The rand traded largely flat against the US dollar in a lacklustre session due to a holiday in the United States.]]> |||
Johannesburg - The rand traded largely flat against the dollar in a lacklustre Monday session due to a holiday in the United States, with weak domestic economic fundamentals likely to keep the currency under pressure.
A political crisis in neighbouring Lesotho, while not directly impacting the rand, could also send out an investor-negative signal about stability in the region, traders said.
The local unit drifted in a narrow 10.6460/6845 range during the session, and was at 10.6775 per dollar by 18:00 SA time, 0.1 percent off Friday's close in New York.
In fixed income, yields on the 2026 benchmark and the paper due next year added 1 basis point to 7.995 percent and 2 basis points to 6.62 percent respectively.
Vehicle trading data for August confirmed that Africa's most advanced economy remains in dire straits despite narrowly avoiding a recession in the second quarter, with new car sales shrinking 1.4 percent year-on-year.
“The economy is not in recession but is plodding along very slowly and that's not encouraging from an investor perspective,” Bidvest Bank chief dealer Ion de Vleeschauwer said.
The rand could weaken if the European Central Bank and the Bank of England signal policy easing and if jobs data from the US confirms a recovery is on track in the world's biggest economy.
“It looks like US fundamentals are quite strong and interest rates will inevitably go up there sooner rather than later and its going to be tough for the rand,” de Vleeschauwer said. - Reuters]]>
European markets advanced despite the conflict in Ukraine, focusing on whether the European Central Bank will announce plans for economic stimulus when it meets this week.]]> |||
London - European markets advanced despite the conflict in Ukraine, focusing on whether the European Central Bank will announce plans for economic stimulus when it meets this week.
Ukraine reported its forces were under fire from Russian tanks again on Monday, as new signs emerged that the turmoil was damaging the European economy.
Manufacturing output in the euro zone grew at its slowest pace in more than a year and factories reported falling orders as weakness showed up in most corners of the region.
“Although some growth is better than no growth at all, the braking effect of rising economic and geopolitical uncertainties on manufacturers is becoming more visible,” said Rob Dobson, senior economist at Markit.
“France remains a real concern, as does Italy's descent from solid expansion to stagnation.
Signs that growth impetus waned in the key industrial engine of Germany, and in Spain and the Netherlands, too, is also less than reassuring.”
Even so, shares on Europe's FTSEurofirst 300 index largely held their ground after markets in Asia shrugged off some disappointing data from China.
US markets were closed for the day, but gains by bonds from the euro zone periphery suggested that appetite for risk remained alive.
The euro also recovered to $1.3133 after reaching a one-year low against the dollar overnight.
Geopolitics remained front and centre. Ukrainian President Petro Poroshenko accused Russia on Monday of “direct and
undisguised aggression”, after warning over the weekend of a possible “full-scale war”.
European Union leaders were drawing up new sanctions against Moscow.
EU sources told Reuters that Europeans could be barred from buying new Russian government bonds.
Another said the EU might restrict its gas exports and limit industrial use if Russia starts to clamp down on supply or push up prices.
Moscow appeared in no mood to back away, though.
Vladimir Putin had called on Sunday for talks on the “statehood” of southern and eastern Ukraine, and as fighting continued in
Ukraine his foreign minister, Sergei Lavrov, hinted Russia would hit back if Europe imposed new sanctions.
With Russia's economy already struggling, the threat of new European action pushed dollar-traded shares in Moscow down 1 percent, the rouble to a record low and Russian borrowing costs to a five-year high.
The euro, in contrast, barely budged throughout the European day.
Core euro zone bond yields remained at record lows and the dollar index held near a 13-month high.
ENTER THE DRAGHI
Chancellor Angela Merkel acknowledged that enacting further sanctions against Russia might hurt the German economy but said doing nothing was “not an option”.
The European Central Bank meets on Thursday and is the prime event for markets seeking clarity on the euro zone's response to
a stalled recovery, disappearing inflation and the sluggish pace of reform.
Inflation in the 9.6 trillion euro economy dropped to a five-year low of 0.3 percent in August, a sign that the euro zone's cushion against Japan-style deflation is getting thinner.
Benoit Coeure, one of the ECB's top policymakers, said in an interview over the weekend that the bank is ready to adjust its monetary policy further if needed.
French Prime Minister Manuel Valls also repeated his calls for the ECB to tackle the problem of an over-valued euro.
“Pressure for the ECB to do more has returned, not only because of weak output/inflation data, but mostly following (ECB President Mario) Draghi's speech in Jackson Hole,” said Frederik Ducrozet, senior euro zone economist at Credit Agricole.
Draghi said last month the ECB was prepared to respond with all “available” tools if inflation drops further.
