The Week Ahead

9 - 13 March 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 06/03/2015

Top gainers

The MTN Group reported revenue to have increased 6.4% and Headline Earnings Per Share (HEPS) by 8.9% over the company’s last financial year. Strong growth (33.2%) was achieved once again in data revenue (as is the industry trend) and now accounts for around 18% of the group’s total revenue. The company has reduced capex spend by 16.3% while increasing the cash inflow generated by operations 8.2%. Another healthy final dividend of 800c per share was declared.

Following the release of its interim results, Aspen has moved closer to all-time high territory once again. Gross revenue increased 47% and (including acquisitions concluded in the prior year) while normalised HEPS grew by 22% over the period. The strong earnings growth was achieved despite an unfavourable strengthening of the dollar against the Group’s major trading currencies.

Top Decliners

It would appear a slow reversion back to trends of the past has started to occur as the decliners list finds itself dominated by resource counters once again. Renewed U.S. dollar strength has seen commodity prices under pressure and in turn local producers thereof bearing the brunt of this week’s market uncertainty.

Market participants will now be wondering if a generally upbeat start to the New Year (for diversified resource counters in particular) will fade out into March as it has done the last two years.

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

Click to view this week's broker consensus

 

 

DATE COMPANY EVENT AMOUNT
09-Mar City Lodge Hotels Ex-Dividend R 2.30
09-Mar Discovery Ltd Ex-Dividend R 4.30
09-Mar Distell Group Ltd Ex-Dividend R 1.58
09-Mar Kumba Iron Ore Ex-Dividend R 7.73
09-Mar Onelogix Group Ex-Dividend R 0.08
09-Mar Remgro Ltd Ex-Dividend R 1.69
09-Mar Truworths International Ltd Ex-Dividend R 2.36
09-Mar AVI Ltd Interim results N/A
09-Mar Sasol Ltd  Interim results N/A
10-Mar Firstrand Ltd Interim results N/A
13-Mar Anglo American Plc Cum-Dividend $ 0.59
13-Mar Commair Cum-Dividend R 0.05
13-Mar Sibanye Gold Cum-Dividend R 0.62

Source: Economic Calendar, as of 06/03/2015

Market overview

Local Data

It has been a relatively quiet week in terms of economic data and in-turn our local equity has taken most of its guidance from a busy company earnings calendar, U.S. employment data as well as ECB and BOE monetary policy meetings.

The local data released is as follows:

  • New vehicle sales, in South Africa, recorded an increase of 1.1% in February (on an annualised basis) after having declined 1.2% in the preceding month.
  • The SACCI indicated that its business confidence index in South Africa rose to a reading of 92.80 in February from a reading of 89.30 posted in the previous month.
  • The manufacturing purchasing managers index (PMI), as reported by the Bureau of Economic Research, dropped to a reading of 47.6 in February from a reading of 54.2 in January. The figure fell below consensus estimates, which predicted an index reading of 52.

International Data

The European Central Bank (ECB) kept benchmark lending rates unchanged on Thursday, followed by a rather upbeat press conference and address by ECB President Mario Draghi. In the address, the outlook for growth was revised higher to 1.5% in FY2015 (from 1%) and 1.9% in FY2016. The inflation expectation for the year has however been revised lower to 0% from 0.7%. The previously announced asset-purchasing program is set to commence on 9 March 2015.

In the U.K., the Bank of England (BOE) kept rates unchanged and maintained its current asset purchasing facility at GBP 375.00 billion in line with market expectations.

In the U.S., non-farm employment data showed 295000 jobs added to the payroll in February, while the unemployment rate was realised at 5.5%. Both data prints came in ahead of consensus estimates and the U.S. dollar strengthened significantly as a result, in lieu of a possible nearing of interest rates being tightened in the world’s largest economy.

The week ahead

The new week looks relatively subdued in terms of upcoming economic and corporate news.

Investors will look to Chinese trade balance data set for release on Sunday as having perhaps the largest potential to catalyse markets. The last such report, for January, highlighted a record trade surplus for the region, as imports fell by almost 20% and exports by 3.3%. Most notable was the drop in value of iron ore imports (50.3%).

AVI, Sasol and Firstrand are all scheduled to release interim results over the course of the new week. For what to expect on the upcoming Sasol results see here.

DATE TIME REGION EVENT EST. PREV.
08-Mar all day CNY Trade balance - 60bn
10-Mar 03:30 CNY CPI y/y - 0.80%
10-Mar 03:30 CNY PPI y/y - -0.43%
11-Mar 07:30 CNY Industrial production y/y - 7.90%
11-Mar 11:30 UK Manufacturing production m/m - 0.10%
12-Mar 13:00 SA Manufacturing production y/y - 1.10%
12-Mar 14:30 US Core retail sales - -0.90%
12-Mar 14:30 US Retail sales - -0.80%
12-Mar 14:30 US Unemploymend claims w/w - 320000
13-Mar 14:30 US PPI m/m - -0.80%
13-Mar 16:00 US Preliminary UoM conseumer sentiment - 95.4

Source:  Economic Calendar, as of 06/03/2015

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When and where

Date

Time

Location

Duration

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

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Broker consensus

Source: INET BFA, as of 06/03/2015

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