SA Company News:
The Johannesburg Stock Exchange All-Share Index closed 0.81% higher at the 81 094 level.
Pick n Pay said that they will issue 252.2 million new shares at R15.86 per share in a rights offer to raise R4 billion, as the grocery group looks to reduce its debt. The rights offer price represents a discount of about 32.48% to the theoretical ex-rights price calculated using Wednesday’s closing price of R27.39. Shareholders will subscribe for the new shares in the ratio of 51.11 rights offer shares for every 100 Pick n Pay ordinary shares they currently hold. Pick n Pay said it has received a firm commitment from its controlling and founder shareholder Ackerman Investment Holdings to take up R1.011 billion of the offer.
SA Economy:
Mining production in remained flat year-on-year in May 2024, following an upwardly revised 1.4% increase in the previous month. The primary positive contributors were coal, which grew by 7.0%, adding 1.6 percentage points, and chromium ore, which increased by 17.1%, contributing 0.7 percentage points.
Gold production declined by 9.0% and contributing -1.3 percentage points, and PGMs, down by 4.1% and contributing -1.1 percentage points, were the main negative contributors.
Manufacturing production dropped by 0.6% year-on-year in May 2024, following a downwardly revised 4.9% increase in the previous month. The decline was primarily driven by reduced output in basic iron and steel, non-ferrous metal products, metal products and machinery (down 8.1% compared to a 3.6% rise in April), and motor vehicles, parts and accessories, and other transport equipment (down 11.8% compared to a 7% rise in April).
Global Economy:
The annual inflation rate in the US fell for a third straight month to 3.1% in June 2024, the lowest since January, compared to 3.3% in May. The decrease indicated that the disinflation process is under way, following a brief uptick in the first quarter.
The annual inflation rate in Germany fell to 2.2% in June 2024, down from 2.4% in the previous month, consistent with preliminary estimates.
US CPI data was cooler than expected across the board. Core CPI rose by 0.1% MoM in June, lower than the 0.2% forecast, while the YoY pace eased to 3.3% from 3.4% in May. Headline CPI was negative at
-0.1% MoM from flat previously and expectations of +0.1% and YoY was at 3.0% from 3.3% and 3.1% expected.
Initial Jobless Claims fell to 222 000 for the week ending 6th July, down from the prior 239 000 and below the 236 000 forecast.
Imports to China dropped by 2.3% from the prior year. Exports from China advanced 8.6% year-on-year.
China’s trade surplus surged to $99.05 billion in June 2024 from $69.80 billion in the same period a year earlier.
Global Company:
The FTSE 100 closed 0.36% higher at 8 223. Pennon shares led gains, climbing 9.7%, after the water company named Laura Flowerdew as its new CFO.
The Hang Seng Index is trading 2.24% higher at 18 239. Gains were broad-based following a Bloomberg News report indicating that some ETFs favored by China’s sovereign wealth fund had experienced significant inflows in recent weeks.
In China, the Shanghai Composite is down 0.14% to 2 966.
The Dow Jones Industrial Average closed 0.08% higher to 39 753, while the S&P 500 closed 0.88% lower at 5 584.
U.S. equities experienced significant sector rotation. Nvidia shares dropped by over 5.5%, however small-cap stocks, as measured by the Russell 2000 Index, rose as much as 3.6%.This rally was driven by expectations of a Federal Reserve interest rate cut in September and hopes for an economic soft landing, supported by the latest inflation data.
Tesla shares closed 8.4% lower on reports that it will delay the Robotaxi launch to October from August.
Commodities:
Gold is trading higher by 1.06% at $2 407/oz, while Platinum is higher by 0.72 to $1 002/oz.
Brent crude was 0.41% lower at $84.97 a barrel.
Currencies:
The rand traded at R18.00 against the US Dollar, R23.24 against British Pound and R19.57 against the Euro.
The Euro is firmer against the US Dollar to trade at $1.0870.
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| Market Indicators | |||||||
| Commodities $ | Cross Currencies ($) | Major Indices | |||||
| Gold | 2407.92 | 1.06% | USD/ZAR | 18.00 | Top40 | 74121.69 | 0.87% |
| Platinum | 1002.83 | 0.72% | GBP/ZAR | 23.24 | Dow 30 | 39753.75 | 0.08% |
| Brent | 84.97 | -0.41% | EUR/ZAR | 19.57 | S&P 500 | 5584.54 | -0.88% |
| Copper | 4.50 | -2.44% | EUR/USD | 1.0870 | FTSE | 8223.33 | 0.36% |
| Palladium | 985.60 | -1.37 | USD/JPY | 159.08 | DAX | 18534.56 | 0.69% |
| Iron Ore | 107.75 | -1.11% | BITCOIN | 57057.00 | Shanghai | 2966.21 | -0.14% |
| Source: FACTSET | |||||||