US markets were closed on Monday for the Labor Day holiday but it will be a busy week for markets, with central bank meetings in six of the G-10, three major emerging markets and US jobs data on Friday.
MSCI's broadest index of Asia-Pacific shares outside Japan had ended up 0.25 percent and Japan's Nikkei stock average finished 0.3 percent higher.
The gains came even after an official index of Chinese manufacturing fell from a 27-month high in August.
That was still the second-highest reading this year.
“The economy still faces considerable downside risks to growth in the second half of the year, which warrants further policy easing,” said Qu Hongbin, an economist at HSBC.
The weaker-than-expected data weighed on oil prices.
US crude slipped about 0.4 percent to $95.60 (R1,020) a barrel after marking a monthly loss in August.
Brent was off 0.4 percent at $102.81 a barrel and growth-attuned metal copper also sagged.
The dollar rose slightly against the yen to 104.17, moving back toward last week's seven-month high of 104.49.
The Bank of Japan is one of those meeting this week, and it is expected to hold fire for now despite weak economic data last
week. - Reuters]]>
South African stocks ticked higher, as Bidvest Holdings advanced after the industrial conglomerate said it could list its food unit in London, a potential windfall for investors.]]> |||
Johannesburg - South African stocks ticked higher on Monday, as Bidvest Holdings advanced after the industrial conglomerate said it could list its food unit in London, a potential windfall for investors.
But gains were limited by concerns Johannesburg stocks are overheated after a series of record highs this year and worries about lacklustre growth in Africa's most developed economy.
“We're quite fully valued across the board,” said Abri du Plessis, a portfolio manager at Gryphon Asset Management in Cape Town. “We'll probably have to steel ourselves for another year of less-than-great profits.”
The benchmark Top-40 index finished up 0.27 percent at 45,752, while the broad All-Share index added 0.3 percent to 51,113.
Both indices have repeatedly hit record levels this year.
The Top-40 is hovering at a price-to-earnings ratio of 18.3, making it the fifth-most expensive of 27 emerging stock markets indices, according to Thomson Reuters data.
Bidvest, a conglomerate that spans shipping to office furniture, said it is considering a London stock market listing for its food business.
The company has long acknowledged the need to separate that unit from the rest of the group, saying its true value has not been reflected fully reflected in Bidvest's share price.
Shares of Bidvest rose 2.5 percent to 288.34 rand, becoming the biggest percentage gainer on the Top-40 index.
Retailer The Foschini Group rose 1.6 percent to 116.90 rand.
The clothing retailer said its cash sales increased by around 20 percent in the first five months of its financial year - a sign it is cutting exposure to the troubled consumer credit market.
Retailers such as TFG have been on a push to scale back their sales on credit, as souring consumer debt in Africa's most developed economy has squeezed both banks and retailers.
Trade was slow, with just 124 million shares changing hands according to preliminary data, well below last year's daily average of 176 million shares. - Reuters]]>
Yellow maize has resumed its decline in Johannesburg to a three-year low.]]> |||
Johannesburg - Yellow maize has resumed its declines in Johannesburg to a three-year low.
Yellow maize for December delivery declined 0.4 percent to 1,785 rand a metric ton on the South African Futures Exchange in Johannesburg, the lowest settlement since July 12, 2011, after rising 0.1 percent on August 29.
Prices have been trading at or close to a three-year low since July.
Domestic production is set to be the largest since 1981, according to the government’s Crop Estimates Committee.
White maize dropped 0.6 percent to 1,744.60 rand a ton.
Wheat for delivery in December rose 0.2 percent to 3,659 rand a ton.
Wheat production is seen falling 4.8 percent to 1.78 million tons this year, the smallest since 2010, the government said on August 27. - Bloomberg News]]>
Hong Kong's benchmark index failed to hold onto midday gains, hurt by a weaker gambling sector.]]> |||
Hong Kong - Hong Kong's benchmark index failed to hold onto midday gains on Monday, hurt by a weaker gambling sector after data showed Macau casino revenue declined for the third straight month in August.
The Hang Seng Index closed barely changed at 24,752.09 points.
The China Enterprises Index of the leading offshore Chinese listings in Hong Kong also ended flat.
Macau casinos extended losses in the afternoon, with Galaxy Entertainment Group and Sands China both down about 3 percent.
Gambling revenue in the world's biggest gaming hub fell 6.1 percent in August from a year earlier, as a stepped-up campaign against corruption and falling housing prices in China cut business from high-rolling VIP customers.
Labour issues added to the operators' headaches.
On Saturday, casino dealers working for the gambling hub's SJM Holdings started industrial action for the first time in the Chinese territory as discontent over salaries and benefits spreads.
