|
Related Topics |
|
In our continued efforts to give our readers a broad number of views, opinions and information, we continue to provide PSG's daily market updates and add our own daily inputs in at the end.
|
|
Short summary of PSG's market commentary for 31 July 2019
South Africa
The JSE endured a choppy session on Tuesday as a strong showing from Tencent and the overall mining sector boosted the market, but investors remained cautious ahead of the US-China trade talks and key interest rate decisions. Shortly after the closing bell, the All Share was down by 1.37%.
United States
US markets declined on Tuesday as investors remained cautious ahead of the Federal Reserve’s (Fed) interest rates decision later today, which overshadowed the positive sentiment that pushed indexes to record highs in the previous week. At 18h00, the S&P 500 was trading at 0.37% in the red.
Europe
European markets struggled for direction on Tuesday after sentiment was dampened by the release of poor forecasts from German conglomerates, Bayer and Lufthansa. At 18h10, the FTSE 100 was 0.52% in the red.
Hong Kong
Shares in Hong Kong traded higher on Tuesday ahead of the infamous US-China trade negotiations, while most market participants remained optimistic that the world’s largest economy will trim interest rates to counter slowing global growth. At 18h15, the Hang Seng gained 0.17%.
Japan
Japanese markets closed higher on Tuesday supported by an upsurge in technology stocks, as investors set their sights on a potential economic recovery on the horizon. At the closing bell, the Nikkei had gained 0.43%.
Rand
The rand weakened against major global currencies on Tuesday, amid a rand asset sell-off that was sparked by Eskom woes and increasing fears that the UK is headed for a no-deal exit from the EU. At 18h20, the rand traded R14.10 against the dollar.
Precious metals
Gold prices firmed on Tuesday as investors waited for direction from the Fed’s two-day monetary policy meeting where is it expected to cut interest rates by at least 25 basis points. At 18h30, spot gold was trading in the green at $1 428.18 an ounce.
Oil
Oil prices recorded a fourth consecutive day of gains on Tuesday supported by the resumption of the US-China trade negotiations and on optimism that the Fed will announce an interest rate cut later today. At 18h35, a barrel of Brent crude was trading at $64.18.
The JSE endured a choppy session on Tuesday as a strong showing from Tencent and the overall mining sector boosted the market, but investors remained cautious ahead of the US-China trade talks and key interest rate decisions. Shortly after the closing bell, the All Share was down by 1.37%.
United States
US markets declined on Tuesday as investors remained cautious ahead of the Federal Reserve’s (Fed) interest rates decision later today, which overshadowed the positive sentiment that pushed indexes to record highs in the previous week. At 18h00, the S&P 500 was trading at 0.37% in the red.
Europe
European markets struggled for direction on Tuesday after sentiment was dampened by the release of poor forecasts from German conglomerates, Bayer and Lufthansa. At 18h10, the FTSE 100 was 0.52% in the red.
Hong Kong
Shares in Hong Kong traded higher on Tuesday ahead of the infamous US-China trade negotiations, while most market participants remained optimistic that the world’s largest economy will trim interest rates to counter slowing global growth. At 18h15, the Hang Seng gained 0.17%.
Japan
Japanese markets closed higher on Tuesday supported by an upsurge in technology stocks, as investors set their sights on a potential economic recovery on the horizon. At the closing bell, the Nikkei had gained 0.43%.
Rand
The rand weakened against major global currencies on Tuesday, amid a rand asset sell-off that was sparked by Eskom woes and increasing fears that the UK is headed for a no-deal exit from the EU. At 18h20, the rand traded R14.10 against the dollar.
Precious metals
Gold prices firmed on Tuesday as investors waited for direction from the Fed’s two-day monetary policy meeting where is it expected to cut interest rates by at least 25 basis points. At 18h30, spot gold was trading in the green at $1 428.18 an ounce.
Oil
Oil prices recorded a fourth consecutive day of gains on Tuesday supported by the resumption of the US-China trade negotiations and on optimism that the Fed will announce an interest rate cut later today. At 18h35, a barrel of Brent crude was trading at $64.18.
