The Week Ahead 10-14 August

A calendar of this week's biggest market-moving events, including key economic reports and company announcements

International news

The Bank of England (BoE) voted unanimously to keep the benchmark interest rate unchanged at a record low of 0.1% and the asset purchase programme at GBP745bn, a decision which was in line with expectation.

In the US, the number of jobs added last month was ahead of expectations, while the unemployment rate fell more than was expected. The change in non-farm payrolls was an increase of 1.783m (vs. +1.48m Bloomberg consensus). The unemployment rate for July was recorded at 10.2% (vs. 10.6% Bloomberg consensus). The change in total non-farm payrolls for June was revised lower (by 9,000 to 4.791m), while May’s payrolls were revised higher by (26,000 to 2.725m).

US president Donald Trump has given 45 days’ notice for US companies to stop dealings with Tencent’s WeChat app and Bytedance’s Tik Tok app. The executive order is placing pressure on Chinese companies as trade tensions between the two largest economies evolve and US elections near. Microsoft is currently in negotiations over the potential acquisition of Tik Tok with a 15 September deadline placed on the negotiations by the president.

Local news

It has been a relatively quiet week in terms of domestic data releases in South Africa, a summary of which is as follows:

  • New vehicle sales in South Africa fell 29.6% in July, following on from a 30.7% decline in the prior month

  • Manufacturing PMI data in South Africa showed an index reading of 51.20 in July, a further decline from the previous month’s index reading of 53.90

Date Time Currency Event Previous

11-Aug

1:00pm

ZAR

Manufacturing production and sales , June 2020

12-Aug

1:00pm

ZAR

Retail Trade Sales, June 2020

12-Aug

8:00am

GBP

Prelim GDP q/q

-2.00%

Date Time Currency Event Previous

12-Aug

2:30pm

USD

CPI m/m

0.60%

12-Aug

2:30pm

USD

Core CPI m/m

0.20%

13-Aug

11:30am

ZAR

Mining production and sales, June 2020

14-Aug

2:30pm

USD

Core Retail Sales m/m

7.30%

14-Aug

2:30pm

USD

Retail Sales m/m

7.50%

The Rand

As trade tensions between the US & China brew, emerging market currencies have been out of favour over the last week. The rand while having weakened due to news on the macro front, could also see some of the depreciation attributed to the halting of sizeable investment within the country being announced. Heineken, SAB Miller and Consol have suggested curtailing spend within the country which combined could amount to as much as R13bn. A lot of the suggested disinvestment can be attributed to the current alcohol prohibition in South Africa. Investors may be concerned that this could be the start of a broader trend by large corporates operating within the country.

Commodities

It has been a good week for commodity prices which have continued to gain.

Crude oil prices would have found favour from news of a higher than expected draw on US oil inventories held by commercial firms, as well as news that Iraq would curb output to realign production with its fellow OPEC members.

Iron ore continues to be a primary beneficiary from improving demand from China for the steelmaking ingredient, while output of the commodity remains disrupted due to the covid-19 pandemic, particularly in South America.

Gold has surged past new all time highs, evidencing that demand for safe haven assets as well as a hedge against possible inflation (amidst unprecedented amounts of stimulus) remains.

Companies

Shoprite Holdings Limited: released a FY20 operational update, guiding that total merchandise sales increased by 6.4% to around R156.90bn. Like-for-like growth for the year was 4.4%. Shoprite has announced that it will initiate a formal process to consider the potential sale of all, or a majority stake, in Retail Supermarkets Nigeria Limited.

MTN Group Limited: 1H20 results, showed EBITDA growth of 10.9% from the corresponding period of the previous year. The company also announced that it has resolved to simplify its portfolio and focus on its pan-African strategy and will therefore be exiting its Middle Eastern assets in an orderly manner over the medium term.

Liberty Holdings Limited: 1H20 results, showed a diluted loss per share of 867.70c, which compares with EPS of 681.40c in prior year’s corresponding period.

JSE Limited: 1H20 results showed diluted EPS to have increased by22.0% from the prior year’s corresponding period.

Mpact Limited: 1H20 results, showed basic EPS of 9.00c, which compares with 57.80c in the prior year’s corresponding period.

Pick n Pay Stores Limited: expects 1H20 HEPS to decline by more than 50% from the prior year’s corresponding period.

Royal Bafokeng Platinum Limited: 1H20 results showed diluted EPS to have dramatically improved to 319.30c, from a diluted loss per share of 70.80c in the prior year’s comparative period.

Cashbuild Limited: expects its EPS and HEPS for FY20 to decrease by more than 20.0% from the previous year.

Date Event Company

17-Aug

Sasol Ltd

Full year results

17-Aug

African Rainbow Minerals

Trading statement expected

19-Aug

Mondi Plc

Ex dividend

20-Aug

Mr Price

Trading statement expected

20-Aug

Standard Bank

Interim results

20-Aug

Exxaro Resources

Interim results

20-Aug

Harmony Gold

Full year results

20-Aug

Gold Fields

Interim results

21-Aug

Northam Platinum

Full year results

21-Aug

Momentum Metropolitan Holdings

Trading statement expected

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