Shares of SJM lost 2.2 percent. - Reuters]]>
The rand steadied near the weaker end of a recent range against the dollar, opening the week on the backfoot as investors worried about Ukraine/Russia tensions and weakness in the local economy.]]> |||
Johannesburg - South Africa's rand steadied near the weaker end of a recent range against the dollar on Monday, opening the week on the backfoot as investors worried about Ukraine/Russia tensions and weakness in the local economy.
The rand was at 10.6715 against the dollar at 08:22 SA time, slightly weaker than its close of 10.6670 in New York on Friday.
With US markets closed for a holiday on Monday, the rand was expected to trade within last week's range unless the crisis in Ukraine escalated further, which would likely encourage rand bears.
US lawmakers on Sunday urged Washington to arm the Ukrainian government, saying it needed help to repel what they called Russia's invasion of the country, while Russian President Vladimir Putin called for immediate talks on the “statehood” of southern and eastern Ukraine.
The rand was also dogged by worse-than-expected trade data on Friday, which highlighted the South African economy's external vulnerabilities.
Government bonds traded weaker on Monday, with yields up 3 basis points at 8.015 percent on the benchmark 2026 issue and at 6.64 percent on the 2015 note.
Locally investors will watch for the release of vehicle sales data for August later in the session, numbers that are likely to confirm that South African consumers are struggling with high interest rates and inflation along with joblessness and piles of debt.
Mid-week sees the release of the business confidence index and a survey of business conditions from purchasing managers in Africa's most advanced economy.
The week ends with the central bank releasing reserves data.
In overseas markets, the European Central Bank holds a monetary policy meeting on Thursday. - Reuters]]>
Oil prices were mixed in muted Asian trade on Monday ahead of a public holiday in the United States.]]> |||
Tokyo - Oil prices were mixed in muted Asian trade on Monday ahead of a public holiday in the United States and as dealers digest downcast Chinese manufacturing data, analysts said.
The US benchmark, West Texas Intermediate for October delivery, eased 18 cents to $95.78 while Brent crude for October rose seven cents to $103.26 in mid-morning trade.
Floor trading in the United States is closed on Monday for the Labour Day holiday, and electronic transactions will be used to determine the settlement price.
“We are seeing thin trading volumes in Asian trading today ahead of the US Labour Day holiday,” Desmond Chua, market analyst at CMC Markets in Singapore, told AFP.
“Oil prices are expected to trade within a lower range as dealers consolidate their positions with no new leads expected today,” he said.
Investors are also scrutinising data released on Monday showing Chinese manufacturing growth slowed in August, raising concerns about demand in the world's top energy consumer, Chua said.
The National Bureau of Statistics said the official purchasing managers index came in at 51.1, down from 51.7 in July, and the first decline since slipping to 50.2 in February.
The index tracks manufacturing activity in China's factories and workshops and is a closely watched indicator of the health of the economy. A reading above 50 indicates growth, while anything below points to contraction.
Elsewhere, the Ukrainian crisis is continuing to provide support to oil prices, with little sign of an imminent solution.
Russian President Vladimir Putin on Sunday raised the stakes in the standoff by calling for the first time for statehood to be discussed for the eastern regions of Ukraine now controlled by pro-Kremlin rebels.
The West is threatening fresh sanctions against Russia, the world's number-two oil producer, for directly aiding the insurgency.
Putin has repeatedly denied Russia is fuelling the conflict or putting any troops on the ground in the former Soviet state, a key conduit for Moscow's gas exports to Europe. - AFP]]>
Tokyo stocks rose 0.28 percent on Monday morning after another record close on Wall Street last week.]]> |||
Singapore - Tokyo stocks rose 0.28 percent on Monday morning following another record close on Wall Street, while a weaker yen boosted exporters.
The benchmark Nikkei 225 index added 43.65 points to 15,468.24 by the break, while the Topix index of all first-section shares climbed 0.29 percent, or 3.75 points, to 1,281.72.
The modest gains follow two losing sessions for the Nikkei.
US markets provided the positive cue, despite worries about tensions between Russia and Ukraine.
The S&P 500 - which ended above 2,000 for the first time last week - rose 0.33 percent, the Dow added 0.11 percent and the Nasdaq put on 0.50 percent to end at its highest level in 14 years on Friday
Friday's upbeat US lead filtered through to currency trading, with the dollar ending last week at 104.06 yen - near a seven-month high.
In Asian business on Monday the dollar bought 104.16 yen.
However, Investrust chief executive Hiroyuki Fukunaga told Dow Jones Newswires: “Small-capital stocks continue to be in favour, but... it's not enough to keep the broader indexes moving forward.
“The Nikkei consistently retreats when it hits the mid-15,000 level.”
Nidec shares rose 1.88 percent to 6,758.0 yen on a report in the leading Nikkei business daily that said the electric motor maker would invest more than 100 billion yen in India over the next seven or eight years.
