Market Overview

The following is a partial recap of the market analysis shared during today’s morning Discord call.

Today’s market seems to have taken on a risk-off sentiment, as low volumes were the name of the game yesterday, both here and in the U.S. We also heard news of two oil tankers being attacked in the Middle East. This is likely to have helped put a damper on the market, particularly in the metals space, though the effect has been relatively minor, with oil barely in the green.

Looking ahead to the rest of the day, we expect a quiet session, and with no noteworthy economic data and only a few big earnings on the horizon, we believe that, barring dramatic news, this week is a good opportunity to get your admin work done.

Tencent (700)

Tencent is up roughly by another 2%, from yesterday’s more dramatic 4.5%. This shows a rotation back into Hong Kong again, but Tencent’s action hasn’t been great, as it touched HK$480 before dropping down to HK$460, which creates a bearish candle. In practical terms, this is likely to give Naspers (NPN) and Prosus (PRX) a 1% boost at the start. But that doesn’t guarantee continuous buys. We could see a repeat of yesterday, with a green start that fizzles out after 2-3 hours, so keep a close eye on it if you intend to trade any of those stocks.

Gold

$4,200 remains the level to look out for, as gold was able to touch, but not break, it, yesterday. We currently see gold as something of a no-man’s land; the graphs look like a bull flag, but the dollar remains very strong, which makes it very plausible for gold to re-test the $4,100s again.

Left: gold, right: U.S. Dollar Index (DXY)

Local Stocks

Absa Group (ABG)

Absa was downgraded by two different firms today. Goldman Sachs cut it down to neutral, with a target price of R240. Avior in the meantime set it to underperform, with the target price of R228.15.

Investec (INL)

Investec was upgraded to outperform by Avior today, with R167.50 as the new target price. It’s a dramatic 21% increase, and subsequently, we recommend putting it on your watchlist.

FirstRand (FSR)

Firstrand had a very day yesterday and closed at the highs. We could see the rotation in the banking space continue today, in which case FirstRand would see even more gains today.

Ex-Dividends & Economic Data

Ex-Dividends

The following stocks are set to go Ex-div tomorrow: British American Tobacco (BTI), Netcare (NTC) Sirius Real Estate (SRE), Stor-Age Property REIT (SSS), and Vukile Property Fund (VKE).

Economic Data

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