Higher FTSE JSE Top40

23/07/2020

We are indicating a slightly higher start with the FTSE JSE Top40 future up 250 points or 0.49%, Naspers could provide some support with Tencent up 2.3% in HK. US and European Futures are also ticking higher on further stimulus news and hopes on vaccine development, with investors ignoring renewed trade tensions between the US & China.

SA Reserve Bank will probably cut the benchmark repurchase rate by 25 basis points to 3.5%, according to the median estimate of 16 economists in a Bloomberg survey. The central bank’s Monetary Policy Committee will announce its decision from 3pm.


* South Africa Secures $304 Million Virus Loan From AfDB
* Emerging-Market Rate Cuts Are Plumbing the Depths: Chart
* Ever-Lower U.S. Bond Yields Are Driving Gold’s Relentless Rally
* Afrimat Makes Offer to Unicorn Capital Partners Shareholders
* Goldman Says Capitec Stake Reflects Market Making for Clients

EARNINGS:

Vodacom Group Limited trading update for the quarter ended 30 June

* 1Q service revenue 18.76 billion rand, up 7.6% y/y
* 1Q international service revenue 5.66 billion rand, +11% y/y
* 1Q South Africa service revenue 13.38 billion rand, +6.2% y/y
* Group service revenue was up 7.6% and group revenue grew by5.6%

REINET INVESTMENTS S.C.A – Management statement for the first quarter ended 30 June 2020
*REINET INVESTMENTS 1Q NAV/SHR EUR26.11 VS EU23.89 AT END-MARCH

*REINET INVESTMENTS 1Q NAV EUR4.8B

SASOL LIMITED – Production and Sales Metrics; Covid-19 Update and Lake Charles Chemicals Project Status

*Sasol Delays Operations of Lake Charles Unit By a Month
*SASOL SAYS LDPE UNIT TO BEGIN OPERATIONS BEFORE END OF OCT.


MARKETS
Yesterday the FTSE/JSE Africa All-Share Index closed down 1% to 55,834, with Oil giant Sasol the main loser giving up over 5%. Industrials, Banks and Retailers were all mainly on the backfoot as the Rand started weakening towards the end of the session, with Gold and Platinum counters in the green. The Rand was 0.4% weaker at 16.46 per US$, with the yield on 10 year govt rand bonds that fell 11.1 bps to 9.207%.

EU/UK

European stocks closed lower yesterday as concerns over the coronavirus outweighed optimism over the European Union’s recovery fund. The pan-European Stoxx 600 ended down 0.87%, with oil and gas stocks shedding more than 2% to lead losses as all sectors except financial services slid into negative territory. In London the FTSE 100 closed down 1.0%, the German Dax gave up 0.51%, with the Paris CAC 40 shedding 1.32%. In terms of individual share price action, Norwegian media group Schibsted climbed 15% after its spin-off Adevinta bought eBay’s classifieds unit for $9.2 billion on Tuesday. At the bottom of the European blue chip index, Melrose dropped 19% after the British business transformation company posted second-quarter losses and warned of job cuts as sales plunged.

U.S.

Stocks rose last night, boosted by news of a coronavirus vaccine deal between the U.S. government and Pfizer and BioNTech and apparent progress on U.S. stimulus negotiations. The Dow gained 165.44 points, or 0.6%, to close at 27,005.84. The S&P 500 rose 0.6%, posting a four-day winning streak, and the Nasdaq Composite advanced 0.2% to 10,706.13. The S&P 500 also traded at its highest level in five months. The U.S. agreed to pay Pfizer and German-partner BioNTech $1.95 billion to produce 100 million coronavirus vaccines if it proves to be safe and effective. Pfizer rose more than 5%, with BioNTech’s U.S.-listed shares that gained 13.7%. Stocks got a boost in the final hour after sources told CNBC that Republicans are considering extending current unemployment benefits at $400 per month through December. That would be lower than the current unemployment benefits of $600 per week. Market sentiment was kept in check earlier in the session after the U.S. State Department abruptly ordered China to close its consulate in Houston. Foreign ministry spokesperson Wang Wenbin condemned the action and warned of firm countermeasures if the U.S. does not reverse its decision. The closure comes as relations between the two largest world economies have deteriorated during the coronavirus pandemic. 

ASIA
Stocks are mixed this morning amid concern over renewed Sino-U.S. tensions. Shares in China and South Korea underperformed, with equities in Hong Kong edging higher, after news of the U.S. ordering China’s Houston consulate to shut hit stocks earlier this morning.  The Hang Seng is up 0.61% (Tencent +2.1%) and the Shanghai is 0.37% lower. In OZ the ASX 200 manage to eke out 0.32%, with the metals & mining index slightly lower, down 0.10%. Japan is closed Thursday and Friday for holidays.

COMMODITIES
West Texas Intermediate crude rose 0.4% to $42.06 a barrel, with Gold slightly lower down 0.1% to $1,869.99 an ounce, but currently ticking higher again. Platinum & Palladium are both slightly higher as well.

Have a good day