The Week Ahead

8 - 12 June 2015

A regular 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

 

Shares overview

Source: IG Insight, as of 05/06/2015

Top gainers

Kumba Iron Ore has continued the move, which sent the share to the top of the gainers list last week after news broke that Chinese stockpiles of the steel making ingredient had started to contract.

In the current trading week, iron ore reached a three-month high following suggestions that the seaborne market for the metal has seen an increase in demand as reported by the Steel Index. Kumba would have also seen the significant weakening of the rand improve market sentiment around the company’s export prospects.

Top Decliners

Market movements have been catalysed by macroeconomic events, as the week’s company calendar has been very light compared to that of weeks gone by. The incremental gains on the gainers list, relative to the large declines on the decliner’s lists, once again highlight a broader market, which is under significant pressure.

Broad-based selling has been the order of the day, as those market participants unwinding positions look to have done so indiscriminate of sector. When this phenomenon occurs, it is reflected in uncorrelated shares moving in a correlated fashion and is indicative of a fear present in markets.

INET BFA's weekly Broker Bonsensus on the top traded shares.

Click to view this week's broker consensus

 

 

Date Company Event Amount
08-Jun JSE Ltd Ex-Dividend R0.8
08-Jun MAS Real Estate Ex-Dividend EUR:0.0115
08-Jun Pik n Pay Stores Ltd Ex-Dividend R0.985
08-Jun PPC Ltd Ex-Dividend R0.24
08-Jun Pik n Pay Holdings Ltd Ex-Dividend R0.4785
08-Jun Spar Group Ltd Ex-Dividend R2.39
08-Jun Telkom SA SOC Ltd Full-year results, 2015 n/a
08-Jun Tsogo Sun Holdings Ltd Ex-Dividend R0.6
10-Jun Peregrine Holdings Ltd Full-year results, 2015 n/a
12-Jun Mediclinic International Ltd Ex-Dividend R0.755
12-Jun Mr Price Group Ltd Ex-Dividend R3.69
12-Jun Netcare Ltd Ex-Dividend R0.38
12-Jun Reunert Ltd Ex-Dividend R1.05
12-Jun Tongaat-Hullet Ltd Ex-Dividend R2.10

Source:  Economic Calendar, as of 05/06/2015

 

Market overview

Local Data

Volatility has increased as broad-based sector declines have been the order of the week amidst a light local calendar but high impact international calendar.

The South African Chamber of Commerce and Industry's business confidence index fell to 86.90 in South Africa, in May from a reading of 89.90 in the previous month. The South African HSBC Purchasing Managers' Index (PMI) fell to 50.10 in May from 51.50 in April.

The severe depreciation of the rand has perhaps been the most significant of moves as it shed in excess of 3% against the dollar, capitulating after strong U.S. employment data was released on Friday afternoon.

International Data

In Europe, Greece continued to dominate market headlines as the country’s debt repayment deadline (5 June), in terms of funds due to the International Monetary Fund (IMF) drew near. In deadlocked talks with the Troika bailout funds for Greece are yet to be secured and in turn, the repayment due to the IMF has now been deferred to the end of the month.

In the U.S., Friday’s non-farm employment change data came in well ahead of expectation (221000) with 288000 jobs reported as being added to the payroll in May 2015. Average hourly earnings increased 0.3 percent from the prior month and the participation rate of those actively seeking employment increased to 62.9% from 62.8% in the preceding month. The unemployment rate did however rise to 5.5% from the previous month’s level of 5.4% as more people were recorded as having entered the labour force. 

The week ahead

The new week will see the domestic market updated in terms of the current health of the mining and manufacturing industries, as production and sales data for April 2015 is scheduled for Thursday.

Chinese trade balance data on Monday morning will be of particular importance, as market participants look to see the regions level of trade, which as of late, has witnessed a decline in both imports and exports amidst a slowing economy. This will be furthered by Thursday’s industrial output data scheduled for release.

In the U.S., retail sales data on Thursday and Producer Price Index (PPI) data as well as consumer sentiment data on Friday will be closely monitored in light of the prevalent theme of the timing of monetary tightening within the region.

Date Time Region Event Previous
08-Jun Tentative CNY Trade balance 34.1B
09-Jun 03:30 CNY CPI y/y 1.50%
10-Jun 10:30 GBP Manufacturing production m/m 0.40%
11-Jun 07:30 CNY Industrial production y/y 5.90%
11-Jun 14:30 USD Core retail sales m/m 0.10%
11-Jun 14:30 USD Retail sales m/m

0.00%

11-Jun 14:30 USD Unemployment claims 276K
11-Jun 11:30 SA Mining:Production & sales Apr 2015 18.80%
11-Jun 13:00 SA Manufacturing:Production & sales Apr 2015 3.80%
12-Jun 14:30 USD PPI m/m -0.40%
12-Jun 16:00 USD Prelim UoM consumer sentiment 90.7

Source:  Economic Calendar, as of 05/06/2015

 

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Broker consensus

Source: INET BFA, as of 05/06/2015

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