The Week Ahead

9 - 13 February 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 06/02/2015

This week witnesses a resource heavy weighting in the gainers list as commodity prices (led by oil) start to improve, although this was partially offset at the tail end of the week as dollar strength followed U.S. employment data. The decliners list features an abundance of equities which have frequented the gainers list in weeks gone by.

Top gainers

A more than 20% rebound off the lows in Brent Crude oil, has seen Sasol echo the same relief from what has been a difficult few months. News that 7% of U.S. drillers had halted production provided impetus for a rebound in oil. Further news that Sasol is to postpone development on its rather “expensive” new ethane cracker in the U.S. has also helped appease investor sentiment. Friday saw the company release a trading update in which an increase in Headline Earnings Per Share (HEPS) of between 3% and 9% is expected.

Top Decliners

Retailers Woolworths and Mr Price have found sector based weakness this week on the back of profit taking. The shares which have recently been testing all-time high territory and were some of January’s top performing shares. The respective share price declines, in the absence of any new news, have led us to the aforementioned assumption.

Woolworth is set to release interim results in the new week. The company issued a trading statement last month in which it has stated that group sales (including the impact of new acquisition David Jones) are expected to have increased by 55.2%. Barclays Africa’s decline from all-time high territory highlights short-term exhaustion in the share as the move comes despite a ratings upgrade from the Fitch Rating agency.

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

Click to view this week's broker consensus

 

 

DATE COMPANY EVENT
9-Feb Harmony Gold Interim Results
9-Feb Anglo American Platinum FY Results
9-Feb Tiger Brands Ltd Q4 Trading Update
10-Feb Kumba Iron Ore FY Results
10-Feb SABMiller Plc FY Results
11-Feb Group Five Ltd Interim Results
11-Feb Sappi Ltd Q1 results
11-Feb Aquarius Platinum Interim Results
12-Feb GoldFields Ltd FY Results
12-Feb Woolworths Interim Results
13-Feb Anglo American Plc FY Results
13-Feb ArcelorMittal South Africa FY Results

 

Market overview

Local Data

Global commitments to stimulating economic growth have once again been reaffirmed, as the Royal Bank of Australia (RBA) cut lending rates by a further 25 basis points this week and the Peoples Bank of China (PBOC) reduced the reserve requirement ratio in an attempt to boost lending. The move follows the current central bank trend in global markets which is to further ease or maintain accommodative monetary policy, as slowing growth and deflationary fears remain prevalent.

In Europe, the European Central Bank (ECB) announced that it would no longer accept Greek sovereign debt as collateral going forward. The ECB did however follow this up by saying that it would help provide the country’s banks with up to EUR60bn of emergency funding if needed.

In the U.S., non-farm payroll data showed that 257 000 people were added to the payroll in January 2015, while the unemployment rate worsened slightly to 5.7% the participation rate of those actively seeking employment remained low at 62.9%.

International Data

In what has been a quiet week domestically on both the economic and earnings front, our market has been quite buoyant following improved commodity prices and further global monetary easing. The manufacturing Purchasing Managers’ Index (PMI) for January alluded to industrial growth higher than what was expected, with an index reading of 54.20 (est. 50.1). The figure was also ahead of December’s reading of 50.20.

The business confidence index reading for January was slightly better than the previous months reading, coming in at 89.30, although still reflecting a hampered business sentiment. The South African Reserve Bank (SARB) reported net gold and foreign exchange reserves to have dropped to $42.145bn in January from $42.727bn in December 2014.

The week ahead

The new week will see the release of December 2014’s local mining and manufacturing production data in which investors will be hoping to see a move back into growth in both departments from the previous months reported contraction. The South African president is also set to release his state of the nation address on Thursday.

The week will end with further evidence over the health of the European economy as Gross Domestic Product (GDP) data is scheduled for release from Germany, France, Italy and the Eurozone.

 

DATE TIME REGION EVENT EST. PREV.
8-Feb   CNY Trade balance 48.9bn 50.1
10-Feb 03:30 CNY CPI y/y 1.1% 1.50%
10-Feb 03:30 CNY PPI y/y -3.7%

-3.30%

10-Feb 11:30 SA Unemployment data - 5.15m
10-Feb 11:30 UK Manufacturing production m/m 0.3% 0.70%
10-Feb 13:00 SA Manufacturing production m/m - 0.70%
12-Feb 10:00 SA Mining production and sales - -0.40%
12-Feb 12:30 UK BOE inflation report - -
12-Feb 15:30 US Core retail sales m/m -0.4% -1%
12-Feb 15:30 US Retail sales m/m -0.3% -0.90%
12-Feb 15:30 US Unemployment claims w/w 279000 278000
12-Feb 18:00 SA State of the nation address - -
13-Feb 08:30 EU French preliminary GDP q/q 0.1% 0.30%
13-Feb 09:00 EU German preliminary GDP q/q 0.3% 0.10%
13-Feb 11:00 EU Italian preliminary GDP q/q 0% -0.10%
13-Feb 12:00 EU Eurozone flash GDP q/q 0.2% 0.20%

 

Attend one of our free Trading strategy and Market update seminars, and with the help of our experts refine your trading strategy.

When and where

Date

Time

Location

Duration

11 February 18:30 IG office, Johannesburg 1.5hrs
12 February 18:30 Pretoria Country Club, Pretoria 1.5hrs
25 February 18:30 Premier Hotel Regent, East London 1.5hrs
26 February 18:30 Radisson Blu, Port Elizabeth  
10 March 18:30 Redlands Hotel, Pietermaritzburg 1.5hrs
11 March 18:30 Southern Sun Elangeni & Maharani, Durban 1.5hrs
1 April 18:30 Southern Sun, Bloemfontein 1.5hrs

IG provides an execution-only service. The material on this website does not contain (and should not be construed as containing) investment advice or an investment recommendation, or a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of the above information. Consequently any person acting on it does so entirely at his or her own risk. The research does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. This communication must not be reproduced or further distributed. The price levels provided are derived from ProRealtime Charts (IT-Finance)

Broker consensus

Source: INET BFA, as of 06/02/2015

Contact us

24 hours a day from 10am Saturday to Friday night at midnight.

010 344 0053

You can also email helpdesk.za@ig.com