The Week Ahead

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

 

Shares overview

Source: IG Insight, as of 10/04/2015

A generally positive week for equity markets is evidenced by scarcity in the decliners list, which remains host to the usual suspects.

Top gainers

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. 

Top Decliners

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.

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

Click to view this week's broker consensus

 

 

DATE COMPANY EVENT AMOUNT
13-Apr Group Five Ex-Dividend R0.30
13-Apr RCL Foods Ex-Dividend R0.15
13-Apr Wilson Bayly Holmes Ex-Dividend R1.10
13-Apr Bidvest Group Ex-Dividend

R4.26

13-Apr Barclays Africa Group Ex-Dividend R5.25
13-Apr Mpact Ex-Dividend R0.66
13-Apr Exxaro Resources Ex-Dividend R2.10
13-Apr Sanlam Ex-Dividend R2.25
13-Apr Capitec Bank Ex-Dividend R5.90
13-Apr Advtech Ex-Dividend R0.15
13-Apr Sekunjalo Name change:African Equity Empowerment N/A
17-Apr Bowler Metcalf Cum-Dividend R0.18
17-Apr Gencore Plc Cum-Dividend $0.12
17-Apr Growthpoint  Cum-Dividend R0.45
17-Apr Mondi Ltd Cum-Dividend R3.39
17-Apr Metair Investments Cum-Dividend R0.80
17-Apr Old Mutual Plc Cum-Dividend £0.07
17-Apr Standard Bank Cum-Dividend R3.39
17-Apr Telemaster Holdings Cum-Dividend R0.01
17-Apr Vunani Cum-Dividend R0.05

Source: Economic Calendar, as of 10/04/2015

 

Market overview

Local Data

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.

International Data

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.

Date Time Region Event Previous
13-Apr 03:30 CNY Trade balance 30.6bn
14-Apr 10:30 UK CPI y/y 0%
14-Apr 14:30 US Core retail sales m/m -0.10%
14-Apr 14:30 US Retail sales m/m -0.60%
14-Apr 14:30 US PPI m/m -0.50%
15-Apr 13:00 SA Retail trade sales, Feb 2015 1.7%
15-Apr 16:00 CNY GDP q/y 7.30%
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 Building permits 1.09m
16-Apr 14:30 US Weekly unemployment claims 281000
17-Apr 10:30 UK Claimant count change -31000
17-Apr 14:30 US CPI m/m 0.20%
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

 

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When and where

Date

Time

Location

Duration

15 April 18:30 Stellenbosch 1.5hrs
16 April 18:30

Cape Town

1.5hrs
20 May 18:30 Johannesburg 1.5hrs
21 May 18:30 Pretoria 1.5hrs
24 June 18:30 Durban 1.5hrs

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Broker consensus

Source: INET BFA, as of 10/04/2015

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