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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 6 September 2019
South Africa
Despite weak economic results, the local market followed most global indices on trade-truce optimism and ended Thursday in the green. The JSE All Share closed up 1.04% at 55 476.36 points.
United States
Wall Street surged on Thursday on expectations of a de-escalation in trade tensions after Washington and Beijing agreed to hold high-level talks next month, while strong US economic data eased fears of a domestic slowdown. Shortly after the JSE closed, the Dow had gained 1.69% and stood at 26 801.69 points.
Europe
Even though Brexit woes continued in the UK, European markets rose for the second day in a row after China confirmed that trade-war negotiations will recommence in October. The STOXX 600 closed 0.72% in the green.
Hong Kong
After Wednesday’s phenomenal surge, the Hang Seng closed flat on Thursday due to profit booking and subdued trade. At the closing bell, the Hang Seng was 0.03% in the red at 26 515.53 points.
Japan
Japan’s Nikkei reached a one-month high on Thursday as news about the renewed trade negotiations, Brexit and the Hong Kong extradition bill lifted investor sentiment. The benchmark Nikkei ended up 2.12%.
Rand
The rand began the day on a positive note, but lost momentum after data showed that the South African current account deficit widened by R60.5 billion in the second quarter. At 17h45, a dollar traded at R14.84.
Precious metals
Bullion prices took a knock on Thursday after the optimism around the upcoming US-China trade negotiations spurred investors to riskier trade. At 17h45, an ounce of gold $1 519.62.
Oil
Crude prices extended gains on Thursday as US oil inventories reported a loss across the board for the previous week. At 17h45, Brent crude traded at $62.54 per barrel.
Despite weak economic results, the local market followed most global indices on trade-truce optimism and ended Thursday in the green. The JSE All Share closed up 1.04% at 55 476.36 points.
United States
Wall Street surged on Thursday on expectations of a de-escalation in trade tensions after Washington and Beijing agreed to hold high-level talks next month, while strong US economic data eased fears of a domestic slowdown. Shortly after the JSE closed, the Dow had gained 1.69% and stood at 26 801.69 points.
Europe
Even though Brexit woes continued in the UK, European markets rose for the second day in a row after China confirmed that trade-war negotiations will recommence in October. The STOXX 600 closed 0.72% in the green.
Hong Kong
After Wednesday’s phenomenal surge, the Hang Seng closed flat on Thursday due to profit booking and subdued trade. At the closing bell, the Hang Seng was 0.03% in the red at 26 515.53 points.
Japan
Japan’s Nikkei reached a one-month high on Thursday as news about the renewed trade negotiations, Brexit and the Hong Kong extradition bill lifted investor sentiment. The benchmark Nikkei ended up 2.12%.
Rand
The rand began the day on a positive note, but lost momentum after data showed that the South African current account deficit widened by R60.5 billion in the second quarter. At 17h45, a dollar traded at R14.84.
Precious metals
Bullion prices took a knock on Thursday after the optimism around the upcoming US-China trade negotiations spurred investors to riskier trade. At 17h45, an ounce of gold $1 519.62.
Oil
Crude prices extended gains on Thursday as US oil inventories reported a loss across the board for the previous week. At 17h45, Brent crude traded at $62.54 per barrel.
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Our daily update
We covered the latest weekly market wrap from Peregrine Treasury Solutions this morning. Below the extract pertaining to South African equities
SOUTH AFRICAN EQUITY
Closer to home, South African markets edged up slightly, supported by a stronger local currency, off the back of stronger economic growth numbers released earlier in the week. Some key takeaways came from the likes of Firstrand Bank who saw their normalized earnings jumping 6% to R27.9 billion, for the year ended 30 June 2019. RMB saw once-off hits coming from their private equity division during the year, while Wesbank also suffered slightly, due to the pressured economic climate that South African’s find themselves in. Firstrand Bank, up over 3.3% for the week, opened Friday’s trading day at R61.00 per share.
Behemoth, Discovery, also released their numbers for the year ending 30 June 2019. One can see how they’ve allocated a material amount of money into new ventures, which will hopefully create even more value for shareholders in the future. Some of their numbers were as follows:
The economic road ahead will definitely put some strain on Discovery, as citizens and clients become more aware of their spending habits. Having said this, Discovery are laying the foundations to quite an interesting and diversified investment opportunity for the general investor.
On the mining front, DRD Gold was seen increasing their revenue by 11 percent to R2.76 billion. Operating profit was up 5% to R371.8 million, while production output, from their major Ergo mine, was down 4% for the period in question.
For September, so far:
Read the full article here
SOUTH AFRICAN EQUITY
Closer to home, South African markets edged up slightly, supported by a stronger local currency, off the back of stronger economic growth numbers released earlier in the week. Some key takeaways came from the likes of Firstrand Bank who saw their normalized earnings jumping 6% to R27.9 billion, for the year ended 30 June 2019. RMB saw once-off hits coming from their private equity division during the year, while Wesbank also suffered slightly, due to the pressured economic climate that South African’s find themselves in. Firstrand Bank, up over 3.3% for the week, opened Friday’s trading day at R61.00 per share.
Behemoth, Discovery, also released their numbers for the year ending 30 June 2019. One can see how they’ve allocated a material amount of money into new ventures, which will hopefully create even more value for shareholders in the future. Some of their numbers were as follows:
- Normalized profit down 3% to R7.74 billion
- Headline earnings down 11% to R5.14 billion
- Normalized headline earnings down 7% to R5.03 billion
- Discovery Health’s normalized operating profit increased by 10% to R3.04 billion
- Discovery Life’s normalized operating profit decreased by 9% to R3.23 billion, due to high claims
- Confirmed that more than 22,000 clients using Discovery Bank within the first two months
- New business/venture spending increased to R1.31 billion (21% of group earnings)
The economic road ahead will definitely put some strain on Discovery, as citizens and clients become more aware of their spending habits. Having said this, Discovery are laying the foundations to quite an interesting and diversified investment opportunity for the general investor.
On the mining front, DRD Gold was seen increasing their revenue by 11 percent to R2.76 billion. Operating profit was up 5% to R371.8 million, while production output, from their major Ergo mine, was down 4% for the period in question.
For September, so far:
- All Share and Top 40 indices: up around 1.10%
- Resources: down around 2.55%
- Industrials: up around 1.53% (Naspers: up 4.14%)
- Financials: up around 3.13%
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.
While the month of August was negative by -1.73% lets see what the month of September holds for the South African stock market.
For the month of September 2019 so far the JSE All Share Index is down -0.64% for this period.
There are continued and growing concerns about a global slow down largely driven by the trade ware between the US and China. Continued tariffs by the US on Chinese goods and the retaliation by China by raising tariffs on US goods keeps hurting markets and global economic growth, as the world's two biggest economies continue to stand off in this trade war.
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
For the month of September 2019 so far the JSE All Share Index is down -0.64% for this period.
There are continued and growing concerns about a global slow down largely driven by the trade ware between the US and China. Continued tariffs by the US on Chinese goods and the retaliation by China by raising tariffs on US goods keeps hurting markets and global economic growth, as the world's two biggest economies continue to stand off in this trade war.
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