LOCAL MARKET COMMENTARY
The Johannesburg Stock Exchange closed slightly higher on Friday, with the Top 40 index gaining 0.05% to end at 77,151 points, and the All Share index rising 0.1% to 85,608 points. Market sentiment was boosted by the South African Reserve Bank's modest interest rate cut and S&P Global's improved outlook on the country’s credit rating. Meanwhile, Reserve Bank Governor Lesetja Kganyago revealed that the review of the 3% to 6% inflation target is nearing completion, with final discussions underway with the Treasury, though no timeline has been set. The target, unchanged since 2000, aims to anchor inflation expectations at its midpoint.
EUROPEAN MARKET COMMENTARY
European stocks closed higher on Friday as weak economic data across the region fuelled expectations of central bank rate cuts. In the U.K., the pound hit a six-month low against the dollar after retail sales fell 0.7% in October, missing forecasts of a 0.3% decline. Despite weak business activity data, London’s FTSE 100 had its best session since August, with hopes that the Bank of England may accelerate rate cuts next year. The euro also slid as eurozone business activity dropped sharply in November, with the PMI falling to 48.1. Meanwhile, Germany’s economy grew by a modest 0.1% in the third quarter, slightly below earlier estimates.
US MARKET COMMENTARY
Wall Street ended higher on Friday, with all major indices posting weekly gains as strong U.S. economic data boosted investor confidence. Business activity reached a 31-month high in November, fuelled by optimism about lower interest rates and pro-business policies from President-elect Donald Trump's upcoming administration. Market expectations for the Federal Reserve's December decision remain mixed, with a 59.6% chance of a 25-basis-point rate cut, according to the CME Group's FedWatch Tool.
ASIA MARKET COMMENTARY
Asia-Pacific markets opened higher this morning as investors prepared for key economic data releases this week. China’s industrial data and India’s Q3 GDP figures are in focus, along with Singapore's October inflation report expected to show a drop to 1.8%, the lowest since March 2021. Other highlights include South Korea's central bank rate decision and Australia’s October inflation data, both due Wednesday, and Tokyo’s November inflation numbers on Friday, often viewed as a bellwether for Japan’s national trends.
CURRENCY MARKET COMMENTARY
The South African rand weakened slightly in early Friday trading, as the US dollar reached a 13-month high in global markets. The dollar edged lower this morning, easing from recent gains as investors anticipated that the incoming U.S. Treasury secretary would stabilize the bond market. This expectation drove yields down, reducing the dollar's rate advantage.
COMMODITY MARKET COMMENTARY
Gold prices dipped this morning from a three-week high as investors took profits and adjusted expectations for Federal Reserve rate cuts, awaiting more data to clarify the interest rate outlook. Meanwhile, oil prices remained near two-week highs after a 6% surge last week, driven by escalating geopolitical tensions involving Russia and Iran, which heightened concerns over potential supply disruptions.
Remgro Limited (REM) +1.07%
The group delivered strong results despite a challenging environment, with revenue up 6% driven by robust volume growth across divisions. Adjusted EBITDA increased by 13%, improving the EBITDA margin to 13.8%, compared to 13.0% in the previous period. Adjusted earnings grew by 25%, showcasing solid operational performance, while the leverage ratio slightly improved to 3.6x. Notable metrics include a 222% surge in operating profit and an improved cash conversion rate of 102%, up from 63% in the prior period.
Novus Holdings Limited (NVS) -2.56%
The group reported a solid performance over six months, with revenue rising 3.3% to R2.088 billion and operating profit increasing to R196.4 million. Headline earnings per share more than doubled to 59.36 cents, with diluted headline earnings per share also rising significantly to 55.56 cents. Net asset value per share edged up to 728.27 cents, although the closing cash position declined to R310 million. No dividends were declared, consistent with the prior year.
Air New Zealand Limited (AIR) +0.94%
Air New Zealand has adjusted its earnings forecast for the first half of FY2025 due to ongoing global engine maintenance delays, which have sidelined up to 16% of its fleet, including six Airbus Neo and four Boeing 787 aircraft. The airline now anticipates earnings before taxation to fall between NZ$120 million and NZ$160 million, a decrease from NZ$185 million during the same period last year, underscoring the continued challenges posed by limited aircraft availability.
Gap Inc. (GAP) +12.84%
Gap shares soared 16% during the session on Friday following the retailer's announcement of growth across all four of its brands for the first time in nearly two years. This strong performance led the company to revise its annual sales forecast, now projecting a 1.5% to 2% increase in net sales, up from its earlier prediction of modest growth. While Target's performance remains subdued, Gap's outlook aligns with Walmart's expectation of steady consumer spending, hinting at a potentially uneven holiday shopping season.
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