The Week Ahead

6 - 12 November 2015

A 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

Top Gainers

Retailers Mr Price and Woolworths were given a boost this week when sector companion Truworths released an impressive trading update.

Former “blue chip” counter (current midcap stock) Truworths announced that retail sales for the first 18 trading weeks, of the 2016 financial year, increased by 19% (vs prior year’s 18 week comparative) to R4.4 billion, as cash sales grew by 25% and credit sales by 17%. The news has lifted short term sentiment around the health of the consumer and in turn improving the retail sectors near term outlook.

Top decliners

Despite a brief reprise in the resource sector, following Chinese Premiere Li Keqiang’s comments, that the China had capacity to maintain economic growth above 6.5%, gains were short lived as the prospect of a nearing U.S. rate hike emerged as the prominent market theme once again.

Shares Bhp Billiton, AngloGold Ashanti and Anglo American Platinum found themselves at the forefront of decline in lieu of the aforementioned market theme which equated to further dollar strength and commodity price weakness.

Luxury goods maker Richemont saw a negative reaction to its results, which although robust, fell short of analyst estimates and where the market’s pricing of the share. Some of the salient features of the interim results were as follows:

  • Sales increased by 15 % to EUR 5 821 million; a 3 % increase at constant exchange rates
  • Strong sales through Maisons’ own boutiques offset mixed wholesale sales, which were particularly weak in the Asia Pacific region
  • Operating profit increased by 6 % to EUR 1 390 million
  • Operating margin was resilient at 24 %
  • Profit for the period increased by 22 % to EUR 1 103 million
  • Solid cash flow from operations of EUR 1 055 million

 

Source: Market Insight, as of 06/11/2015

Date Company Event Amount
9 Nov AngloGold Ashanti Ltd (SA) Q3 2015 Earnings release N/A
9 Nov Remgro Ltd  Ex-dividend 259c
9 Nov Lonmin PLC (SA) Full-year 2015 earnings release N/A
9 Nov Vodacom Group Ltd Interim 2015/16 earnings release N/A
9 Nov Lewis Group Ltd Half year 2015 earnings release N/A
9 Nov Raubex Group Ltd Interim 2015/2016 earnings release N/A
10 Nov S teinhoff International Holdings Ltd Ex-dividend 0.5983USD
10 Nov  Capital & Counties Trading statement expected N/A
12 Nov Sappi Full-year 2015 earnings release N/A
12 Nov SABMiller Plc Half-year  2016 earnings release N/A

Source:  Economic Calendar, as of 06/11/2015

A weekly Broker Consensus of the top traded shares.

Click to view this week's broker consensus

Market overview

Economic Overview

International data

A resource led rally at the beginning of the week was halted and reversed following a hawkish interpretation of Federal Chair person, Ms Janet Yellens testimony on Wednesday evening. Ms Yellen’s comments that a December rate hike remains a “live possibility” unnerved markets.

The tail end of the week saw the release of employment data provide further support to the sentiment of those expecting a U.S. rate hike in December. U.S. Non-Farm Employment data showed 271000 jobs to have been added to the payroll in October 2015. The figure was well ahead of consensus estimates which had predicted that 185000 jobs would have been added. The Unemployment rate was reported as having remained at the 5% level last month. 

Local Data

The rand was at the mercy of a strengthening Dollar on the aforementioned U.S. headlines as emerging market currencies fell under increased pressure. The rand was trading firmly above the R14 to the dollar mark at the end of the week, although only marginally weaker against the Euro and the British pound. 

The Week Ahead

The new week will see market participants focus on Chinese industrial production data on Wednesday, as well as European Central bank President Mario Draghi’s public address. Friday will see continued focus on U.S. data with Consumer Sentiment and Retail Sales data scheduled for release. Friday will also see the health of the Eurozone assessed with the release of Q3 GDP data from the region, the most significant of which being Germany’s GDP print.

At home we await further evidence relating to the health of the local manufacturing and mining industries with the release of production and sales data on Tuesday (Manufacturing) and Thursday (Mining).

Date Time Region Event Previous
10 Nov 15:30 CNY CPI y/y 1.60%
10 Nov 13:00 SA Manufacturing production & sales -0.20%
11 Nov 07:30 CNY Industrial Production y/y 5.70%
11 Nov   GBP Claimant Count Change 4.6k
11 Nov 15:15 EUR ECB President Draghi Speaks  
12 Nov 11:30 SA Mining production & sales 3.80%
12 Nov 15:30 USD Unemployment claims 276k
13 Nov 09:00 EUR German Prelim GDP q/q 0.40%
13 Nov 15:30 USD Core retail sales m/m -0.30%
13 Nov 15:30 USD PPI m/m -0.50%
13 Nov 15:30 USD Retail sales m/m 0.10%
13 Nov 17:00 USD Prelim UoM Consumer Sentiment 90

Source:  Economic Calendar, as of 06/11/2015

 

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Last week's report

A reminder of the key company news announced last week.

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Broker consensus

Source: iNet BFA, as of 06/11/2015

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