Retailer Ryohin Keikaku, better known as Muji, rose 1.28 percent to 11,830.0 yen on a separate report that said it may set up shops in India as early as next year.
The stories came as visiting Indian Prime Minister Narendra Modi embarks on an official visit to Japan, where he will meet counterpart Shinzo Abe. - AFP]]>
South Africa's rand weakened against the dollar, pressured by a bigger-than-expected domestic trade gap.]]> |||
Johannesburg - South Africa's rand weakened against the dollar on Friday, pressured by a bigger-than-expected domestic trade gap and a low appetite for risky assets as investors worry about Ukraine-Russia tensions.
The revenue service issued trade figures which showed South Africa's trade account in a nearly 7 billion rand shortfall in July as imports outpaced the pace of exports even as the rand has remained weak.
“There is still no evidence in the trade figures that rand weakness has assisted in boosting export demand overall. Rand weakness as a stimulant for economic growth is misleading advice,” said Investec economist Annabel Bishop.
South African manufacturers have previously complained about a strong rand exchange rate but analysts say export numbers are not reacting satisfactorily to the depreciated currency.
Instead, the weak rand has fanned inflation and resulted in higher borrowing costs.
At 18:10 SA time, the rand traded at 10.6525 to the dollar, down 0.3 percent on its previous close in New York on Thursday.
The unit was coming back from a session low of 10.6665.
The rand is likely to find support around the 10.68 area, its previous low.
Market expectations that inflationary pressures are going to keep the central bank hiking rates this year are expected to keep the rand cushioned.
Government bonds traded in ranges in the session and ended the session at 7.985 percent on the benchmark 2026 issue and at 6.61 percent on the bond due next year.
Next week investors will contend with vehicle sales data on Monday, a number that is expected to add to a view that South African consumers are under pressure, battling high interest rates and job insecurity. - Reuters]]>
European shares were poised to end a positive August on a softer note after euro zone inflation data slightly cooled market speculation about fresh monetary stimulus by the European Central bank.]]> |||
London - European shares were poised to end a positive August on a softer note on Friday after euro zone inflation data slightly cooled market speculation about fresh monetary stimulus by the European Central bank.
Euro zone inflation dropped as expected to a fresh five year low in August, data showed on Friday, but it was not likely to force the ECB into immediate policy intervention next week.
Dovish comments by ECB's President Mario Draghi last week had fuelled market bets that the central bank was preparing to pump more into the system, possibly via purchases of government or corporate bonds, a measure known as quantitative easing (QE).
“I think what people realise is that for the ECB to engage in public-sector QE...the ECB has to see the whites of the eyes of deflation,” Wouter Sturkenboom, investment strategist at Russell Investments, said.
“As the numbers come through, those condition are not being met so...they have to reassess their case.”
Sturkenboom still expected the ECB to be ready to act if needed but argued the central bank would first wait to see the impact of its new long-term loan programme, which is due to start in September and aims to give banks an incentive to lend more to the real economy.
At 15:53 SA time, the FTSEurofirst 300 index of top European shares was down 0.1 percent at 1,367.93 points, having traded as high as 1,376.58 points earlier.
The euro zone blue-chip Euro STOXX 50 was down 0.2 percent.
The indexes turned negative after a subdued start for shares in the United States, where data showed US consumer spending unexpectedly fell in July and savings rose to their highest level in more than 1-1/2 years, indicating that households remain cautious despite an acceleration in economic growth. ,
Both the FTSEurofirst and the Euro STOXX 50 were still on track for their first monthly gain since May thanks to a bounce over the past two weeks.
Speculation about the ECB's next move had temporarily diverted the market's focus from events in eastern Ukraine, where a total of 2,593 people have been killed in fighting since it erupted in mid-April, according to a senior UN human rights official.
Yet the Ukrainian crisis remained a major headwind for European equities.
Ukraine's president said on Thursday Russian troops had entered his country in support of pro-Moscow rebels who captured a key coastal town.
US President Barack Obama spoke by phone on Thursday with German Chancellor Angela Merkel.
The White House said the two agreed the United States and Europe should consider more sanctions against Moscow.
Shares in Britain's biggest retailer Tesco dropped 6.6 percent after it cut its profit forecast for the third time in three years and slashed its interim dividend by 75 percent.
The warning hit the shares of other UK supermarket chains, with Sainsbury down 4.3 percent and Morrisons down 4.9 percent.
Shares in European airlines fell after a small eruption occurred north of Iceland's Bardarbunga volcano, which prompted the Icelandic Met to raise the warning code for aviation to red, the highest level. In 2010, an ash cloud from Iceland's Eyjafjallajokull volcano closed much of Europe's airspace for six days.
Shares in Air France were down 2.5 percent, with easyJet down 1.8 percent. - Reuters]]>