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2013-02-15
Market Review


South African Amarkets Review

South African markets ended in the red on Thursday, following downbeat South
African mining production data. Additionally, data indicating contraction in
European economies weighed on market sentiment. A sharp decline in its 1H13
headline earnings led Impala Platinum Holdings to drop 3.1%. Woolworths
Holdings lost 2.6%, despite reporting a rise in its 1H13 revenue and earnings.
Gold Fields fell 1.9%, after the company reported a decline in its earnings for
FY12. On the other hand, Harmony Gold Mining added 0.9%, after the company
announced that it would re-open its Kusasalethu mine on 15 February 2013 and
that the mine is expected to return to full production towards the end of June
2013. The JSE All Share Index fell 0.2% to close at 40,732.86.

 

UK Markets Review

UK markets closed in the red yesterday, as weak Gross Domestic Product
(GDP) data from Euro-area and Japan weighed on market sentiment. AMEC
shed 7.3%, after it stated that its order book would remain stagnant and warned
of modest profit for FY13. Capita dropped 1.3%, after it acquired Northgate
Managed Services for GBP65.00mn. Miners, Kazakhmys and Antofagasta
slipped 2.0% and 0.5%, respectively. Bucking the trend, Rolls-Royce Holdings
advanced 3.3%, after its underlying pre-tax profit for FY12 increased to
GBP1.4bn. Aberdeen Asset Management gained 2.5%, after it bought Artio
Global Investors for $175.00mn. The FTSE 100 Index slipped 0.5% to close at
6,327.36.

Asia Market Review

Asian markets are trading mostly lower this morning, amid concerns about a
global economic slowdown following dismal GDP data from European nations. In
Japan, Casio Computer and Panasonic declined 2.7% and 2.0%, respectively,
as the Japanese yen traded higher against the US dollar. In Hong Kong, Cosco
Pacific and Esprit Holdings declined 1.6% and 1.4%, respectively, as investors
speculated that a slowdown in global economy might hurt their earnings
prospects. In Seoul, Ssangyong Motor rallied 3.7%, after the company stated
that its top shareholder, Mahindra & Mahindra, would participate in its new share
issue worth $74.00mn. The Nikkei 225 Index is trading 0.9% lower at 11,207.93,
while the Kospi Index is trading 0.1% higher at 1,981.34. The Hang Seng Index
has eased marginally to trade at 23,400.61.
Nikkei 225 - Last Month
 

US Markets Review

US markets ended mostly firmer yesterday, as upbeat US jobless claims data
and a bout of merger activity in the US outweighed dismal economic reports in
Europe. Constellation Brands soared 37.2%, after it won full control of the
Corona beer brand in the US. Artio Global Investors surged 33.7%, as it
confirmed that it would be acquired by Aberdeen Asset Management. H.J. Heinz
rallied 19.9%, after Berkshire Hathaway and 3G Capital agreed to acquire the
company for about $28.00bn. Upbeat 4Q12 results and a hike in its dividend
payout led PepsiCo 1.1% higher. The S&P 500 Index added 0.1% to settle at
1,521.38, while the DJIA Index eased 0.1% to close at 13,973.39. The NASDAQ
Composite Index rose 0.1% to finish at 3,198.66.

Commodities

  • At 06:00 SAST today, Brent crude oil fell 0.1% to trade at $119.15/bl.

Reports suggested that the Organization of Petroleum Exporting Countries
would cut crude oil shipments this month. Yesterday, Brent crude oil fell
0.1% to settle at $119.26/bl, amid concerns about the demand for crude oil,
following worse-than-expected eurozone, French and German 4Q12 GDP
data. Meanwhile, Iran and the United Nations failed to agree on a date to
allow inspectors to observe the Iranian nuclear facilities, raising speculation
of further sanctions to be imposed on the nation.

  • Yesterday, corn spot prices remained unchanged at $7.06/

bushel. According to media reports, crop-friendly weather has improved
prospects for harvests in Brazil and Argentina.

  •  At 06:00 SAST today, gold prices declined 0.1% to trade at $1,633.55/oz,

as the US dollar strengthened against its major counterparts. Yesterday,
gold declined 0.5% to close at $1,634.75/oz.

  • Yesterday, copper rose 0.2% to close at $8,205.25/mt. Aluminium closed

0.7% higher at $2,115.25/mt.

Econimic Updates

- On an annual basis, South Africa’s total mining production dropped more-than-expected by 7.5% annually in December, compared to a revised 3.8% decline recorded in November. Additionally, gold production declined 21.2% annually in December, compared to a revised 32.0% drop reported in the previous month.
- The Council of Mortgage Lenders reported that, on an annual basis, the gross value of buy-to-let mortgage loans in the UK increased 19.0% to GBP16.40bn in 2012, from GBP13.80bn in the prior year.
- On a seasonally and calendar-adjusted quarterly basis, GDP in Germany edged down 0.6% in 4Q12, compared to a 0.2% rise recorded in the previous quarter. On an annual basis, GDP increased 0.1% in 4Q12, following a 0.4% growth recorded in 3Q12.
- On a quarterly basis, French GDP dropped 0.3% in 4Q12, compared to a 0.1% rise recorded in the previous quarter. On an annual basis, GDP fell 0.3% in 4Q12, compared to unchanged in 3Q FY2012.
- On a seasonally adjusted quarterly basis, eurozone GDP contracted 0.6% in 4Q12, compared to a 0.1% decline in the previous quarter. On a seasonally adjusted annual basis, GDP fell 0.9% in 4Q12, compared to a 0.6% decline recorded in the prior quarter.
- The European Central Bank, in its latest survey, has indicated that eurozone economic activity is expected to be flat in 2013, down from a previous prediction of 0.3% growth, made three months ago. The main factor behind the downward revision for 2013 is the weaker than expected development in economic activity in 4Q12. However growth in the single bloc is subsequently expected to rise to 1.1% in 2014, down from a previous forecast of 1.3%, before accelerating to 1.6% in 2015.
- For the week ended 9 February 2013, initial jobless claims in the US fell to 341,000, compared to the previous week's revised figure of 368,000.
- James Bullard, the President of the Federal Reserve Bank of St. Louis, has indicated that the current monetary stimulus of outright open-ended bond purchases and the recent switch to conditional guidance has made monetary policy more effective. However, he voiced his concerns that while inflation has remained low, the growing balance sheet might make it difficult for the Fed to tighten the policy at a future date when the job market sees improvement.
- The US Senate Democrats have proposed a $110.00bn tax increase and spending cut plan that would postpone $1.20trn of automatic spending cuts set to begin from 1 March 2013 by ten months.
- Japanese ruling party lawmaker, Kozo Yamamoto stated that a race to devalue currencies would spark global growth, dismissing German criticism of Prime Minister Shinzo Abe’s plans for monetary easing which have weakened the Japanese yen.

Thank You Anchor Capital


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