The Week Ahead

13 June 2014

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

By Shaun Murison,  IG Market Analyst

View market data

Company announcements


Economic catalysts

Market overview


The week opened with China’s report of a trade surplus in May of $35.9bn, which was nearly double the surplus reported in April. A noticeable surge in exports to the US (+21%) providing a buoyant start to the trading week for global markets as the largest economy in the world looks to be improving further whilst starting to consume more.

Further data releases during the week out of the US were relatively disappointing. Core Retail and Retail sales month on month showed only minor growth of 0.1% and 0.3% respectively, while weekly unemployment data showed 317 000 people claimed unemployment benefits over the period, which was 11 000 more than expected and 4000 more people than the previous week.

Employment data out of the UK showed that 27 000 less people claimed unemployment related benefits in May while the unemployment rate unexpectedly improved more than anticipated to 6.6%. 

Local Data

The Rand has continued to depreciate this week against major currency peers and at an even faster rate than a fair number of fellow emerging market currencies. The underperformance can in part be linked to poor domestic data such as contracting GDP and a worse than expected trade deficit reported in recent weeks. The now 21 week strike within the platinum sector has also been a contributor to the weakness, although this week, optimism over a resolve “in principle” provided the only near term relief for the rand, which started to strengthen on the news. Unfortunately a ratings downgrade on our currency from the Fitch Ratings agency more than offset the optimism of a platinum strike resolution’s effect on the rand.

Fitch has maintained a “BBB” rating for our domestic currency, while downgrading the outlook from “stable” to “negative”.

Manufacturing production decreased by 1.5% annualised and 1.8% from the previous 3 months comparative as the sector shows signs of further contraction.

Mining production grew an annualised 0.2% in April, which was ahead of analyst expectations for a significant contraction. 


Source: IG Insight, as of  13/06/2014

Top movers

Source: IG Insight, as of 13/06/2014

The top gainers list this week is dominated by rand hedge counters, as the rand continues to weaken amidst poor local economic data and a ratings downgrade. The heavy weighting of counters SABMiller, Naspers and Sasol in the Jse All-Share and Top40 indices has however managed to see these benchmark indices trade to new high territory once again.

Sasol has broken out of a short term trading range as it benefits from both a late in the week surge of the price of Brent crude oil, as well as the aforementioned rand depreciation. Escalating tension, between Iraqi forces and Islamist militants in Iraq has provided the catalyst for the sharp increase in the oil price as the country is a major oil producer and the threat of further contagion to neighboring  oil producers hampers investor sentiment.

Mondi finds itself amongst the top blue chip decliners this week on what appears to be profit taking. Also possessing rand hedging attributes the counter headed up the gainers list and traded to new all-time highs just  last week and despite losing traction in the current week was well of the session lows.

Also in the decliners list this week is another market darling of previous weeks, Mediclinic. The weakness in price can however be attributed to the dilution of shares through the completion of a bookbuild offering. Mediclinic successfully raised R3.17bn in the issue of 41 000 000 new ordinary shares at a discount of 1.7% to the value weighted average price (vwap) at the close of trade on Wednesday. 


Broker consensus

Brokers view on the markets.

Click to view this week's broker consensus

Please note that the broker consensus will be updated with latest fisgures on Tuesday, 17 June 2014.




Why trade stock index futures?

Stock index futures are leveraged products, giving you potential gains (or losses) greater than your up-front capital.Stock index futures are leveraged products, giving you potential gains (or losses) greater than your up-front capital.

View the guide now

Try our platform

Follow one of the links below for a quick look at our web-based platform and the range of markets on offer.

Domestic account

  • Explore our platform with no login
  • Search for your favourite shares and open deal tickets
  • Access charts and technical analysis tools

International account

  • Explore our platform with no login
  • Search for your favourite shares and open deal tickets
  • Access charts and technical analysis tools

Open a demo

If you're interested in finding out more about the range of markets available and the functionality of our trading platform, you can open a demo account. 

Domestic account

  • Trade with R100,000 practice funds for two weeks
  • Access charts and view our range of local markets
  • Trade online or via our mobile apps

International account

  • Trade with £10,000 practice funds for two weeks
  • Access charts and view live prices
  • Trade online or via our mobile apps

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: I-Net Bridge, as of 06/06/2014