Netflix cheered markets on Wednesday morning, rising 11% to $384.10 in Nasdaq’s after-hours trading after closing 4% higher on Tuesday.
The online movie service reporting it added 7-million subscribers in the September quarter helped the Nasdaq composite index rise 2.89%; Asian markets took their cue from the US rally.
Tokyo’s Topix index was up 1.43%, Singapore’s Straits Times index added 1.71% and Sydney’s ASX 200 index rose 1.16%.
BHP, however, was down 1.06% to A$33.54 and Tencent was down 0.5% to HK$281.40.
Following Pick n Pay’s results on Tuesday, the JSE’s focus remains on the retail sector on Wednesday, with interim results from pharmacy chain Dis-Chem and August’s retail figures from StatsSA at 1pm.
Dis-Chem has not issued a trading statement, as would be required if its earnings differed by more than 20% from the comparative period, but it did issue a sales update for the first four months of its financial year in July.
“The continuing increase in the fuel price along with the one percentage point increase in the VAT rate continues to put pressure on consumers, which was evident in our April and May retail sales,” CEO Ivan Saltzman said in the sales update.
Dis-Chem said it expected interim earnings per share (EPS) for the six months to end-August to be between 8.1% and 13% higher than in the first half of its previous financial year.
The group said earnings growth was expected to improve in the second half of its financial year as it benefited from the government set prices of medicines increasing.
Investec Bank economist Lara Hodes forecasts annual retail sales growth in August slowed to about 0.5% from July’s 1.3%.
Hodes said this was is in line with the Bureau of Economic Research’s third-quarter retail survey, which suggested that business conditions in the retail sector remained constrained.
“Specifically, muted sentiment levels, coupled with higher consumer and personal income taxes, lacklustre household credit extension and mounting fuel price pressure, continue to weigh on disposable income,” Hodes said.
SA’s struggling retail sector contributed to the country’s GDP shrinking in the first half of 2018.
“The retail sales update for August will provide further indication of whether the weak momentum, experienced in the second quarter has filtered through into the third quarter of the year,” Hodes said.
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