Daily Market Overview 19 October 2021

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Local Market Update

– The JSE All Share was trading 0.35% lower yesterday and the Bluechip Top 40 Index closed 0.45% weaker. The commodity sector was the biggest drag on the day, down 1.12%. Meanwhile, general retail stocks gained 3.87%. Leading the Top 40 index were Nedbank and Sanlam, up 2.32% and 2.12% respectively. There is little data on the schedule in South Africa this week, with the September consumer price index likely to attract the most attention on Wednesday.

– The rand slipped on Monday as weak economic data from China, its biggest trading partner, prompted investors to sell riskier assets. China’s economic growth slowed the most in a year in the third quarter, due to power shortages, supply chain bottlenecks and significant turmoil in the property market. At the close of trading, the rand was trading around R14.69 to the dollar, down 0.94%.

– Gold prices rose slightly this morning as a fall in the dollar and US bond yields offered some support to the precious metal. Oil prices fell early this morning, with Brent down for a second straight day after Chinese data showed a slowdown in economic growth and U.S. factory output fell in September, raising fresh concerns about demand amid the patchy recovery from the coronavirus pandemic.

In Local news

Calgro M3 share price shoots to 15-month high
Shares in JSE-listed Calgro M3 surged 10.29% to a 15-month high on Monday after the developer of residential and memorial parks reported a strong improvement in its financial results for the six months to August 2021. Calgro on Monday reported a 45,6% increase in revenue to R576,2 million in the six months to August this year, compared with R395,8 million in the previous period. Operating profit increased to R81,67 million from an operating loss of R27,19 million in the previous period as gross profit margin improved to 19,7% from 7,9%. Cash inflow from operating activities improved to R133,2 million from R115,7 million. No dividend was paid.

Renergen signs 19-year contract to create first helium spot market
Domestic natural gas and helium producer Renergen has entered into a forward deal worth $25 million (about R367 million) with US-based Argonon Helium to bring price transparency to the currently confusing helium market. In a Sens statement issued by Renergen on Monday, the company announced that part of the funds from the pre-sale agreement – which gives Argonon access to 100 000 helium units over a 19-year period – will be used to accelerate Phase 2 of the Virginia Gas Project.

International Market Update

– European stock markets closed lower on Monday as investors reacted to slowing economic growth in China and rising oil prices added to inflation concerns. The pan-European Stoxx 600 provisionally ended 0.5% lower, with auto stocks leading the losses with a 1.9% drop. All sectors and major bourses closed in negative territory.

– U.S. stocks rebounded Monday after opening lower as investors bet on a continuation of strong earnings reports from major companies. Tesla and Netflix advanced ahead of third-quarter reports due this week. Strong first-week earnings results, including from the biggest banks, have put the major stock markets within striking distance of their all-time highs. The Dow is nearly 1% off its record high, while the S&P 500 and Nasdaq Composite are 1.3% and about 2.5% below their records, respectively.

– Asia-Pacific stocks advanced in early trade, with tech stocks in the region jumping after their Wall Street counterparts posted similar gains overnight. Minutes from the Reserve Bank of Australia’s October monetary policy meeting show the RBA expects the Australian economy to “return to growth in the December quarter and return to the pre-Delta path in the second half of 2022”.

In International news

Apple unveils new computer crisps amid shortages
Apple has unveiled its M1Pro and M1Max crisps, which are used in the new MacBook Pro laptops. Apple says the M1 Max chip is the most powerful the company has ever built, with 57 billion transistors. The new crisps were announced nearly a year after the company unveiled its first Mac computers powered by silicon it developed in-house. The announcement came after it was reported that Apple had cut its production targets for the iPhone 13 in light of the global shortage of computer crisps. Apple claims the new crisps will achieve comparable performance to its latest 8-core laptop chip PC, which runs at top speed while consuming 70% of the power. At full power, the chip would be up to 1.7 times faster than the 8-core chip PC, according to the company. Apple unveils new computer crisps amid a shortage

North Korea fires submarine ballistic missile into waters off Japan
North Korea has fired a submarine-launched ballistic missile into waters off the coast of Japan, according to South Korea’s military. The launch came weeks after South Korea unveiled its own such weapon. Pyongyang had unveiled the “new” type of submarine-launched missile in January, calling it “the most powerful weapon in the world.” At this time, intelligence chiefs from South Korea, Japan and the U.S. are reportedly meeting in Seoul to discuss North Korea. In recent weeks, Pyongyang has conducted a series of tests of alleged hypersonic missiles, long-range cruise missiles and anti-aircraft weapons. Some of these tests violate strict international sanctions.