30 November - 4 December 2015
A look at local and international economic data, major events, economic releases and company news expected in the week to come.
By Shaun Murison, Market Analyst
Anglo American Plc is at the forefront of the resource decline as investors ponder what the company’s plan is to try stemming the pain of a pressured commodity environment and the toll on its balance sheet. The future of the company’s dividend is in focus as is whether there will be a need for Anglos to recapitalise. The group was also downgraded in the week by equity researchers at HSBC from a “hold” rating to a “reduce rating”.
In addition to depressed commodity prices (iron ore and oil in particular) and possible ratings downgrades looming for BHP Billiton, the recent dam collapse in Brazil has further taken its toll on the company’s share price. The UN has suggested that current efforts to contain mine waste from the accident have been insufficient adding to the negative sentiment around the company.
Netcare results released in the week saw the company’s share price met with an unfavourable reaction as growth realised fell short of expectation. Some of the salient features in the full year results are as follows:
Investors also expressed disappointment with MMI Holdings’ three month trading update which provided the following operational review:
Financial counters are once again at the forefront of the gainers list led by Investec which continues to gain following the previous weeks release of the group’s interim results (covered in last weeks newsletter).
|30-Nov||Steinhoff International Holdings N.V||New listing on JSE||n/a|
|30-Nov||Adcorp Holdings Ltd||Ex-Dividend||R0.6|
|30-Nov||Ascendis Health Ltd||Ex-Dividend||R0.11|
|30-Nov||Coronation Fund Managers Ltd||Ex-Dividend||R2.70|
|30-Nov||Famous Brands Ltd||Ex-Dividend||R1.90|
|30-Nov||Illovo Sugar Ltd||Interim 2016 results||n/a|
|30-Nov||Invicta Holdings Ltd||Ex-Dividend||R0.67|
|30-Nov||Mediclinic International Ltd||Ex-Dividend||R0.36|
|30-Nov||Spar Group Ltd||Ex-Dividend||R3.93|
|30-Nov||Vodacom Group Ltd||Ex-Dividend||R3.95|
|02-Dec||Sanlam Ltd||FYI 2015 results||n/a|
Source: Economic Calendar, as of 27/11/2015
Gross Domestic Product (GDP) estimates for the 3rd quarter 2015 (as reported by Statssa) showed our local economy to have narrowly missed moving into a technical recession as marginal q/q growth was reported.
The seasonally adjusted real GDP at market prices increased by an annualised rate of 0.7 per cent compared with a decrease of 1.3 per cent during the second quarter of 2015.
The main contributors to the increase in economic activity for the third quarter of 2015 were the manufacturing industry (contributing 0.8 of a percentage point), finance, real estate and business services (contributing 0.6 of a percentage point) and the wholesale, retail and motor trade; catering and accommodation industry (contributing 0,3 of a percentage point).
Negative contributions were recorded by the mining and quarrying industry (contributing -0.8 of a percentage point) and the agriculture, forestry and fishing industry (contributing -0.3 of a percentage point).
The annual percentage change in the PPI for final manufactured goods was 4.2% in October 2015. From September 2015 to October 2015 the PPI for final manufactured goods increased by 0.9%.
U.S. markets experienced a three-day trading week in lieu of Thanks Giving holiday celebrations. Preliminary GDP data, revised from the Advance GDP data released last month, estimated economic growth to be at 2.1% q/q annualized.
In Europe, French and German Flash manufacturing PMI data both came in ahead of expectations, alluding to marginal industry growth. U.K. second estimate GDP data was in line with consensus estimates alluding to 0.5% q/q growth.
The week ahead
While markets will be cognate of Federal Chairperson, Janet Yellen’s three public addresses scheduled for the new week, the primary focus will be on U.S. employment data set for release on Friday. The Non-Farm employment change and unemployment rate data will be the last of its sort, before the next Federal Funds Rate announcement in mid-December 2015. Markets are pricing in the first interest rate hike since 2006 as the U.S. economy starts to show signs of improvement, particularly within the labour market.
|30-Nov||08:00||SA||M3 money supply y/y||8.4%|
|01-Dec||03:45||CNY||Caixin manufacturing PMI||48.3|
|01-Dec||17:00||USD||ISM manufacturing PMI||50.1|
|02-Dec||15:15||USD||ADP non-farm employment change||182K|
|02-Dec||15:30||USD||Fed Chair Yellen speaks||n/a|
|03-Dec||14:45||EUR||Minimum bid rate||0.05%|
|03-Dec||15:30||EUR||ECB press conference||n/a|
|03-Dec||17:00||USD||ISM non-manufacturing PMI||59.1|
|03-Dec||09:15||SA||Whole economy PMI HSBC||47.5|
|04-Dec||15:30||USD||Average hourly earnings m/m||0.40%|
|04-Dec||15:30||USD||Non-farm employment change||271K|
Source: Economic Calendar, as of 27/11/2015
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Source: iNet BFA, as of 27/11/2015