The Week Ahead

24-28 June

International news

While the US Federal Reserve did not cut lending rates at the MPC meeting, there is now a more obvious suggestion of further monetary accomodation in future, through the lowering of lending rates. The Fed commentary now ommits the use of the word ‘patient’, an indication that the bias for future lending rates in the world’s largest economy is towards easing rather than being maintained. The dovish commentary has seen the dollar underperforming a broad basket of currencies which has helped lift comodity prices and equity markets.

Markets would have also found solace in news that US president Donald Trump and Chinese Premier Xi Jinping will now meet at the G20 summit in Japan at the end of this month. The meeting is a suggestion that trade talks between the two largest economies in the world are to find willing participation once again, after talks were abandoned just last month.

Local news

President Cyril Ramaphosa delivered his State of the Nation Address Thursday evening with a keen focus on economic transformation and job creation, as well as education, skills and health. In his speech the president has reaffirmed that the key constitutional mandate of the Reserve Bank is “to protect the value of our currency in the interest of balanced and sustainable growth”. It was noted that government will need to accelerate its endeavors to identify and release public land that is suitable for urban settlements and farming. The president aims to implement a plan to create two million jobs for ‘young people’. An appropriation bill is to be tabled to allocate a significant portion of the R230bn needed by Eskom to pay its debtors and run as a going concern.

Economic Calendar

Date Time Currency Event Previous
24 June Tentative GBP Inflation report hearings
25 June All day ALL OPEC meetings
25 June 16:00 USD CB Consumer Confidence 134.1

Source: Economic Calendar, as of 21/06/2019

Commodities

A weaker dollar has boded well for commodity prices this week, as has news of ongoing trade talks between the US and China.

Gold and oil have been the outperformers within the commodity space finding further cause for gains on escalating geo-political tensions between the US and Iran. The US has blamed Tehran for recent attacks on oil tankers within the gulf and is alleged to have threatened military action on the region. Iran has said that if the US was to impose military action, that there would-be far-reaching consequences. Previously, a heavily sanctioned Iran has threatened to close the strait of Hormuz to disrupt seaborne shipments of crude as a consequential measure.

The Rand

The rand has managed to claw its way out of the oversold levels realised just last week, as improved risk appetite see’s emerging market currencies appreciating in the short term.

A dovish outlook from the US Federal Reserve has seen the dollar leading declines in developed market currencies. The Federal Reserve Bank, while keeping lending rates on hold at Wednesdays Monetary Policy Committee meeting, has removed the word ‘patient’ from communications which implies that the future of interest rates in the US is not to remain on hold, but rather lowered in the medium term. The prospect of more accommodative rates has equated to dollar weakness which has supported moves in commodity and equity markets this week.

Companies

KAP Industrial Holdings Limited: released a 2H18 trading statement, guiding HEPS are expected to be at least 20% lower than the prior year’s comparable period.

Brait SE: FY19 results showed a diluted loss per share of 2,219.00c, from 2,092.00c reported in the previous year.

Omnia Holdings Limited: released a FY19 trading update, guiding that the company expects to report a diluted loss per share of between 591.00c and 670.00c.

Peregrine Holdings: FY19 results showed assets under management to have increased by 20% to R124bn

The Multichoice Group: FY19 results showed group trading profit for the period to have increased by 11% from the previous year.

Date

Corporate Calendar

24 June Vodacom Group Ltd Full year 2019 Dividend payment date
24 June Mr Price Group Limited Full year 2019 Dividend payment date
24 June Life Healthcare Interim 2019 Dividend payment date
26 June Oceana Group Ltd Interim 2019 Ex-dividend date
26 June Pioneer Foods Interim 2019 Ex-dividend date
26 June African Phoenix Investments Interim 2019 Results
26 June Clicks Group Interim 2019 Ex-dividend date
27 June Exxaro Resources Limited Interim 2019 Trading statement [pre-close]
28 June Naspers General Meeting re investment in NewCo & Share Issue
28 June Anglo American Platinum Interim 2019 Trading statement

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