Taking Stock - Optimism on a COVID-19 Vaccine.

“Optimism on a COVID-19 Vaccine Continues to Push Markets Higher”

article image

MARKET COMMENTARY

SOUTH AFRICA

 

The local stock benchmark closed 0.3% higher on Friday (now at 57,183 index points) erasing an early decline, as market giant Naspers extended its gains and sentiment toward miners picked up during the session. Naspers rose 1% to contribute the most index points to the Johannesburg benchmark’s advance, adding to Thursday’s 4% jump after partly owned Chinese internet behemoth, Tencent Holdings, delivered estimate-beating earnings. Prosus NV, which holds Naspers’s 31% Tencent stake, gained 0.4%. Anglo American 0.8% gain provided the biggest boost to the overall market. Gold producers headed higher for a second day as bullion prices rose, with Harmony Gold adding 2.5%.

 

EUROPE

 

European stocks closed slightly higher Friday as investors struck a positive tone on the prospect of an effective coronavirus vaccine. The pan-European Stoxx 600 closed fairly flat after initial losses, with sectors and major bourses mostly finishing in positive territory. For the week, the index closed up by around 3.5%. Pfizer’s news on Monday that the vaccine it is developing with BioNTech was more than 90% effective in a trial has helped to buoy sentiment this week. However, mid-week traders worried that a rising number of coronavirus cases could hit the economy significantly before a vaccine arrives.

 

ASIA

 

Asia markets bounced this morning as 15 economies in the region signed a deal that formed the world’s largest trade alliance. Australia, meanwhile, halted trading shortly after markets opened. The trade deal, signed on Sunday, aims to gradually reduce tariffs across many areas The Regional Comprehensive Economic Partnership is now the world’s largest trade bloc, a deal that excludes the US. It marks the first time that East Asian powers China, Japan and South Korea are in a single trade agreement. Japan’s economy rebounded sharply, growing an annualized 21.4% in the third quarter, data showed today. On a quarterly basis, the economy grew 5%, better than forecasts of 4.4%.

 

UNITED STATES

 

US stocks rose on Friday as investors bet again on stocks that would benefit from a potentially effective vaccine and economic recovery next year. The S&P 500 advanced 1.4% and posted a record high. The Dow Jones Industrial Average also jumped 1.4%, while the Nasdaq Composite advanced 1%.The Russell 2000, which tracks small-cap stocks, jumped more than 2% to an intraday record, and posted its first all-time closing high since August 2018. At the sector level, energy and industrials rose 3.8% and 2.2%, respectively, to lead the S&P 500 higher. Financials were up more than 1%.

 

CURRENCIES

 

The dollar was hemmed into a narrow range this morning, as traders weighed the economic impact from a resurgence of global coronavirus cases against prospects for a working vaccine that could help reignite global growth. More than 54.01 million people have been reported to be infected by the coronavirus globally, with death toll exceeding 1.3 million. The rand firmed against the dollar on Friday, as it closed out the day 0.93% stronger at R15.05. The local currency was trading around R15.47 to the greenback this morning.

 

COMMODITIES

 

Gold prices inched up on Monday helped by a softer dollar and mounting coronavirus cases in the United States that escalated concerns of the pandemic's impact on the pace of economic recovery. President-elect Joe Biden's top advisers called for urgent action to address the nation's "deeply alarming" COVID-19 crisis on Sunday, while the number of infection cases in the United States crossed the 11-million mark. Oil prices edged up in early trade today, recouping some losses from the previous session as hopes that OPEC+ will continue to curb output offset concerns of weaker fuel demand amid rising COVID-19 cases and higher production from Libya.

DOMESTIC COMPANIES

CHOPPIES ENTERPRISES (CHP) 0.0%

 

The Botswana-based discount retailer resumed trading on the JSE on Friday after a 24-month suspension, due to legal and accounting scandals related to its inventory levels. The group has its primary listing on the Botswana Stock Exchange (BSE) and a secondary list in the JSE, which was suspended in November 2018, after its share price tumbled 60% in September 2018 on the news it would delay publication of its financial statements. “Following extensive engagement, the JSE has agreed to lift the suspension of the company’s shares and to recommence trading on the JSE from today, 13 November 2020,” the company said in a statement.

 

ANCHOR GROUP (ACG) +5.1%

 

The JSE-listed investment group is the latest to announce plans to delist from the stock exchange after six years on the mainboard. The investment company, which was founded in 2012 by CEO Peter Armitage, and listed in September 2014 is making shareholders a R4.25 per share offer, around R900 million if accepted and will see the firm delist in 2021. “This is an exciting next step in the evolution of our group. We have built critical mass, with over 15 000 clients and over R65 billion of assets under management and administration, and we believe we will better service our clients in the long term as an unlisted entity”, the CEO said in a statement.

GLOBAL COMPANIES

NISSAN (7201) +5.4%

 

The Japanese automaker reported a loss of 44.4Bn yen ($421 million) in the third quarter, as the global pandemic hit profitability and the group fights to restore its reputation after the scandal surrounding its former star executive Carlos Ghosn. Ghosn was arrested two years ago, with prosecutors charging him with hiding 9.3Bn yen in compensation, enriching himself at Nissan’s expense. The group’s quarterly sales dipped to 1.9 trillion yen ($18Bn) from 2.6 trillion yen in the previous period. “Global sales are expected to recover to pre-pandemic levels by December, if improvements continue at the current pace”, the group said in a statement.

 

DRAFTKINGS (DKNG) +3.9%

 

The US based fantasy sport and betting provider posted better-than-expected Q3 results and a surge in users. The return of major professional sports, such as the NFL, Major League Baseball, NBA, and the NHL, has helped the sports betting group double its revenue to $133 million from $67 million in the same period a year ago and slightly topping the $132 million called by analysts. The group experienced a 64% surge in subscribers to a million monthly unique users or what the group calls players, with average monthly revenue per user dropping from $36 to $34. The business however still recorded a 57 cents loss per share, which was lower than the 61 cents expected by the Street.

Download full report here.

Share now
About the Author
avatar

Research Team

Media, Sasfin Wealth

Related Articles
articles image

Taking Stock -South Africa’s Unemployment Rate Spikes.

By Research Team

articles image

Taking Stock - South Africa will open up travel to all countries.

By Research Team

©2019 Sasfin. All right reserved. Financial Services Provider (FSP) 23833 and Registered Credit Provider NCRCP22

;