Our daily update
Yesterday saw retail and wholesale giant Massmart shares plunge more than 15% after releasing their latest operational and trading update. Below a small extract from the announcement
Given the above performances, it is estimated with reasonable certainty that for the six months to June 2019 the Group will report an operating loss, before non-trading items, foreign exchange movements and net interest, of between Rnil and R30m. This disappointing performance was caused by softer than expected sales, margin weakness and expense growth of approximately 12% (comparable 9%). New stores representing 3.1% additional trading space have been opened since June 2018 and this impacted on employment, depreciation and occupancy costs in addition to cost-inflation. African currency weakness has resulted in foreign exchange losses anticipated to be R81m, in comparison to a foreign exchange gain of R23m in the prior period. The losses are caused primarily by recent currency weakness in Zambia and Nigeria. Net interest costs will be approximately 18% higher than the prior period figure of R300m. The tax charge has been adversely impacted by an inability to raise deferred tax assets in certain ex-South African tax entities and impairing deferred tax assets in some South African and non-South African tax entities.
Consequently, excluding the impact of IFRS 16, shareholders are advised that Massmart anticipate, with reasonable certainty, the following for the six months to June 2019:
Read the full article here
Given the above performances, it is estimated with reasonable certainty that for the six months to June 2019 the Group will report an operating loss, before non-trading items, foreign exchange movements and net interest, of between Rnil and R30m. This disappointing performance was caused by softer than expected sales, margin weakness and expense growth of approximately 12% (comparable 9%). New stores representing 3.1% additional trading space have been opened since June 2018 and this impacted on employment, depreciation and occupancy costs in addition to cost-inflation. African currency weakness has resulted in foreign exchange losses anticipated to be R81m, in comparison to a foreign exchange gain of R23m in the prior period. The losses are caused primarily by recent currency weakness in Zambia and Nigeria. Net interest costs will be approximately 18% higher than the prior period figure of R300m. The tax charge has been adversely impacted by an inability to raise deferred tax assets in certain ex-South African tax entities and impairing deferred tax assets in some South African and non-South African tax entities.
Consequently, excluding the impact of IFRS 16, shareholders are advised that Massmart anticipate, with reasonable certainty, the following for the six months to June 2019:
- Headline (loss)/ earnings (Rm) (530.0) to (550.4) which reflects a change of (359.7%) to (369.7%) compared to previous period
- HEPS (cents) (240.5) to (249.8) which reflects a change of (353.7%) to (363.5%) compared to the previous period
- Net (loss)/ earnings (Rm) (582.4) to (602.0) which reflects a change of (397.6%) to (407.6%) compared to the previous period
- Basic EPS (cents) (264.3) to (273.2) which reflects a change of (390.7%) to (400.5%) compared to the previous period
Read the full article here
Our JSE All Share index daily performance calendar
Visit our JSE Calendar tracker page for a expanded version of the calendar below
The graphic below provides the daily returns of the JSE All Share Index (J203) on a calendar chart. Provides a great overview of the All share index over the course of the month. It will be updated daily with our daily investment update as received from PSG.
So the South African stock market is still up substantially for the year, with the only negative months so far being the month of May in which markets pulled back pretty sharply. But the markets rebounded in June with it ending up close to 5% for the month.
The JSE All Share Index is down -0.19% for the month of July 2019. Can the JSE All Share index close the month of July 2019 in the green. If it ends the month in the red, it will be only the 2nd month of 2019 which ended in the red. It is going to be close. The recent weakness in the Rand has given the Rand hedge stocks a significant boost.
For more on daily market movements see our 2019 Calendar tracker.
But we as South African investors are losing out in Dollar terms. Largely due to continued Rand weakness not only over the short term but over the last couple of years. We continue to advise investors to take money out of South Africa and invest it offshore. Looking for ideas for investments to make? Go read this article
The JSE All Share Index is down -0.19% for the month of July 2019. Can the JSE All Share index close the month of July 2019 in the green. If it ends the month in the red, it will be only the 2nd month of 2019 which ended in the red. It is going to be close. The recent weakness in the Rand has given the Rand hedge stocks a significant boost.
For more on daily market movements see our 2019 Calendar tracker.
But we as South African investors are losing out in Dollar terms. Largely due to continued Rand weakness not only over the short term but over the last couple of years. We continue to advise investors to take money out of South Africa and invest it offshore. Looking for ideas for investments to make? Go read this article