Porsche Cuts FY 2024 Profit Forecast

LOCAL MARKET COMMENTARY

The Top 40 Index and the broader All Share Index both fell by 0.2% on the stock market, ending at 73,580 and 80,620 points, respectively. State-owned Transnet, already struggling with port backlogs from under-investment in equipment and maintenance, announced that bad weather has further disrupted operations at four of its seven ports: Cape Town, Saldanha, Port Elizabeth, and Ngqura. Additionally, Shell is seeking government permission to drill up to five ultra-deep offshore wells off the west coast of South Africa, according to a draft scoping report by independent environmental consultancy SLR.

EUROPEAN MARKET COMMENTARY

European stocks closed lower on Tuesday, with the Stoxx 600 index down 0.99%, as investors reacted to political uncertainty in France following Sunday's election. Retail stocks saw the biggest decline, dropping 1.65%. The UK's FTSE 100 slipped in the afternoon after initially resisting the downward trend, despite the recent victory of the Labour Party, which is seen as supportive of UK assets and house builders. The Paris CAC 40 index fell 1.81% due to concerns about a hung parliament and potential political instability.

US MARKET COMMENTARY

On Tuesday, the S&P 500 and Nasdaq reached record-high closes, driven by gains in Nvidia after U.S. Federal Reserve Chair Jerome Powell suggested that more positive economic data could support the case for rate cuts. Nvidia, an AI chipmaker, climbed 2.5%, which helped balance out declines in other chip stocks. Key inflation data, including the consumer price index on Thursday and the producer price index on Friday, is expected this week. Powell testified before Congress, noting that while inflation is still above the 2% target, it has been improving, and more good data could further justify interest-rate cuts.

ASIA MARKET COMMENTARY

Asia-Pacific markets had mixed results this morning as investors evaluated inflation data from China and Japan. In China, the consumer price index rose by 0.2% in June, below the 0.4% expected and down from 0.3% in May. The producer price index fell by 0.8% year-on-year, matching expectations and improving from May’s 1.4% decline. In Japan, the corporate goods price index increased by 2.9% in June, up from a revised 2.6% in May. Japan's Nikkei 225 continued to rise, gaining 0.25% and approaching its all-time intraday high.

CURRENCY MARKET COMMENTARY

The South African rand edged lower on Tuesday after Federal Reserve Chair Jerome Powell did not provide a clear indication about imminent interest rate cuts. This morning, the dollar strengthened, rebounding from a three-week low, as Powell struck a cautious tone on the timing of U.S. interest rate reductions.

COMMODITY MARKET COMMENTARY

Gold prices remained stable this morning as investors awaited key U.S. inflation data, which could provide insight into the Federal Reserve's future interest rate decisions. Meanwhile, oil prices rebounded after three days of declines, driven by an industry report showing a drop in U.S. crude and fuel stockpiles, indicating steady demand, and an improved outlook for interest rate cuts.

British American Tobacco PLC (BTI) +0.85%

British American Tobacco announced it bought back 185,000 of its shares at prices ranging from 2453.00 to 2476.00 pence on July 8, 2024, as part of a buyback program authorized by shareholders on April 24, 2024. The average price paid was 2466.6386 pence per share. The company plans to cancel these shares, leaving 2,220,151,052 shares in circulation and 133,277,344 shares in treasury.

Mustek Limited (MST) +4.39%

Mustek has announced that Standard Bank has acquired a 14% beneficial interest in its securities, as per section 122 of the Companies Act and section 3.83(b) of the JSE Limited Listings Requirements. Mustek has also filed the necessary notice with the Takeover Regulation Panel as required by section 122(3)(a) of the Act.

Porsche AG (P911) +0.42%

On Tuesday, Porsche Automobil Holding announced it has lowered its 2024 after-tax group profit forecast to a range of 3.5 billion euros ($3.78 billion) to 5.5 billion euros, following an updated forecast from Volkswagen.

Volkswagen AG (VOW) +0.18%

On Tuesday, Volkswagen Group lowered its operating returns forecast for 2024 to 6.5-7% from 7-7.5%. The Audi brand is considering closing its Brussels site due to low demand for its higher-end electric cars. Volkswagen stated that expenses related to this decision, along with other unexpected costs in the second quarter, will impact the 2024 financial year by up to 2.6 billion euros ($2.8 billion).

BP plc (BP) -4.30%

On Tuesday, BP announced that weak refining margins and lower oil trading results would negatively impact its second-quarter profit by up to $700 million, causing its shares to drop by over 4%. The company cited significantly lower refining margins due to weak diesel prices and narrower North American heavy crude differentials affecting its Whiting refinery in Indiana. Despite high refinery maintenance in the quarter, an earnings boost of around $500 million is expected as operations resume at the Whiting refinery. BP also anticipates charges of $1 billion to $2 billion, primarily related to a review of its Gelsenkirchen refinery in Germany.

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