Markets WRAP: Rand closes at R14.38/$

21 May 16:55

Rand closes at R14.38

The rand came full circle and ended the day at R14.38 to the greenback. 

The local unit which opened at R14.38 on Tuesday morning, reached as low as R14.49 during the day's session.

Much of the currency's movements was driven by the market's reaction to developments in the US-China trade talks.

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21 May 16:40

Choppies CEO suspended amid investigation

The board of grocery retailer Choppies has suspended its CEO Ramachandran Ottapathu.

According to a shareholder notice issued by the retailer on Tuesday afternoon, this decision comes following a board meeting on Monday May 20, 2019.

"The board of directors of Choppies hereby informs the Choppies shareholders and the general public that, at a duly convened meeting of the Board held on 20 May 2019, the Board resolved to suspend from duty the Chief Executive Officer of the Company, Mr Ramachandran Ottapathu."

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21 May 15:55

US stocks climb on Huawei reprieve; bonds mixed

US stocks advanced on Tuesday following a mixed session in Asia as the trade-war driven back-and-forth that has dominated markets this month showed few signs of abating. The dollar strengthened while Treasuries slipped.

The S&P 500, Dow Jones Industrial Average and Nasdaq 100 indexes all jumped after the US decision to grant limited relief for consumers and carriers that do business with Huawei Technologies, a day after the White House’s moves against the Chinese telecom giant battered stocks.

Tesla fell as Morgan Stanley analysts slashed their worse-case scenario for the share price to just $10.Risk assets have been whipsawed in May as the world’s largest economies ratchet up both rhetoric and action on trade, with the latest phase focused on Huawei and its suppliers and customers. For all the turmoil a gauge of global stocks remains within 5% of an all-time high, while the S&P 500 is about 3% from a record.

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21 May 15:43

EOH on track to conclude internal investigations by end of May

EOH Holdings on Tuesday issued a shareholder notice indicating its internal investigation of public sector contracts is on track to be concluded on May 31.

"The board will, on receipt of the report, take the necessary time to assess the detail thereof and where necessary engage with relevant stakeholders.

"Following proper and acceptable progress of this process, the key elements of the report will be presented to the market. This is anticipated to be possible in June 2019," the notice read.

EOH internal probe to be completed by the end of May
21 May 14:32

Rand, emerging market currencies on the backfoot amid US-China trade tensions

The rand weakened in early trade on Tuesday as uncertainty around US-China trade talks dampened demand for emerging market currencies.

By 14:15 the local currency had strengthened somewhat to trade at R14.43/$ after opening at R14.38 to the greenback. 

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21 May 12:24

US Futures, Europe stocks advance as bonds drift

Jakob Peterseil, Bloomberg

US equity futures climbed with European stocks following a mixed session in Asia on Tuesday as the trade-war driven turbulence that has dominated markets this month showed few signs of abating.

The dollar strengthened while Treasuries were steady.

Contracts on the S&P 500, Dow Jones Industrial Average and Nasdaq 100 indexes all traded in the green after the U.S. granted limited relief for consumers and carriers using Huawei Technologies, a day after the White House’s moves against the Chinese telecom giant battered stocks.

European shares also rose, with tech firms leading the advance. Chinese equities had the strongest gains in the Asian session, while their Japanese peers ended lower.

A gain for Samsung helped bolster Korean shares, on bets it may benefit from Huawei’s need to shift away from American suppliers.

Many risk assets have been whipsawed in May as the world’s largest economies ratchet up both rhetoric and action on trade, with the latest phase focused on Huawei and its suppliers and customers.

For all the turmoil a gauge of global stocks remains within 5% of an all-time high, while the S&P 500 is about 3% from a record.

Against that backdrop investors will be closely watching a slew of U.S. data this week as well as Federal Reserve policy-meeting minutes due on Wednesday.

“The world of G-10 believes that things get fixed. This is what economists tell them, and so they do not see a reason to panic,” said Sebastien Galy, senior macro strategist at Nordea Investment Funds SA in Luxembourg. “Volatility is set to stay, though it need not mean that equities are always to the downside,” pending clarity on US-China talks before next month’s G-20 summit, he said.

Elsewhere, the pound slipped below $1.27 as Theresa May faced a showdown with her cabinet over trying to get her Brexit deal approved. Turkey’s lira stayed lower after the country’s central bank effectively lowered its main interest rate, undoing a limited tightening of policy.

