The Week Ahead

14 - 18 September 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 Decliners

South African investment house, Brait SE, announced that it intends to raise 350 million pounds ($541 million) via a convertible bond for the funding of acquisitions. The company (also listed in Luxembourg), saw an intraday share price decline in excess of 10% following the news on Friday.

Anglo American Platinum Ltd (Amplats) announced that the company had entered into a Sale and Purchase agreement with Sibanye Gold Limited to sell its Rustenburg mining and concentrating operations. The sale will amount to at least R4.5bn, R1.5bn (cash or Sibanye shares) is to be paid upfront and the balance equalling 35% of free cash flow generated by these operations is to be paid over the next few years. The share price of Amplats reacted favourably to the news initially, although has fallen in the latter part of the week on renewed rand strength and underlying platinum price weakness.

Top Gainers

Anglo American Plc (Anglos) finds itself on the opposite end of the top movers list to that of its platinum mining subsidiary Amplats. Accompanied by resource peers BHP Billiton and Kumba, Anglo’s gains follow a rebound to 10-week highs in the underlying price of iron ore. Markets are hopeful that renewed infrastructure spend from the Chinese government will boost demand for commodities, particularly that of the steel making ingredient.

Steinhoff International’s share price reacted favourably to the release of its FY 2015 results. Over the reporting period, revenue from continuing operations increased by 15% while headline earnings from continuing operations increased by 36%. The dividend offering has been increased by 10% and the Net Asset Value for the group has increased by 22% to R48.24 per share.

Source: IG Insight, as of 11/09/2015

Date Company Event Amount
14-Sep Ad Tech Ltd Ex-Dividend R0.125
14-Sep Adcock Ingram Holdings Ltd Ex-Dividend R0.81
14-Sep Assore Ltd Ex-Dividend R3.00
14-Sep Discovery Ltd Ex-Dividend R4.59
14-Sep Distell Group Ltd Ex-Dividend R1.88
14-Sep Grindrod Ltd Ex-Dividend R0.136
14-Sep Grindrod Ltd Ex-Dividend R4.04
14-Sep Growthpoint Properties Ltd Ex-Dividend R0.445
14-Sep Massmart Holdings Ltd Ex-Dividend R1.46
14-Sep Naspers Ltd Ex-Dividend R4.70
14-Sep Santam Ltd Ex-Dividend R2.88

Source: Economic Calendar, as of 11/09/2015

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

Click to view this week's broker consensus

Market overview

Local

Mining production increased by 5.6% year-on-year in July 2015. The highest positive growth rates were recorded for Platinum Group Metals (PGMs), manganese ore, chromium ore and diamonds. The main positive contributors to the increase were from PGMs and manganese ore.

Iron ore (-8.6% and contributing -1.9 percentage points) and gold (-7.4% and contributing -1.2 percentage points) were significant negative contributors to the figure.

Manufacturing production increased by 5.6% in July 2015 compared with July 2014. This increase was mainly due to higher production in the following divisions:

  • Basic iron and steel, non-ferrous metal products, metal products and machinery
  • Motor vehicles, parts and accessories and other transport equipment (39.6% and contributing 2.6 percentage points).

International

In China, trade balance data revealed a $60.2bn surplus for August 2015. Exports for the month declined by 6.1% while imports for the month fell by 13.8% to realize the trade surplus figure.

In the U.K., the Monetary Policy Committee (MPC) meeting yielded little in the way of surprises as the official bank rate was left unchanged at 0.50%.

In the U.S., jobless claims data showed 275 000 people to have filed for unemployment benefits in the previous week, which less than what was forecast as well as the previous weeks figure.

The week ahead

The moment markets have been anticipating will be realized in the new week, at the Federal Open Market Committee (FOMC) meeting on Thursday. Market volatility is likely to climax into the meeting as we await the answer to the question “Will the Fed raise rates in September?” when the central bank announces changes (if any) to the Federal funds rate. Inflation data out of the U.S. on the Wednesday, which precedes the event, is also likely to influence the rates decision and will be closely monitored.

Date Time Region Event Previous Estimation
13-Sep 07:30 CNY Industrial production y/y 6.30% 6.00%
15-Sep 10:30 GBP CPI y/y - 0.10%
15-Sep 11:00 EUR German ZEW economic sentiment - 25
15-Sep 14:30 USD Core retail sales m/m - 0.40%
15-Sep 14:30 USD Retail sales m/m - 0.60%
16-Sep 10:30 GBP Average earnigs index 3m/y - 2.40%
16-Sep 13:00 SA Retail trade sales y/y - 3.50%
16-Sep 14:30 USD CPI m/m - 0.10%
16-Sep 14:30 USD Core CPI m/m - 0.10%
17-Sep 10:30 GBP Retail sales m/m - 0.10%
17-Sep 14:30 USD Building permits - 1.12M
17-Sep 16:00 USD Philly Fed manufacturing index - 8.3
17-Sep 20:00 USD FOMC economic projections - -
17-Sep 20:00 USD FOMC statement - -
17-Sep 20:00 USD Federal funds rate <0.50% <0.25%
17-Sep 20:30 USD FOMC press conference - -
17-Sep 10:00 SA Wholesale trade sales y/y - 0.40%
17-Sep 11:30 SA Motor trade sales y/y - 2.80%

Source: Economic Calendar, as of 11/09/2015

 

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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 11/09/2015

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