopian birr) lending programme with an immediate disbursement of US$340.7 million.
Nigeria
The upstream oil regulator has blocked British oil and gas Shell's bid to sell its entire onshore and shallow-water oil operators, however, American natural gas company Exxon Mobil's similar deal was approved.
Segment 3: South African Markets
South Africa's short-term rental market has experienced a significant boom with Airbnb rental listings in Cape Town, in particular, noting a significant increase. The rise in listings has generated over R14 billion (US$800 million) in economic activity for the city and supported well over 42,000 jobs.
FNB economists reported that many South Africans are turning to short-term loan relief with the total value of new credit extended increasing by 5.5% quarter-on-quarter to R139.8 billion (US$7.94 billion) in the second quarter of 2024.
The Central Energy Fund (CEF) expects fuel prices in November to increase due to the tensions in the Middle East placing an upward pressure on international crude oil prices, i.e.:
The Johannesburg Stock Exchange (JSE) expects a flurry of initial public offering (IPO) listings in the new year on new optimism regarding South Africa's economic growth prospects. Some of the anticipated listings include:
Newly-listed car trader WeBuyCars released its trading update for the 2024 financial year through September 2024 and informed shareholders that it expects:
Segment 4: JSE Lunch-Time Market Update