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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.
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Short summary of PSG's market commentary for 29 July 2019
South Africa
The JSE ended flat on Friday, not being influenced by a rally in global stocks after upbeat earnings reports and better-than-expected US GDP data was released. The JSE closed 0.16% in the red.
United States
Wall Street was higher on Friday, boosted by robust earnings from Alphabet and Intel, and after data showed the domestic economy slowed less than expected in the second quarter. At 17h15 the Nasdaq was 0.84% in the green.
Europe
European shares were slightly higher on Friday, pushed up by a rally in media stocks. At 17h15 the FTSE 100 was up by 0.76% and the DAX by 0.41%.
Hong Kong
Hong Kong shares dropped on Friday, tracking overnight losses on the Wall Street, and after the European Central Bank unexpectedly held interest rates steady. The Hang Seng Index fell by 0.73%.
Japan
Japanese shares fell on Friday on downbeat earnings both at home and on Wall Street the previous day. The Nikkei ended the day down 0.45%.
Rand
The rand was weaker on Friday after credit ratings agency Moody's warned that the R59bn bailout for Eskom was credit negative for SA. At 17h20, a dollar traded at R14.29.
Precious metals
Gold prices rose on Friday, as soft US inflation numbers offset better-than-expected US second-quarter economic growth that kept bets alive for an imminent interest rate cut. At 17h20, an ounce of gold traded at $1 419.52.
Oil
Oil prices rose on Friday as geopolitical tensions over Iran remained unresolved, although flagging prospects for global economic growth amid the US-China trade war capped gains. A barrel of Brent crude traded at $63.34 at 17h20.
The JSE ended flat on Friday, not being influenced by a rally in global stocks after upbeat earnings reports and better-than-expected US GDP data was released. The JSE closed 0.16% in the red.
United States
Wall Street was higher on Friday, boosted by robust earnings from Alphabet and Intel, and after data showed the domestic economy slowed less than expected in the second quarter. At 17h15 the Nasdaq was 0.84% in the green.
Europe
European shares were slightly higher on Friday, pushed up by a rally in media stocks. At 17h15 the FTSE 100 was up by 0.76% and the DAX by 0.41%.
Hong Kong
Hong Kong shares dropped on Friday, tracking overnight losses on the Wall Street, and after the European Central Bank unexpectedly held interest rates steady. The Hang Seng Index fell by 0.73%.
Japan
Japanese shares fell on Friday on downbeat earnings both at home and on Wall Street the previous day. The Nikkei ended the day down 0.45%.
Rand
The rand was weaker on Friday after credit ratings agency Moody's warned that the R59bn bailout for Eskom was credit negative for SA. At 17h20, a dollar traded at R14.29.
Precious metals
Gold prices rose on Friday, as soft US inflation numbers offset better-than-expected US second-quarter economic growth that kept bets alive for an imminent interest rate cut. At 17h20, an ounce of gold traded at $1 419.52.
Oil
Oil prices rose on Friday as geopolitical tensions over Iran remained unresolved, although flagging prospects for global economic growth amid the US-China trade war capped gains. A barrel of Brent crude traded at $63.34 at 17h20.
Our daily update
As we do every week we take a look at the latest weekly market summary from Peregrine. Below an extract from that summary focussing on the local stock market performance for the week.
SOUTH AFRICAN EQUITY
Closer to home, local equity markets have largely been directed by the indecisive rand, which has been seen trying to navigate the turbulent oceans shrouded with treacherous siren songs in the form of the public protector saga, the voting-in of Boris Johnson - as U.K.’s next Prime Minister, the surprisingly strong US earnings season and the dragging effect created by the US China trade war, which has seemingly turned stale, in terms of progression or any form of conclusive agreement. With the above challenges veiling the last week, both the All Share index and Top 40 were seen moving fractionally higher, to the tune of around 0.35% respectively, for the last five trading days.
Last Friday, AB Inbev (ANH) agreed to sell their Australian operations, Carlton & United Breweries, to Japan’s Asahi for $11.3 billion. The disposal of ANH’s Australian operations will definitely assist the company in chipping away at its debt pile, albeit at a slower rate than a successful IPO would have achieved. The fact that ANH’s debt burden is now topping the $100 billion mark, coupled with the recent cancellation of its Asian IPO, means that the sale of its Australian business is definitely a step in the right direction. Although one might think that the entire proceeds from the sale would be directed towards alleviating the company’s debt burden, there is a greater possibility of the proceeds being split between repaying its debt and targeting strategic buyouts and expansions within emerging markets, namely the buoyant Asia-Pacific region.
