Markets WRAP: Rand closes at R14.36/$
Rand closes at R14.36/$
The local unit ended the day's session at R14.36 to the dollar, having opened at R14.39.
Earlier on Wednesday Statistics SA releases consumer inflation for April which eased to 4.4%. This was below market expectations below 4.5%. It had a muted impact on the rand's movements.
Senior dealer at TreasuryONE Andre Botha expects the rand's movements to be affected by the release of US Fed minutes this evening.
"The real potential market mover could be the Fed minutes that will be released this evening and the market will be looking at any indication if the Fed has changed some of their dovish feathers to more hawkish," Botha said.April consumer price inflation stays in target range
Barloworld appoints finance director
Barlowold has appointed a new finance director - Nopasika Lila. Lila's appointment is with effect of August 1, 2019.
The chartered accountant has more than 20 years of experience in finance, corporate governance and the pension industry, Barlowold said in a notice to shareholders.
Lila currently serves on the boards of enX Group Limited, Nampak Limited and Batseta – Council of Retirement Funds of South Africa.
Aspen in discussions with potential Europe partner
Pharmaceutical company Aspen said it is in discussions with a "potential partner" in Europe. This is part of the group's decision to undergo a strategic review of its European and South African Commercial Pharmaceuticals businesses.
The group had first mentioned its review in the release of its interim results in March, 2019.
"As an outcome of the first phase of the South African review it has been decided to split South African Commercial Pharmaceuticals into two distinct divisions in order to achieve heightened product and customer focus.
"The second phase of the review will concentrate on developing strategies specific to each division to optimise value delivery," the group said at the time.
Aspen has assured that the reshaping of the group will be to ensure its sustainable organic growth, especially within emerging markets.
US stock futures decline as tech tensions grow
Todd White, Bloomberg
US equity futures dropped along with European stocks as investors digested the latest developments in the Sino-American confrontation over technology. Oil declined while the dollar and Treasuries were steady before the latest Fed minutes.
Contracts on the S&P 500, Nasdaq 100 and Dow Jones Industrial Average fell with Chinese equities after the White House was reported to be considering blacklisting the Asian nation’s video-surveillance firms.
Qualcomm tumbled in premarket trading after an unfavorable antitrust ruling, while Target shares climbed after its sales beat estimates.
Banks and carmakers led a decline in the Stoxx Europe 600 gauge. Core European sovereign bonds edged higher.
Debt and equity markets are struggling for direction as investors try to size up how much damage the trade war will bring to global economic growth and supply chains, while the Trump administration considers adding video equipment to its growing blacklist of sales to China.MORE HERE
Stocks struggle for traction as tech tensions grow
Todd White, Bloomberg
US equity futures drifted and European stocks edged higher after a mixed session in Asia as investors digested the latest in the Sino-American confrontation over technology. Oil declined and the dollar and Treasuries were steady before the latest Fed minutes.
The Stoxx Europe 600 reversed earlier losses as technology and personal-goods shares advanced. Contracts on the Nasdaq 100 and Dow Jones Industrial Average were steady, after earlier declining with Chinese equities after the White House was reported to be considering blacklisting China’s video-surveillance firms.
Qualcomm tumbled in premarket trading after a report said it received an unfavorable antitrust ruling. Stock and bond markets are fluctuating as investors try to size up how much damage the trade war will bring to global economic growth and supply chains, while the Trump administration considers adding video equipment to its growing blacklist of sales to China.
With traders in wait-and-see mode, the Cboe volatility index has been retreating and on Tuesday touched its lowest level in almost three weeks.
Next up are the minutes from the most recent Federal Reserve policy meeting. The central bank may have “slightly overdone it” by raising interest rates in December, though it’s premature to talk about a rate cut, St. Louis Fed President James Bullard said in a Bloomberg interview.
“There is a broad expectation for a growth slowdown and the trade tensions are really adding to these kinds of worries,” Jingyi Pan, Singapore-based market strategist at IG Ltd., told Bloomberg TV. “A lot of this may not have followed through to the economic data.”
Elsewhere, the pound remained volatile as Minister Theresa May faced pressure to quit as prime minister within days, after she promised Parliament the chance to call a second referendum on Brexit. UK stocks advanced along with gilts.
In Iceland, the currency dropped after the central bank cut interest rates and reversed its economic-growth projection.
April consumer price inflation stays in target range
Annual headline consumer price inflation for April has moderated to 4.4% Stats SA announced on Wednesday morning, a figure in line with the expectations of economists.
This is within the target range of between 3% and 6% set by the SA Reserve Bank, and slightly down from CPI of 4.5% in March.
On a month-on-month basis, inflation increased by 0.6%.
Ahead of Wednesday's announcement, analysts from NKC Economics had projected inflation to stay flat at 4.5%, as did Corporate Treasury Manager at Peregrine Treasury Solutions, Bianca Botes. Inflation for goods increased by 4.2%, up from 4.1% in March. Inflation for services increased by 4.6%, down from 4.9% reported in March.
The main drivers of yearly inflation were alcoholic beverages and tobacco, transport and recreation and culture items. Senior dealer at TreasuryONE, Andre Botha, said he expects the rand's reaction to the inflation figures to be muted."
The real potential market mover could be the [US] Fed minutes that will be released this evening and the market will be looking at any indication if the Fed has changed some of their dovish feathers to more hawkish," Botha said."We expect the rand, to trade sideways in a tight range as we head into the business end of the week."
Tiger Brands profit drops 12% in wake of listeriosis outbreak
Tiger Brands said first-half profit fell as Africa’s biggest publicly traded packaged-food company battles to overcome weak economic growth and the aftermath of a deadly outbreak of listeriosis.
Earnings before one-time items dropped 12% to R7.59 a share in the six months through to March.Continue Reading
Sasol's US Lake Charles cost estimate jumps to $12.9 billion
Sasol has increased the cost estimates for its Lake Charles Chemicals Project in Louisiana in the US to as much as $12.9bn.
That’s almost $1bn more than the company expected three months ago. Sasol said in February that capital costs at Lake Charles had increased to as much as $11.8BN and the startup would be delayed by as many as five months.
The latest estimates are at least 45% higher than earlier targets for capital expenditure.
US stock futures mixed as US-China tech news mulled
Adam Haigh, Bloomberg
US stock futures slipped and European contracts were little changed alongside Asian equities as traders digested the latest US-China confrontations over technology. Treasuries were little changed before minutes from the Federal Reserve’s last policy meeting.
Japanese shares hit session lows and US futures dipped after reports that the Trump administration is deliberating blacklisting China’s surveillance firms.
Shares in South Korean and Hong Kong fluctuated, and Australian stocks remained near an 11-year high. They fell in Shanghai.
US stocks closed higher Tuesday after the US decided to grant limited relief for consumers and carriers that do business with Huawei.
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.
US President Donald Trump held off on blacklisting Huawei on concerns it could disrupt China trade talks and only took action after discussions stalled, people familiar with the talks said.
Next up are the minutes from the most recent Federal Reserve policy meeting. The central bank may have “slightly overdone it” by raising interest rates in December, though it’s premature to talk about a rate cut, said St. Louis Fed President James Bullard.
“There is a broad expectation for a growth slowdown and the trade tensions are really adding to these kinds of worries,” Jingyi Pan, Singapore-based market strategist at IG, told Bloomberg TV. “A lot of this may not have followed through to the economic data.”
Elsewhere, the pound remained volatile after UK Prime Minister Theresa May said she’s prepared to offer parliament a vote on holding a second Brexit referendum. The British currency spiked higher on her remarks before giving up those gains as some key lawmakers responded with skepticism. Crude oil retreated.