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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 8 July 2019
South Africa
The JSE ended lower on Friday as US jobs data surprised to the upside, forcing investors to reverse earlier hopes of interest rate cuts by the US Federal Reserve (Fed). The ALSI fell 0.41%.
United States
US stocks lost ground on Friday after strong job growth in June pushed investors to scale back bets on aggressive interest rate cuts by the Fed. Major US indices were all trading in the red at 18h15.
Europe
European shares dropped on Friday as industrial stocks slid after Sweden’s Hexagon gave a downbeat outlook blaming the US-China trade war. The pan-European STOXX 600 Index was down 0.30%.
Hong Kong
Hong Kong shares fell slightly on Friday, ahead of the release of US non-farm payrolls data. At the close of trade, the Hang Seng Index was down by 0.07%.
Japan
The Nikkei edged higher on Friday as investors kept to the sidelines before the release of a key US jobs report. The index ended 0.20% higher.
Rand
The rand shed earlier gains against the dollar on Friday afternoon as the US added more jobs in June than expected. At 18h20, a dollar traded at R14.20.
Precious metals
Gold slid on Friday and was set for its first weekly fall in seven weeks after data showed US jobs growth rebounded strongly in June, lowering the likelihood of an interest rate cut by the Fed this month. An ounce of spot gold traded at $1 397.01 at 18h20.
Oil
Brent crude ticked higher on Friday, supported by tensions over Iran and this week’s decision by oil cartel OPEC and its allies to extend a supply cut deal until next year. At 18h20, a barrel of Brent crude traded at $64.96
The JSE ended lower on Friday as US jobs data surprised to the upside, forcing investors to reverse earlier hopes of interest rate cuts by the US Federal Reserve (Fed). The ALSI fell 0.41%.
United States
US stocks lost ground on Friday after strong job growth in June pushed investors to scale back bets on aggressive interest rate cuts by the Fed. Major US indices were all trading in the red at 18h15.
Europe
European shares dropped on Friday as industrial stocks slid after Sweden’s Hexagon gave a downbeat outlook blaming the US-China trade war. The pan-European STOXX 600 Index was down 0.30%.
Hong Kong
Hong Kong shares fell slightly on Friday, ahead of the release of US non-farm payrolls data. At the close of trade, the Hang Seng Index was down by 0.07%.
Japan
The Nikkei edged higher on Friday as investors kept to the sidelines before the release of a key US jobs report. The index ended 0.20% higher.
Rand
The rand shed earlier gains against the dollar on Friday afternoon as the US added more jobs in June than expected. At 18h20, a dollar traded at R14.20.
Precious metals
Gold slid on Friday and was set for its first weekly fall in seven weeks after data showed US jobs growth rebounded strongly in June, lowering the likelihood of an interest rate cut by the Fed this month. An ounce of spot gold traded at $1 397.01 at 18h20.
Oil
Brent crude ticked higher on Friday, supported by tensions over Iran and this week’s decision by oil cartel OPEC and its allies to extend a supply cut deal until next year. At 18h20, a barrel of Brent crude traded at $64.96
Our daily update
Below a summary from Peregrine Treasury Services weekly wrap as published on Friday. We highlight the part that specificially speaks about South African equities.
