Sinopec Reports 2.6% Increase in First-Half Profit.

LOCAL MARKET COMMENTARY

On the Johannesburg Stock Exchange, the blue-chip Top 40 Index and the All Share Index closed up 0.73% and 0.87%, respectively, ending last Friday at 76,971 and 84,351 points. Domestic investors are now looking ahead to July's producer inflation, money supply, trade, and budget balance figures for insights into the health of South Africa's economy. Grindrod Limited’s share price dropped over 4% on Friday, closing at R15.12 per share, following the release of its interim financial results for the six months ended June 2024, which were impacted by "logistics constraints."

EUROPEAN MARKET COMMENTARY

Europe's STOXX 600 closed near session highs on Friday, driven by broad-based gains. A Reuters report indicated that a growing number of European Central Bank policymakers are supporting another interest rate cut in September, with only significant data surprises potentially delaying the move. At the Jackson Hole symposium, Bank of England Governor Andrew Bailey remarked that inflation pressure in the U.K. economy seems to be easing compared to recent years.

US MARKET COMMENTARY

U.S. stocks rallied on Friday after dovish comments from Federal Reserve Chair Jerome Powell reinforced expectations of a rate cut in September. All three major indexes posted weekly gains, building on last week's strong performance. Looking ahead, the Fed will have important economic data to assess this week, including the Commerce Department's revised second-quarter GDP and the Personal Consumption Expenditures (PCE) report, which features the central bank's preferred inflation measure, the PCE price index.

ASIA MARKET COMMENTARY

Asia-Pacific markets were mixed this morning as tensions in the Middle East escalated with Israel and Hezbollah exchanging strikes. Investors in the region are also focused on China's central bank's medium-term lending rates and Singapore's July manufacturing data, both of which are expected to provide further economic insights.

CURRENCY MARKET COMMENTARY

The South African rand surged on Friday following remarks from Federal Reserve Chair Jerome Powell, which indicated an upcoming interest rate cut in September. The dollar weakened, while the British pound reached its highest level in over two years, driven by Powell's clear signal that the anticipated U.S. rate cut is imminent.

COMMODITY MARKET COMMENTARY

Gold prices rose over 1% on Friday as the dollar and Treasury yields fell after Federal Reserve Chair Jerome Powell hinted at a possible interest rate cut in September. Meanwhile, oil prices continued to climb this morning due to concerns that the Gaza conflict could spread and disrupt oil supplies in the Middle East, along with optimism that U.S. rate cuts could boost global economic growth and fuel demand.

Gold Fields Limited (GFI) -7.84%

A gross interim dividend of 300 SA cents per share will be paid on 16 September 2024, down from 325 SA cents in 2023. In the second quarter of 2024, the company produced 454 000 ounces of gold, slightly down from 464 000 ounces in the previous quarter. Revenue per ounce increased to $2,337, while the All-In Sustaining Cost (AISC) rose to $1,751 per ounce. Net debt reached $1.153 billion. Profit attributable to shareholders for the six months ended June 2024 was $389 million, or 43 cents per share, down from $457.8 million (51 cents per share) the previous year. Headline earnings were $320.7 million, or 36 cents per share, compared to $457.7 million (51 cents per share) in 2023.

African Rainbow Minerals Limited (ARI) +0.74%

For the financial year 2024 (F2024), headline earnings are expected to drop by 40% to 50% compared to the previous year, falling to between R4.49 billion and R5.39 billion (from R8.98 billion in F2023). This translates to a decrease in headline earnings per share to between 2,291 and 2,749 cents, down from 4,582 cents in F2023. Basic earnings are also projected to decline significantly by 60% to 70%, ranging between R2.42 billion and R3.23 billion, with basic earnings per share decreasing to between 1,236 and 1,648 cents (compared to 4,121 cents in F2023). The decline in earnings is primarily due to lower US dollar 6E PGM basket and thermal coal prices, partially offset by a weaker rand/US dollar exchange rate and higher export iron ore prices.

Grindrod Limited (GND) -4.12%

Port volumes increased by 18% to 6.9 million tonnes, while dry bulk terminal volumes grew by 3% to 8.4 million tonnes. Financially, the company achieved a core EBITDA of R1.0 billion and core headline earnings of R562 million. Cash generated from operations rose by 13% to R425 million, and an interim ordinary dividend of 23.0 cents per share was declared.

Sinopec Oilfield Service Corporation Class A (600871) -1.06%

China's Sinopec reported a 2.6% increase in net profit for the first half of the year, reaching 37.1 billion yuan ($5.21 billion), driven by rising oil prices. However, the world's largest oil refiner saw a 1.1% decline in sales to 1.58 trillion yuan and a 5.5% drop in ethylene production. Capital expenditure during this period amounted to 55.9 billion yuan. The company reported slight increases in crude oil output by 0.6% and natural gas production by 6%, while crude processing volumes grew by just 0.1%, reflecting higher crude costs and weak domestic fuel demand.

Workday Inc. Class A (WDAY) +12.49%

Workday exceeded Wall Street expectations for second-quarter revenue, reporting $2.09 billion compared to the anticipated $2.07 billion, and announced a $1 billion stock buyback plan, boosting its shares by around 11% in extended trading. The company also raised its full-year adjusted operating margin forecast to 25.25% from 25% and reported a second quarter adjusted operating margin of 24.9%, slightly above the consensus. Subscription revenue matched estimates at $1.90 billion, and earnings per share rose to 49 cents, up from 30 cents a year ago.

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