The Traders' Update, 9-10 September 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, i.e.:
The pan-European Stoxx 600 closed 0.76% higher with travel and leisure stocks closing 2.18% higher to lead the gains.
On the individual shares front, British fashion house Burberry shares plunged after the stock was removed from FTSE 100 following a steep decline in its share price due to weaker demand.
Swedish carmaker Volvo Cars shares continued to fall after the company announced in the last week it would cut its medium-term and revenue targets along with its plan to fully sell electric and plug-in hybrid vehicles by 2030.
British aeronautical engine manufacturer Rolls Royce shares rose on Monday on news that the European Union Aviation Safety Agency had ordered inspections on the company's engines on Airbus A350-1000 aircraft after Hong Kong's Cathay Pacific on route to Zurich from Hong Kong was forced to land due to a fire in its fuel system.
The British government is seeking an additional ￡1 trillion (US$1.3 trillion) in investment over the next decade to achieve an annual economic growth rate of 3%.
Asia-Pacific Markets
Hong Kong
Chinese electrical appliance manufacturer Midea Group announced an IPO (initial public offering) listing on the Hong Kong Stock Exchange with each share offered at a price between HK$52 and HK$54.80. The total offering valuation would be HK$26.97 billion (US$3.46 billion), which would be the biggest listing in more than three years on the Exchange.
The Hang Seng closed 1.42% lower at 17,196.96.
China
The National Bureau of Statistics reported that headline consumer inflation in August rose by 0.6% year-on-year, lower than the expected 0.7% increase. On a monthly basis, it rose by 0.4%, lower than the 0.5% increase expected.
Mainland markets closed lower, i.e.:
Japan
The Statistics Bureau reported that the economy expanded by 2.9% year-on-year in the second quarter, lower than the 3.2% growth expected by polled market analysts. A softer GDP print tends to constrain the Bank of Japan from hiking interest rates.
Broader markets closed lower, i.e.:
South Korea
Korean markets closed lower, i.e.:
Singapore
The Straits Times Index closed 1.22% higher at 3,496.53.
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Australia
The S&P/ASX 200 closed 0.32% lower at 7,988.10.
U.S. Markets
Equity markets closed higher on Monday as investors look ahead to the release of the consumer price index report on Wednesday, i.e.:
Server and data storage provider Super Micro Computer shares surged to the top of the S&P 500 following a report published on Monday by forensic accounting firm GlassHouse Research which specialises in identifying fraudulent activities lessened short seller Hindenburg Research's concerns. The short seller raised concerns about the company's accounting practices.
Airline operator JetBlue shares rose after BofA Securities upgraded its rating on the stock to "neutral". Furthermore, the analysts noted that the airline stocks are poised to benefit from "moderating domestic capacity, stable demand, and reduced fuel costs". Other airline stocks like Delta Air Lines and United Airlines also rose.
Human resources software provider PayCom Software shares clawed back some of the steep losses posted in the last week after the company's CEO sold off more than US$600,000 worth of company stock. In its latest earnings report, the company's revenue growth helped the company beat profit estimates. It lifted its full-year guidance and thus boosted its stock buyback plan.
Solar technology firm Enphase Energy stocks fell to the bottom of the S&P 500 even after analysts iterated that interest rate cuts could benefit the company. The stock price has fell more than 20% this year alone.
Health insurer Humana shares fell after investment bank Leerink Partners noted risks to "Star ratings" of certain healthcare plans offered by the insurer. The Centers for Medicare and Medicaid Services provides ratings that affect insurance providers' eligibility for quality bonuses.
Fragrance and personal care product retailer Bath & Body Works shares continued to buckle under the pressure after the company lowered its sales guidance at the end of the last month on the back of reduced consumer spending.
On the data front, the U.S. Department of Labor reported that the U.S. economy added 142,000 jobs in August, up from the 89,000 reported in the previous month. The unemployment rate fell from 4.3% to 4.2%.
Segment 2: African Markets
Kenya
The High Court has temporarily suspended a proposed deal for Indian company Adani Group to lease the company's main airport for 30 years in exchange for expanding it. The Law Society of Kenya and Kenya Human Rights Commission told the court that they could raise 237.37 billion (US$1.85 billion) that is required to upgrade the main airport.
Segment 3: South African Markets
9 September was the final day that local banks processed domestic electronic funds transfer (EFT) credit payments and EFT debit collections to and from the countries of Lesotho, Eswatini and Namibia. The four countries, including South Africa, formed part of the Common Monetary Area (CMA) which linked the countries into a monetary union where a single monetary policy prevailed, however, this practice was deemed to be non-compliant with international regulations.
The European Union (EU) will provide two grants totaling R626 million (€32 million) to assist the government kick start its green hydrogen industry. The money is from the EU's budget and is separate from the €8.43 billion Just Energy Transition budget looking to finance the country's just energy transition plan.
Mining company AngloGold Ashanti has agreed to purchase American competitor Centamin in a deal that will see the company's valuation increase to R44.8 billion (￡1.9 billion) as increasing gold prices incentivise producers to seek expansion opportunities.
Gaming company Sun International released its interim results for the six months through June 2024, i.e.:
Real Estate Investment Trust (REIT) Attacq reported its financial results for the 2024 financial year, i.e.:
Segment 4: JSE Lunch-Time Market Update