SOUTH AFRICAN EQUITY
Down around 2.96% since last Friday, Truworths share price was seen falling over nine percent over the course of Tuesday and Wednesday, based on the back of news that the retail firm would be looking to restructure their debt pile, which now sits at around R800 million. Over the last 18 months, foot traffic through most retail stores has declined by more than two percent, mainly due to a slowing global economy. Truworths’ U.K. shoe wear company called Office, generated around 27.00% of the company’s revenue and ten percent of their overall profit, but remains the main contributor to the company’s growing debt pile in an extremely competitive footwear industry. Truworths opened Friday’s trading day at R68.49
Anheuser-Busch InBev have made a move to list on the Hong Kong Stock Exchange in order to sell off parts of its Asia Pacific beer unit. Trading of the shares will officially commence on 19 July 2019. AB Inbev opened Friday’s trading day at R1,315.00
Quilter is said to be mulling over the sale of their Old Mutual Wealth Life Assurance business in the U.K. The potential sale of the Old Mutual Wealth Life Assurance is not necessarily related to the net outflows witnessed in 2018, if connected at all. This decision rather forms part of the company’s long-term strategy to strip non-core assets from out its business model, as Old Mutual Wealth Life Assurance has never been part of Quilter’s main strategic focus. Should the sale occur, a special dividend could possibly be distributed to shareholders, while any remaining profits from the sale would be invested into bettering the company’s vertical integration as a whole. This would potentially mean a positive outcome for all parties. Quilter opened Friday’s trading day at R25.90
Here’s some of the bigger movers on the JSE for the 2019 year so far, painting a relatively clear picture that the resource sector’s performance stands head and shoulders above most others:
Read the full weekly market wrap here
SOUTH AFRICAN EQUITY
Down around 2.96% since last Friday, Truworths share price was seen falling over nine percent over the course of Tuesday and Wednesday, based on the back of news that the retail firm would be looking to restructure their debt pile, which now sits at around R800 million. Over the last 18 months, foot traffic through most retail stores has declined by more than two percent, mainly due to a slowing global economy. Truworths’ U.K. shoe wear company called Office, generated around 27.00% of the company’s revenue and ten percent of their overall profit, but remains the main contributor to the company’s growing debt pile in an extremely competitive footwear industry. Truworths opened Friday’s trading day at R68.49
Anheuser-Busch InBev have made a move to list on the Hong Kong Stock Exchange in order to sell off parts of its Asia Pacific beer unit. Trading of the shares will officially commence on 19 July 2019. AB Inbev opened Friday’s trading day at R1,315.00
Quilter is said to be mulling over the sale of their Old Mutual Wealth Life Assurance business in the U.K. The potential sale of the Old Mutual Wealth Life Assurance is not necessarily related to the net outflows witnessed in 2018, if connected at all. This decision rather forms part of the company’s long-term strategy to strip non-core assets from out its business model, as Old Mutual Wealth Life Assurance has never been part of Quilter’s main strategic focus. Should the sale occur, a special dividend could possibly be distributed to shareholders, while any remaining profits from the sale would be invested into bettering the company’s vertical integration as a whole. This would potentially mean a positive outcome for all parties. Quilter opened Friday’s trading day at R25.90
Here’s some of the bigger movers on the JSE for the 2019 year so far, painting a relatively clear picture that the resource sector’s performance stands head and shoulders above most others:
- Impala Platinum: up 99.59%
- Kumba Iron Ore: up 79.83%
- Sibanye Gold: up 59.18%
- Tongaat Hulett: down 76.32% (trade halted)
- Rebosis Property Fund: down 74.35%
- Omnia: down 62.66%
- Brait: down 36.33%
Read the full weekly market wrap 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.
For the first trading week of July 2019, the market is down just over 1% with it currently sitting at -1.04% in the first trading week of the 2nd half of 2019. On the bright side though is the fact that the South African Rand has been very strong recently with it breaking through the R14/$ barrier for the first time in months. Sadly strong jobs numbers in the US reduced the odds of a FED rate cut which saw the US dollar strengthen and the Rand trading well above $14 again.
For more on daily market movements see our 2019 Calendar tracker.
But we as South African investors are losing out in Dollar terms. Largely due to continued Rand weakness not only over the short term but over the last couple of years. We continue to advise investors to take money out of South Africa and invest it offshore. Looking for ideas for investments to make? Go read this article
For the first trading week of July 2019, the market is down just over 1% with it currently sitting at -1.04% in the first trading week of the 2nd half of 2019. On the bright side though is the fact that the South African Rand has been very strong recently with it breaking through the R14/$ barrier for the first time in months. Sadly strong jobs numbers in the US reduced the odds of a FED rate cut which saw the US dollar strengthen and the Rand trading well above $14 again.
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