The Week Ahead

11 - 15 May 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 08/05/2015

Top gainers

A busy week in terms of economic data has equated to significant volatility in financial markets. The continued rebound in resources has left many considering whether the lows are now in for these stocks. Strong volume would suggest significant accumulation within the sector although the continued uncertain macro-economic environment is likely to keep short-term volatility in play.

Kumba Iron Ore has gained more than 60% from the low to high since the 15th of April 2015. Friday saw the release of an interim trading statement from the company in which it advised that headline earnings per share are expected to have declined at least 20% over the period as export prices of iron ore have been materially lower. Despite the news the share has managed to hold on to weekly gains, perhaps an indication that the negative news has largely been digested.

SABMiller is set to release full-year results on the 13th of May 2015. A trading statement released in April has guided that over this period group net producer revenue is expected to be $26.719m and EBITDA at $6.6401m. The company also released an update to the company’s Q1 figure in the MillerCoors division, in which 4.4% growth has been achieved in underlying net income.

Top Decliners

The decliners list finds itself populated with stocks, which have been notable outperformers in months gone by. Global uncertainty and in turn market volatility has perhaps provided excuse for profit taking on these shares that have traded with significant momentum previously. Relatively low volume accompanying these moves would suggest that the implied rotation out of industrial and financial counters may still be a premature assumption.

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

Click to view this week's broker consensus

 

 

DATE COMPANY EVENT
11-May AngloGold Ashanti Ltd Q1 2015 results
11-May Lonmin PLC (SA) Half-year 2015 results
11-May Raubex Group Ltd Full-year 2014 results
11-May Nedbank Group Ltd Q1 2015 trading statement
11-May Raubex Group Ltd Full-year 2014/2015 results
13-May SABMiller PLC (SA) Full-year 2015 results
13-May Life Healthcare Group Holdings Ltd Interim results
13-May DataTec Ltd (SA) Full-year results
13-May Life Healthcare Group Holdings Ltd Interim results
13-May Mondi Ltd (SA) Interim management statement release
14-May Sappi Ltd Interim results
14-May Oceana Group Ltd Interim results

Source: Economic Calendar, as of 08/05/2015

 

Market overview

Local Data

After reaching all-time highs just last week, our local index has found itself under pressure for the majority of the period finding direction predominantly from global economic events. On the local front, the South African Reserve Bank reported gross gold and foreign reserves to have increased to $47.043B in April, while net reserves increased to $41.934b.

The consumer confidence index fell to -4.00 in 1Q15, compared with market expectations of a fall to -1.00. In the prior quarter, the consumer confidence index had recorded a reading of 0.00. The SAACI business confidence index rose to 89.90, in April from a reading of 89.10 in the prior month. Kagiso manufacturing PMI data declined to a level of 45.40 in April. In the previous month, the manufacturing PMI had recorded a level of 47.90. The NAAMSA vehicle sales in South Africa dropped 3.3% in April on an annual basis, lower than market expectations of a drop of 0.6%.

International Data

In China, HSBC final manufacturing PMI data alluded to further industry contraction with an index reading of 48.9 (Est 49.4). Trade balance data showed a surplus of $169.2b in February on the back of a 48.3% surge in exports while imports declined 20%. In the U.K., parliamentary elections saw that Prime Minister David Cameron and the Conservative Party will retain governance for another five years.

In the U.S., trade balance data showed a larger than expected deficit for the world’s largest economy recorded at $34.1b. Non-farm employment data showed a net increase of 223,000 in jobs while the unemployment rate dropped to 5.4%, its best level since 2008. 

The week ahead

The new week will find less in the way of high impact catalysts, although enough in terms of holding the potential for continued market volatility. On the local front, manufacturing production data will provide further evidence as to the health of the industrial sector, which has been contracting over the last few months. Mining production will be closely monitored in light of depressed commodity prices currently prevalent.

In Europe, German preliminary GDP data will perhaps hold the most significance in light of global growth concerns being a key market theme and the German economy being the largest within Europe. In the U.S., retail sales as well as consumer sentiment data is likely to provide the ebb and flow of currency movements as markets continue to speculate as to when we can expect monetary tightening out of the world’s largest economy.

Date Time Region Event Previous
11-May All day EUR Euro group meetings -
11-May 13:00 GBP Official bank rate 0.50%
11-May Tentitive GBP

MPC Rate statement

-
12-May 10:30 GBP Manufacturing production m/m 0.4%
12-May 13:00 SA Manufacturing production & sales, Mar 2015 -0.50%
13-May 07:30 CNY Industrial production y/y 5.60%
13-May 08:00 EUR German prelim GDP q/q 0.70%
13-May 10:30 GBP Average earnings index 3m/y 1.70%
13-May TBC GBP Claimant count change -20.7k
13-May 11:30 GBP BOE gov carney speaks -
13-May TBC GBP BOE inflation report -
13-May 14:30 US Core retail sales m/m 0.40%
13-May TBC US Retail sales m/m 0.90%
14-May 14:30 US PPI m/m 0.20%
14-May TBC US Unemployment claims 265k
14-May 11:30 SA Mining: Production & sales, Mar 2015 -

Source: Economic Calendar, as of 08/05/2015

 

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Broker consensus

Source: INET BFA, as of 08/05/2015

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