13 April - 17 April 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
A generally positive week for equity markets is evidenced by scarcity in the decliners list, which remains host to the usual suspects.
As iron ore surpasses oil as the worst performing commodity over the last fifteen months, Kumba Iron Ore, the last purely exposed, non-diversified exponent of the steel-making ingredient (amongst the blue chip counters) has fallen to lows not witnessed since January 2009. The company’s profitability remains under question, as the weakening rand looks unlikely to be enough to curb losses in the commodity price.
Despite a rebound in rand denominated platinum, local miners of the precious metal such as, Amplats and Implats, continue to fail in terms of finding a bid. The lack of buying enthusiasm shows a lack of belief in the sustainability in this week’s move of the underlying.
Mondi heads up the gainers list this week benefitting in part from its global diversity and in turn, rand hedging attributes. The company is also set to pay a healthy R3.79 per share dividend with the last day’s trade for entitlement thereof being Friday 17th April 2015.
Sasol’s share price has found short-term reprieve while brent crude rebounds as concerns of an increase of oil supply from Iran to the U.S. (following the nuclear deal) abate. The improved oil price has found place despite reports showing crude inventories in the U.S. have gained to their highest levels in more than a decade.
|13-Apr||Wilson Bayly Holmes||Ex-Dividend||R1.10|
|13-Apr||Barclays Africa Group||Ex-Dividend||R5.25|
|13-Apr||Sekunjalo||Name change:African Equity Empowerment||N/A|
|17-Apr||Old Mutual Plc||Cum-Dividend||£0.07|
Source: Economic Calendar, as of 10/04/2015
Manufacturing production continued to show signs of contraction with a 0.5% year-on-year decrease in February 2015. The decline was mainly due to lower production in the petroleum, chemical, rubber and plastic products.
Mining production surprised on the upside as an increase of 7.5% year-on-year recorded in February 2015. The highest growth rates recorded for Platinum Group Metals/PGMs (26.7%), iron ore (22.6%) and manganese ore (16.8%). The increase in PGMs production levels does however find a comparative against last year’s figure where major producers were experiencing prolonged strike action.
Local gross gold and foreign exchange reserves recorded at $46.44bn, while the net figure for the aforementioned were reported to be $41.28bn.
In China, equity markets have been buoyant, as anticipation of further stimulus are fuelled by comments from the Peoples Bank of China (PBOC). The central bank’s head, Mr Zhou, alluded to the country having further scope to respond to concerns around easing economic growth within the region.
In the U.S., the timing of monetary tightening remained at the centre of financial market attention as minutes released from the Federal Open Market Committee meeting. The meeting reflected disparity in Fed member views over when rate hikes would begin, however left the door open for the possibility of commencement in June. The actual meeting from which the minutes were transcribed precede the recent downturn in employment activity witnessed in last week Friday’s job report, suggesting that June may now be out of the equation in terms of rate hike likelihood.
The week ahead
The new week will see the monthly run of retails sales data locally, although the most material market moving data is likely to come from abroad.
Chinese trade balance data will kick the week off, while Wednesday will see the region release Gross Domestic Product (GDP) data. The market will find prevalence in both data points looking at the value of imports and exports and searching for further evidence relating to the slowing rate of growth in the world’s fastest growing economy.
The European Central Bank is likely to keep lending rates unchanged this week before addressing the public in the press conference to follow.
U.S. data will continue to dictate the ebb and flow of dollar strength with retail sales in the beginning of the week and CPI data out at the end of the week. CPI data is perhaps one of the more important data points in terms of helping determine when interest rates will rise in the U.S. as Fed Chair, Mrs Janet Yellen, has targeted a move towards 2% in term of aiding the decision to tighten.
|14-Apr||14:30||US||Core retail sales m/m||-0.10%|
|14-Apr||14:30||US||Retail sales m/m||-0.60%|
|15-Apr||13:00||SA||Retail trade sales, Feb 2015||1.7%|
|15-Apr||13:45||EU||Minimum bid rate||0.05%|
|15-Apr||14:30||EU||ECB press conference||-|
|16-Apr||10:00||SA||Wholesale trade sales, Feb 2015||-2.3%|
|16-Apr||14:30||US||Weekly unemployment claims||281000|
|17-Apr||10:30||UK||Claimant count change||-31000|
|17-Apr||14:30||US||Core PPI m/m||0.20%|
|17-Apr||16:00||US||Preliminary consumer sentiment||93|
Source: Economic Calendar, as of 10/04/2015
Attend one of our free Trading strategy and Market update seminars, and with the help of our experts refine your trading strategy.
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)
Source: INET BFA, as of 10/04/2015
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.