On Tuesday, Kumba Iron Ore (KIO) was seen reporting some extremely good, yet murky sim-month results, which saw the stock actually take a tumble on the day by around 2.93%. Once could say that investor expectations were potentially too high going into earnings. What one saw on the day, was simply the effect of an over-reaction cooling off. Some of their numbers were as follows:
Mondi Ltd (MND) have announced that they will be delisting their local version of the stock, while flipping its primary listing over to their London’s Mondi PLC (MNP) listing. Shareholders holding MND previously will now have their shares converted into the secondary listed MNP on the JSE. On MND’s final day of trading, around R6.7 billion in JSE daily volume was pushed through the stock alone.
If any investor held MND, and is uncertain about the way forward, here’s the conversion timelines advised by the company:
Read the full article here
SOUTH AFRICAN EQUITY
Closer to home, local equity markets have largely been directed by the indecisive rand, which has been seen trying to navigate the turbulent oceans shrouded with treacherous siren songs in the form of the public protector saga, the voting-in of Boris Johnson - as U.K.’s next Prime Minister, the surprisingly strong US earnings season and the dragging effect created by the US China trade war, which has seemingly turned stale, in terms of progression or any form of conclusive agreement. With the above challenges veiling the last week, both the All Share index and Top 40 were seen moving fractionally higher, to the tune of around 0.35% respectively, for the last five trading days.
Last Friday, AB Inbev (ANH) agreed to sell their Australian operations, Carlton & United Breweries, to Japan’s Asahi for $11.3 billion. The disposal of ANH’s Australian operations will definitely assist the company in chipping away at its debt pile, albeit at a slower rate than a successful IPO would have achieved. The fact that ANH’s debt burden is now topping the $100 billion mark, coupled with the recent cancellation of its Asian IPO, means that the sale of its Australian business is definitely a step in the right direction. Although one might think that the entire proceeds from the sale would be directed towards alleviating the company’s debt burden, there is a greater possibility of the proceeds being split between repaying its debt and targeting strategic buyouts and expansions within emerging markets, namely the buoyant Asia-Pacific region.
On Tuesday, Kumba Iron Ore (KIO) was seen reporting some extremely good, yet murky sim-month results, which saw the stock actually take a tumble on the day by around 2.93%. Once could say that investor expectations were potentially too high going into earnings. What one saw on the day, was simply the effect of an over-reaction cooling off. Some of their numbers were as follows:
- EBITDA margin up to 58%
- Headline EPS was up 239% vs an expected 160% increase (due to iron ore’s 57% run in 2019)
- Interim dividend of R30.79 per share
- Revenue numbers up 77% for the period
Mondi Ltd (MND) have announced that they will be delisting their local version of the stock, while flipping its primary listing over to their London’s Mondi PLC (MNP) listing. Shareholders holding MND previously will now have their shares converted into the secondary listed MNP on the JSE. On MND’s final day of trading, around R6.7 billion in JSE daily volume was pushed through the stock alone.
If any investor held MND, and is uncertain about the way forward, here’s the conversion timelines advised by the company:
- Last day to trade in MND: Tuesday, 23 July
- Listing of MND suspended from: Wednesday, 24 July
- Response deadline for elections: Wednesday, 24 July
- Scheme record date: Friday, 26 July
- Scheme pay date: Monday, 29 July
- Listing of MND terminated on: Monday, 29 July
- Impala Platinum: up 102.07%
- Kumba Iron Ore: up 68.78%
- Sibanye Gold: up 85.03%
- Rebosis Property Fund: down 78.07%
- Omnia: down 59.61%
- Brait: down 48.30%
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 -1% for the month of July 2019. And based on the performance of the Asian markets it looks like the markets will be red today (29 July 2019) which will make it very hard for the JSE All Share index to 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.
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 -1% for the month of July 2019. And based on the performance of the Asian markets it looks like the markets will be red today (29 July 2019) which will make it very hard for the JSE All Share index to 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.
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