21 May 09:28

Oil climbs as OPEC signal on output curbs overshadows trade risk

Tsuyoshi Inajima, Bloomberg

Oil rose for a second day on signs OPEC and its allies will extend production cuts beyond June, while a steadily deteriorating US-China trade relationship kept prices from pushing higher.

Futures in New York extended their gains after closing up 0.5% on Monday. Saudi Energy Minister Khalid Al-Falih urged the OPEC+ coalition to “stay the course” on output limits after a meeting in Jeddah over the weekend.

Yemeni rebels backed by Iran said they’d attacked an airport in southern Saudi Arabia, further stoking tensions in the Middle East, while China warned it could retaliate against the US after Washington blacklisted Huawei Technologies Co.

The possible extension of supply curbs by the Organization of Petroleum Exporting Countries and its allies could be a catalyst for oil to resume this year’s rally, which has floundered over the past month.

Rising tension in the Middle East and involuntary output cuts from Venezuela to Russia have also been aiding prices, but the breakdown in relations between the world’s two biggest economies is keeping gains in check.

“OPEC+ is staying on the sidelines for now, reluctant to add significant volumes to markets so long as overall measures of inventories remain apparently adequate,” Citigroup Inc. analysts including Ed Morse wrote in a report. The bank is “cautiously optimistic a trade war today will result in at least an interim trade deal this year.”

West Texas Intermediate crude for June delivery, which expires Tuesday, rose 31 cents, or 0.5%, to $63.41 a barrel on the New York Mercantile Exchange at 7:43 a.m. in London. The contract added 34 cents to $63.10 on Monday.

The more actively-traded July contract climbed 0.5% to $63.54.

Brent for July settlement increased 23 cents, or 0.3%, to $72.20 a barrel on the London-based ICE Futures Europe exchange. It fell 24 cents to $71.97 on Monday.


21 May 08:41

US, Europe stock futures shrug off tech tension

Andreea Papuc, Bloomberg

US and European futures gained, while stocks in Asia were mixed Tuesday as investors digested the broader implications of moves by Washington against Huawei. The dollar rose against peers and the yuan steadied near a six-month low.

Chinese shares had the strongest gains in the Asian session. While they dipped in Tokyo, they ended off their lows. Shares fluctuated in Hong Kong. Samsung Electronics helped bolster Korean shares, on bets it may benefit from Huawei’s need to shift away from US suppliers. Treasury yields stabilized before a slew of U.S. data and minutes on the Federal Reserve’s most recent policy meeting in coming days.

“Chinese firms stand a chance to make up for the supply shortage caused by US ban on Huawei,” said Sun Jianbo, president of China Vision Capital Management in Beijing. “The global telecom supply chain can still work perfectly without the US suppliers. China and US are unlikely to allow the worst-case scenario, which involves putting up trade barriers on all fronts, as it will mean great losses for both parties. So the worst possible case may have been priced in.”

Markets remain on edge as the trade dispute develops with no end sight as had been expected. Semiconductor stocks in the US and Europe were battered Monday after the White House blacklisted China’s top telecom company.

China could retaliate as Chinese companies’ “legitimate rights and interests are being undermined,” Zhang Ming, the nation’s ambassador to the European Union said.

For his part, US President Donald Trump said in an interview he was “very happy” with the trade war and that China wouldn’t become the world’s top superpower under his watch.

Meanwhile, Australia’s dollar dropped with bond yields after the central bank governor flagged that an interest-rate cut will be considered next month. Crude firmed on optimism production curbs from major oil producers will be maintained.

21 May 08:41

Huawei's smartphone plans imperiled by Trump administration ban

Huawei made a pitch to app makers last year: Build software for a new Huawei app store outside China, and we’ll help you inside the world’s most populous nation. China’s largest technology company told potential partners that by the end of 2018, it would have 50 million Europeans using its own app store, rather than Google’s, according to documents viewed by Bloomberg News. Huawei also held talks with European wireless carriers about spreading this new app store even further, people involved in those talks said.

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21 May 08:40

Lonmin plans to cut 4 100 workers as it closes platinum mines

Lonmin plans to cut 4 100 workers at mines that have run out of profitable ore and are being closed. The platinum producer has started a process that's required under South African labour law to carry out the workforce reductions, said Wendy Tlou, a spokesperson for the company.

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