Daily Report 18 April 2024

SA Company News:

The Johannesburg Stock Exchange All-Share Index closed unchanged at the 72 995 level.

In a trading update from the BHP Group, the company said that copper production was up 7% at 465 900 tons, underpinned by increased production from its biggest operations. Iron ore production rose 3% y/y to 61.5 Mt. It cited heavy rainfall, work on its rail infrastructure and a bushfire for the decline in output, compared with three months earlier. The company produced 6% more metallurgical coal, also used in steelmaking, than in December quarter. Quarterly production of that commodity totaled 6 million tons.

MTN Group has opened a research lab in partnership with Huawei in Johannesburg. The establishment of the lab aims to deepen collaboration between the two companies, thereby accelerating digital transformation and sustainable development across Africa. MTN said that the lab plays a crucial role in its strategy to move beyond the traditional telecommunications operator role to become a leading provider of comprehensive technology services. Research and development within the lab will concentrate on areas including 5G and 5G-A technologies, artificial intelligence, big data analytics, cloud computing, FTTH, automation and digital financial services.

 

SA Economy:

Stats SA released annual Consumer Price Inflation (CPI), which came in at 5.3% in March 2024, down from 5.6% in February 2024 and increasing by 0.8% month-on-month. The main contributors to the 5.3% annual inflation rate were, housing and utilities higher by 5.9% year-on-year, miscellaneous goods and services rising by 8.5%, food and non-alcoholic beverages up by 5.1% and transport increasing by 5.3%.

Retail sales fell by 0.8% over a year ago in February 2024, following a 2% decline in the previous month. This is the second consecutive month of decreases in retail activity, mainly influenced by significant drops in sales of textiles, clothing, footwear and leather goods.

 

Global Economy:

The Consumer Price Inflation (CPI) rate in the Euro Area came in at 2.4% year-on-year in March 2024, slightly exceeding the European Central Bank’s target of 2%.

The monetary policy picture globally hasn’t changed much, markets are now only expecting the first full rate cut from the US Fed in November, while UK CPI came in higher-than-expected yesterday, this may rule out the case for a BOE rate cut in May but expects a June rate cut.

 

Global Company:

The FTSE 100 closed 0.35% higher at 7 847.

Mining stocks outperformed as iron ore prices jumped, with Rio Tinto Plc gaining as much as 3.4% after the company said that elevated steel exports by China will continue support demand for the raw material.

LVMH, the owner of brands such as Louis Vuitton, Tiffany & Co. and Bulgari, reported that sales for the quarter ending in March rose 3% on an organic basis to 20.69 billion euros ($22 billion), matching analysts’ expectations, thereby offering an element of reassurance to investors concerned about the industry’s outlook, particularly in China.

The Hang Seng Index is trading 0.90% higher at 16 398.

Fitch Ratings agency cut its outlook on long-term default ratings for Alibaba and Tencent to “negative” from “stable.”

In China, the Shanghai Composite is up 0.75% to 3 085.

The Dow Jones Industrial Average closed 0.12% lower to 37 753, while the S&P 500 closed 0.58% lower at 5 022.

Tech stocks weighed heavily on the indexes, Nvidia was lower by 3.9%, Tesla falling 1.1%, AMD down 5.8% and Meta Platforms also down 1.1%.

United Airlines shares rose more than 16% after the company reported a less-than-expected loss than analyst expected. For the first quarter, United Airlines posted an earnings per share loss of $0.15, narrower than the $0.57 expected.

 

Commodities:

Gold is trading flat at $2 374/oz, while Platinum is lower by 1.58% to $937/oz.

Brent crude was 2.26% lower at $87.02 a barrel.

 

Currencies:

The rand traded at R18.99 against the US Dollar, R23.68 against British Pound and R20.29 against the Euro.

The Euro is slightly firmer against the US Dollar to trade at $1.0680.