The Week Ahead

11 April 2014

Our regular look at the news making the headlines, using our market insight information and analysis tools.

By Shaun Murison and Leigh Riley, IG Market Analysts

View market data

Company announcements

Dividends

Economic catalysts

Market overview

It has been a volatile week in financial markets with our local bourse once again testing all-time high territory, before finding itself under pressure as US markets incite global market direction.

Local Data

The trading week started lower after Asian Markets snapped an 8 day winning streak led by a decline in IT and Technology stocks. South African Gold and Foreign Exchange Reserves (net) were at $45.04billion down from $45.34billion. The Business Confidence Index showed improved business sentiment with an index reading of 92.7 in February, previously 91.8. Ironically this was on the same day the International Monetary Fund (IMF) significantly lowered its South African economic growth forecast for 2014 and 2015 from 2.8% and 3.3% to 2.3% and 2.7% respectively.

Manufacturing and mining production figures released by StatsSA would have added support to the IMF’s view as both figures fell short of expectation, with the latter showing a large decline annually. Manufacturing production grew 1.4% in February year on year, while falling 1.95% on a seasonally adjusted monthly basis. The ongoing strike in the platinum sector is likely to have affected mining production, which fell 4.8% in February (annualized).

International Data

Still on the African continent, Nigeria surpassed South Africa as the largest economy after a rebasing valuing it at $491billion.

Chinese exports fell 6.6% from the previous year and imports fell 11.3%, leaving a trade surplus of $7.71billion. Tencent lead markets in Asia lower at the end of the week dropping by over 6.75% on Friday.

After an initial sell off in Tech Stocks in the USA on Monday and Tuesday, the Dow saw some interim relief buying after the Federal Reserve minutes damped bets that they were considering accelerating raising interest rates. 

In the UK the monthly Manufacturing Production increased to 1% from a previous 0.3% and interest rates were left unchanged at 0.50%, as the UK and Europe saw similar trading volatility to the USA and China.

 

Source: IG Insight, as of  11/04/2014

Top movers

Source: IG Insight, as of 11/04/2014

Naspers has swung up and down again following Tencent in the Asian market giving back gains of over 6%.

Massmart CEO Grant Pattison steps down effective 1 June 2014. Mark Lamberti also tendered his resignation effective immediately, stepping down as Chairman and Director. He was appointed Managing Director of Makro in 1988 and founded Massmart in 1990.

BNP Paribas has agreed to buy RCS Investment Holdings from Standard Bank  and Foschini Group for R2.65billion. Foschini stands to make about R1.4billion from its 55% holding and will use the capital to buy back its own shares, reducing its debt in the process. BNP dropped -1.4% in Paris, standard bank climbed 1.4% and Foschini rose 3.1%.

Woolworths shed as much as 7.9% on Wednesday after announcing it would buy David Jones in Australia for $2bn, paying a hefty 25% premium for the retailer.

Broker consensus

Brokers view on the markets.

Click to view this week's broker consensus

 

 

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