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Markets WRAP: Rand closes at R14.44/$

2019-05-09 08:28

Analysts said earlier that the rand was likely facing some volatility as election results started to trickle in.

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Last Updated at 21:00
09 May 17:13

The rand closed at R14.44 to the greenback on Thursday afternoon.

The day's range was between R14.30 to R14.46.

Analysts said earlier that the rand was likely facing some volatility as election results started to trickle in. The rand was also likely to feel the impact as the trade war between the US and China intensified.


09 May 14:58

South African stocks extended losses into the afternoon on Thursday, as emerging markets continued to suffer from US/China trade war concerns.   

By 14:40 the JSE All Share was down 1.72% at 57 043.60 points, while the JSE Top 40 was down 1.73% at 50 810.14.


09 May 12:51

Panasonic, the Japanese company that makes the batteries that power Tesla’s electric vehicles, predicted falling annual earnings on restructuring expenses and higher costs at its automotive business and other units. The Japanese company said Thursday that full-year sales, operating income and net income will all decline. The company also cited falling sales at its industrial solutions business in China.

Last month, Tesla Chief Executive Officer Elon Musk tweeted that Panasonic was operating at a pace that’s constrained production of Tesla’s Model 3 sedan. On Thursday, CEO Kazuhiro Tsuga said Panasonic’s aim this year is to ramp up output before considering more investment.

“Batteries will run out if Tesla starts to sell the Model Y and expands its business next year,” he told reporters. “What will we do then? It’s one of a few topics to discuss with Tesla, including battery (production) in China.”

Tesla and Panasonic have been joined at the hip since the gigafactory agreement was first announced in July 2014, even if on paper they’re a bit of an odd couple. One is a 16-year-old maker of electric vehicles run by an impetuous boss, the other a century-old conservative Japanese manufacturer. Shares of Panasonic were little changed in Tokyo before the company reported earnings. The stock has lost about 1% this year, giving the company a market value of about $22 billion. - Bloomberg


09 May 12:14

OVERVIEW: Stocks dropped globally and US equity futures retreated on Thursday as the deadline approached for America and China to raise reciprocal tariffs. The yen climbed with gold and Treasuries as investors sought havens, while the yuan fell to its weakest since January.

Automakers and miners led declines on the Stoxx Europe 600, which followed Asian markets lower after President Donald Trump ratcheted up his hard-line rhetoric. In comments to supporters at a rally, he said China “broke the deal” and would pay, though he added that “it will all work out”.

Beijing has warned it will retaliate should the US hike tariffs as advertised on Friday. Asia’s benchmark equity gauge headed for its largest decline in six weeks. Treasury 10-year notes jumped, hours after Wednesday’s auction saw the weakest demand for the benchmark bond in a decade. Investors are focusing on the world’s biggest economies as another phase of bilateral talks approaches. China’s top trade negotiator, Liu He, is scheduled to be in the US on Thursday and Friday. Discussions will resume hours after concerns flared again about the strength of the Chinese economy - the country’s credit growth slowed in April to a level below all 27 estimates in a Bloomberg survey.

Meanwhile, simmering geopolitical tension elsewhere - from North Korea firing at least one projectile on Thursday to renewed stress between America and Iran - added to the gloomy mood. Crude oil edged lower and emerging-markets stocks tumbled. Developing-nation currencies weakened, with the Turkish lira leading declines.

These are the main moves in markets:

Stocks

Futures on the S&P 500 Index fell 0.8% as of 10:48 London time. The Stoxx Europe 600 Index dropped 0.8%. The Shanghai Composite Index slid 1.5%. The MSCI Asia Pacific Index declined 1.4% on the biggest drop in more than six weeks.

The MSCI Emerging Market Index fell 1.8%. 

Currencies

The Bloomberg Dollar Spot Index advanced 0.1% on the biggest gain in a week. The Japanese yen strengthened 0.3%. The offshore yuan weakened 0.5%. The MSCI Emerging Markets Currency Index dipped 0.5% to the lowest in four months. 

Bonds

The yield on 10-year Treasuries fell four basis points to 2.45%. Germany’s 10-year yield declined two basis points to -0.06%. Australia’s 10-year yield dropped two basis points to 1.7145%. 

Commodities

Gold rose 0.3% to $1,284.15 an ounce. West Texas Intermediate crude futures declined 0.5%. - Bloomberg


09 May 11:42

Sappi's shares fell to a three-year low after the South African pulp and paper maker warned that full-year profit will be below that of last year, citing weakness in its main graphic-paper markets.

Demand for certain types of paper products was down between 8% and 13% in Europe and North America, forcing the Johannesburg-based company to cut production, according to a Thursday statement.

“Graphic paper markets remain weak, and despite expected closures or conversions by competitors, it may take the remainder of the calendar year before sufficient capacity is removed to allow operating rates and margins to recover,” Chief Executive Officer Steve Binnie told reporters by phone. The shares slumped 10% to R60.16 as of 10:58 in Johannesburg, the lowest since May 2016.

The company reported second-quarter profit of $72 million, compared with $102 million last year. Net debt rose to $1.7 billion. In the next fiscal year a combination of cost cutting, recovering markets and higher dissolving pulp volumes will boost profitability, Binnie said. - Bloomberg


09 May 10:17

The rand is expected to face some volatility today, say analysts.

"Voting day has come and gone and the rand's trading pattern remains intact: a stronger rand was witnessed in overnight trade and during non-trading days in SA, with the unit reaching a high of R14.30/$ yesterday. We expect some volatility in the rand as the election results become known, with an intraday range of R14.30 to R14.48," said Peregrine Treasury Solutions's Bianca Botes in a morning note to clients. 


09 May 08:35

All eyes on Steinhoff as shares resume JSE trade after public holiday

Shares in Steinhoff will resume trading on the JSE on Thursday after the Stellenbosch-headquartered retail conglomerate published its long-delayed 2017 earnings late on Tuesday.The group's shares were last quoted at R2.01 a share at close of trade on Tuesday.

The local bourse was shut on Wednesday for elections.


09 May 08:28

Asian stocks drop as tariffs loom

Adam Haigh, Bloomberg

Stocks fell in Asia alongside US and European equity futures as the clock ran down for an escalation in tariffs between the world’s two largest economies.

The yen rose alongside Treasuries, while the yuan dropped to its weakest since January. President Donald Trump kept up the hard-line rhetoric, saying China “broke the deal” and would pay, though added that “it will all work out” in comments to supporters at a rally.

China has warned that it will retaliate should the US hike tariffs as advertised on Friday. After opening to losses, Asian stocks and S&P 500 Index futures hit their lows of the session after China reported weaker-than-forecast lending data for April.

Equity benchmarks in Tokyo and Hong Kong slid more than 1%, and Seoul’s Kospi tumbled more than 2.5 percent. Crude oil also fell.

Emerging market currencies tumbled, with the Korean won leading losses on Thursday.

As it has been since Trump’s tariff-warning tweet on Sunday, trade is set to continue to be the focus as key bilateral talks approach.

China’s top trade negotiator, Liu He, is scheduled to be in the US on Thursday and Friday.

They will start after data renewed concerns about how strong China’s economic stabilization is.

Aggregate financing for April came in below all 27 estimates in a Bloomberg survey.

“Volatility in the markets is really headline driven, particularly around the fluid conversations between the US and China,” said Charlie Ripley, a senior investment strategist at Allianz Investment Management.

“We’ll have to see how this thing plays out at the end of the week here, but we would continue to expect this environment as long as the headlines are going back-and-forth.”


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