In today's taking stock we discus, Tencent shares fell 3.92% while Alibaba dropped 2.36% and Meituan slipped 5.46%.
6 reading min
05 Jul 2021
SOUTH AFRICAN MARKET COMMENTARY
Stocks on the Johannesburg Stock Exchange close lower on Friday, as the All-Share index posted a 0.35% loss to close at 66,323, while the blue-chip Top 40 index was 0.30% lower. In other news, South Africa’s new vehicle market is making an encouraging recovery from the impact of Covid-19 but sales are only expected to get back to pre-Covid-19 levels by 2023, according to economists and analysts. The rate of change in new vehicle sales is regarded by economists as a leading indicator of changes in economic activity. Data released last week shows that sales of 227 440 vehicles in the first six months of this year are 40.1% higher than the 162 346 units sold in the corresponding period in 2020.
EUROPEAN MARKET COMMENTARY
European stocks closed slightly higher on Friday as investors digested a better-than-expected US jobs report. The pan-European Stoxx 600 provisionally closed up over 0.2%, with travel and leisure stocks climbing 1.6% to lead gains, while banks fell 1.2%. Euro zone producer prices gathered pace in May on the back of rising energy prices, Eurostat revealed on Friday. Factory gate prices across the 19-member common currency bloc rose 1.3% month-on-month and 9.6% year-on-year.
US MARKET COMMENTARY
US stocks rose on Friday and the S&P 500 hit another record high after the June jobs report showed an accelerating recovery for the US labor market. Solid moves by major tech stocks helped support the overall market on Friday, with shares of Apple and Salesforce rising by nearly 2% and 1.3%, respectively. Microsoft jumped 2.2%. The economy added 850,000 jobs last month, according to the Bureau of Labor Statistics. Economists surveyed by Dow Jones were expecting an addition of 706,000. The print topped the revised 583,000 jobs created in May.
ASIAN MARKET COMMENTARY.
Shares in Asia-Pacific were mixed this morning ahead of another meeting between OPEC and its allies. Shares of Chinese tech firms in Hong Kong fell as regulatory fears resurfaced. By Monday afternoon in Hong Kong, Tencent shares fell 3.92% while Alibaba dropped 2.36% and Meituan slipped 5.46%. The losses came after Chinese regulators claimed SoftBank-backed Didi illegally collected users’ personal data and ordered app stores to stop offering Didi’s app. The move came just days after the ride-hailing giant’s market debut on the New York Stock Exchange.
CURRENCY MARKET COMMENTARY
The rand strengthened on Friday, despite concerns over the spread of the coronavirus's Delta variant, while investors awaited US jobs data that could influence the timeline of the Federal Reserve's monetary policy shift. At the close, the rand was 1.27% firmer as it traded at R14.25 to the dollar. Riskier currencies such as the rand thrive on U.S. interest rates remaining low because they benefit from the interest rate differential that increases their appeal for carry trade.
COMMODITIES MARKET COMMENTARY
Gold prices edged lower this morning after hitting a two-week high in the previous session, weighed down by a slight uptick in the dollar, while investors awaited more US economic data for clues on the Federal Reserve’s monetary policy plans. Oil prices fell today, with Brent dropping after four days of gains, as investors and traders awaited crucial talks by OPEC+ following disagreement within the group that could lead to major producers pumping up volumes to grab market share.
Dis-Chem (DCP) -1.5& JSE-listed Dis-Chem, one of South Africa’s largest pharmacy groups, has launched on-demand delivery for online shoppers, offering delivery of a catalogue of 7 000 items within 60 minutes. The items cover healthcare, nutrition, beauty, cosmetics and electrical items. “The launch of Dis-Chem’s DeliverD service will be trialled in selected stores across Johannesburg and other major metropolitan areas before being extended to other regions aligned to Dis-Chem’s footprint,” the company said in a statement on Thursday. “Initially, a limited range of front shop products – health, nutrition, beauty, cosmetics, electrical and baby ranges – will be available during the trial pilot phase,” Dis-Chem said. “Dis-Chem DeliverD complements our existing online offering, and this development taps directly into understanding what our customers want, central to which is convenience. We have seen significant online growth in the past 12 months and the ongoing customer demand for quick, same-day online service was a key driver behind the introduction of this offering,” said executive director Saul Saltzman. Saltzman said delivery times will depend on customer needs, location and the availability of slots. “The trial phase will give loyal Dis-Chem customers the opportunity to try the service and provide feedback which, in turn, will allow Dis-Chem to refine the offering.” Dis-Chem DeliverD will initially be available to customers situated within 10km of the following stores during the trial: Atholl Oaklands (BluBird), Ballito Lifestyle Centre, Boksburg North, Brooklyn, Canal Walk – Century City, Cape Gate, Carlswald, Cavendish/Claremont, Centurion Mall, Clearwater Mall, Cornubia Mall, Farrarmere, Ferndale, Garden Route Mall, Hazeldean Square, Hillcrest, Linksfield, Lynnwood Lane, Mall of Africa, Montana (Kollenade), Nicolway Centre, Northgate, Paarl Mall, Rosebank Mall, Somerset West Mall, Table Bay Mall, The Club Surgical, The Point Centre (Sea Point), Whale Coast Village Mall, Willowbridge Centre and Woodmead.
Ford (FORD) +1.0% Ford Motor’s June and second-quarter sales were below analyst expectations as a global shortage of semiconductor chips caused significant production cuts and inventory constraints. Ford sold 475,327 vehicles during the second quarter, a 9.6% increase from a year earlier when the coronavirus pandemic caused Americans to shelter in place and temporarily closed auto dealerships. Edmunds expected Ford’s sales to rise by 10.5%, while Cox Automotive forecast an increase of 20.5%. For June, the automaker said Friday that its sales declined by 26.9%, including a roughly 30% drop in its F-Series pickups. Ford previously said it expected to lose half of its production in the second quarter due to the chip shortage. Earlier this week, it also announced additional production cuts throughout July due to the problem. Separately, the automaker said reservations for its electric F-150 Lightning pickup that’s due out next year have topped 100,000 since its debut in May. Ford’s sales follow GM and other automakers reporting significant increases in second-quarter sales but at a slower pace through the quarter due to low vehicle inventories caused by the chip shortage.
05 July 2021
4 reading min
Forex Daily Market - The USD-ZAR dipped at the end of the week
In today's market update, the USD-ZAR dipped at the end of the week as the much-anticipated US jobs report released on Friday afternoon seemed to paint a mixed picture on stateside labour market dynamics and ultimately failed to support the USD.
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