The Week Ahead

15 - 19 June 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 12/06/2015

Global markets have started to rebound from the rout endured over the last six weeks, which has been indiscriminate of sector or jurisdiction. The rebound will have market participants debating of whether the gains fall part of a relief rally before further decline or the start of a renewed uptrend in the market place.

Top decliners

The shallow declines in the decliners list highlight a generally positive week. Mediclinic is the worst performer, although weakness follows the company discounting for a R0.76 per share dividend on Friday. Netcare has also discounted for a R0.38 per share dividend. 

Top Gainers

Void of any direct news, relative to the companies in the gainers list and in light of the diverse nature of shares on the rise, one would assume the tentative introduction of bargain hunting within our local course. Shares Woolworths, Vodacom and Discovery have been market darlings in the past and the recent correction perhaps enticing those market participants with a bullish inclination to start accumulating. 

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

Click to view this week's broker consensus

 

 

Date Company Event Amount
17-Jun Brait SE Full-year results n/a

Source:  Economic Calendar, as of 12/06/2015

 

Market overview

Local Data

Manufacturing production decreased by 2.0% in April 2015 compared with April 2014. The 2.0% year-on-year decrease in manufacturing production in April 2015 was mainly due to lower production in the following divisions:

  • Basic iron and steel, non-ferrous metal products, metal products and machinery (-4.5% and contributing -0.9 of a percentage point);
  • Petroleum, chemical products, rubber and plastic products (-2.8% and contributing -0.6 of a percentage point);
  • Radio, television and communication apparatus and professional equipment (-15.3% and contributing -0.3 of a percentage point); and
  • Wood and wood products, paper, publishing and printing (-2.3% and contributing -0.3 of a percentage point).

Mining production increased by 7.7% year-on-year in April 2015. The highest positive growth rate was recorded for Platinum Group Metals (81.6%), partly the result of a low base in April 2014 when the PGM sector was adversely affected by industrial action.

The business confidence index fell to a level of 43.00 in 2Q15, in South Africa, lower than market expectations of a drop to a level of 48.00. The business confidence index had registered a reading of 49.00 in the previous quarter.

International Data

In China, trade balance data for May 2015 showed a $59.49bn surplus as exports fell by 2.5% y/y and imports reduced by 17.9% y/y. Consumer Price Index (CPI) data showed inflation for the region to have increased by 1.2% y/y (est. 1.3%). Industrial production was reported as having increased by 6.1% y/y.

In the U.S., a relatively light economic calendar saw most data points coming in ahead of expectation. Core retail and retail sales data showed 1% and 1.2% m/m growth respectively (est. 0.7% and 1.1% respectively), while Producer Price Index (PPI) data showed inflation at a factory level to have increased 0.5% (est. 0.4%). Weekly unemployment claims were more or less in line with estimates, with 279,000 people having filed for unemployment insurance in the preceding week.

In Europe, the market continues to wait for resolve in terms of the negotiations relating to Greek aid being secured from the Troika. 

The week ahead

The new trading week will see local markets be disrupted by a public holiday on Tuesday, although Thursday’s futures close out (FCO) should provide an active market to compensate.

The FCO will be preceded by the Federal Open Market Committee (FOMC) meeting on Wednesday evening out of the U.S., in which market participants will be keenly attentive for news relating to U.S. monetary tightening. Thursday’s CPI and Core CPI data out will also hold relevance in light of its importance relative to the rising rate cycle. 

Date Time Region Event Estimation Previous
16-Jun 10:30 GBP CPI y/y 0.10% -0.10%
16-Jun 11:00 EUR ZEW: DE economic sentiment 38.6 41.9
16-Jun 14:30 USD Building permits 1.10m 1.14m
17-Jun 10:30 GBP Average earnings index 3m/y 2.40% 1.90%
17-Jun 10:30 GBP Claimant count change - -12.6k
17-Jun 20:00 USD FOMC economic projections - -
17-Jun 20:00 USD FOMC statement - -
17-Jun 20:00 USD Federal funds <0.25% <0.25%
17-Jun 20:30 USD FOMC press conference - -
17-Jun 10:00 SA CPI y/y - 4.50%
17-Jun 10:00 SA CPI m/m - 0.90%
17-Jun 13:00 SA Retail sales y/y - 2%
18-Jun 10:30 GBP Retail sales m/m -0.10% 1.20%
18-Jun 11:15 EUR Targeted LTRO - 97.8b
18-Jun 14:30 USD CPI m/m 0.50% 0.10%
18-Jun 14:30 USD Core CPI m/m 0.20% 0.30%
18-Jun 14:30 USD Unemployment claims 278k 279k
18-Jun 16:00 USD Philly fed manufacturing index 8.1 6.7

Source:  Economic Calendar, as of 12/06/2015

 

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When and where

Date

Time

Location

Duration

24 June 18:30 Durban 1.5hrs

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Broker consensus

Source: INET BFA, as of 12/06/2015

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