The Traders' Update, 22-23 July 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 Monday as investors reacted to the latest political developments across the Atlantic, i.e.:
The pan-European Stoxx 600 closed 1% higher. However, travel and leisure stocks fell 2.33% to lead the stocks in the red.
On the individual shares front, Irish low-cost airline company Ryanair share tumbled on Monday after the company reported that its quarterly net profit fell by 46% to €360 million (US$392 million), and fares are expected to be lower than expected in the summer months.
Asia-Pacific Markets
Hong Kong
The Hang Seng closed 1.25% higher at 17,635.88.
China
The People's Bank of China unexpectedly trimmed its benchmark lending rates on Monday, i.e.:
Furthermore, the Bank is expected to reduce collateral requirements for its medium-term lending facility which currently stands at a rate of 2.5%.
Mainland markets closed lower, i.e.:
Japan
Broader markets closed lower, i.e.:
South Korea
Korean markets closed lower, i.e.:
Singapore
The Straits Times Index closed 0.30% lower at 3,437.26.
Australia
The S&P/ASX 200 closed 0.50% lower at 7,931.70.
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U.S. Markets
Equity markets closed higher as investors assessed the political developments in the country, i.e.:
Clinical research company IQVIA Holdings shares led the gains in the S&P 500 on Monday after the company reported higher-than-expected earnings and revenue. The company also raised its full-year earnings per share (EPS) outlook.
Chipmaker Nvidia shares recovered from the recent losses as analysts at investment bank Piper Sandler upgraded their price target on the stock to US$140 (ZAR2,567.73).
Electric vehicle (EV) maker Tesla shares advanced ahead of the release of the company's earnings report after markets close on Tuesday. The market is expecting the company's CEO to update them on the company's projects including the robotaxi system and other self-driving technologies.
Cybersecurity provider Crowdstrike shares tumbled to the bottom of the S&P 500 as client businesses navigate through the disruptions caused by a tech outage of the provider's systems on Friday. The outage impacted airline companies and banking institutions. Delta Air Lines crashed after the company reported that it was forced to cancel 36% of its flights on Sunday due to the outage.
Telecommunications company Verizon shares fell after the company's second-quarter earnings report showed that annual revenue growth grew less than 1%, lower than analysts' prediction even after the company added its internet and mobile phone subscribers.
Global coffee chain company Starbucks shares retreated from the gains posted in the last week on the back of reports that activist investor Elliott Investment Management had acquired a stake in the company.
Provider of industrial gases and related equipment Air Products and Chemicals shares cratered after its COO resigned.
Segment 2: African Markets
Nigeria
Dangote refinery is in negotiations with the Libyan government to secure crude oil for about 650 thousand barrels per day plant. The refinery also plans to secure Angolan crude oil as it seeks to overcome domestic oil supply challenges.
A state regulator fined U.S. social media giant Meta Platforms ?171.6 billion (US$220 million) after the company violated domestic consumer, data protection and privacy laws.
Uganda
The Ugandan Shilling was mute on Monday against the greenback with the stabilisation caused by subdued importer dollar demand. At 09h00 GMT, commercial banks quoted the local currency to trade at 3,690/3,700 per U.S. dollar.
Kenya
The Kenyan Shilling fell on Monday due to an increased demand for dollars from the manufacturing sector and general goods importers. Commercial banks quoted the local currency to trade at 130.75/131.75 per U.S. dollar at approximately 09h00 GMT.
Angola
The National Bank of Angola kept its benchmark lending rate unchanged at 19.5% on Friday with the Governor noting that inflation is likely to slow down and there has been an improvement in the supply of essential goods over the near term.
Segment 3: South African Markets
Petrochemicals company Sasol reported that it increased coal exports by 5% to 2.1 million tons in the financial year ended 30 June 2024. However, coal production declined by 2% to 30.2 million metric tons due to a decline in the company's mining operations. Revenue generated from the company's chemicals business declined by 13% to R143.32 billion (US$7.86 billion).
Mining company Anglo-American Platinum completed its restructuring plans in its South African which results in about 2,800 workers having been let go. Furthermore, the company reported that its first-half profit which excludes some one-time items fell by 18% to R6.5 billion (US$324 million).
Clothing retailer Mr Price released its trading update for the first quarter through 29 June 2024 and recorded a sales growth of 4.6% to R8.5 billion (US$470 million). The company has gained market share for eleven straight months and on a 12-month rolling basis, the company gained a market share just over R1.1 billion (US$60 million). Retail sales in June grew by 12.7% ahead of the market's growth of 10.3%.
Lender Standard Bank has been steadily reducing its ATM geographical footprint across the country by introducing "new technology ATM devices" which are termed to be more efficient and have more capacity to serve clients' needs.
Segment 4: JSE Market Morning?Update