15 - 19 December 2014
Our regular look at the news making the headlines, using our market insight information and analysis tools - now with online videos and tutorials.
By Shaun Murison, Market Analyst
South Africa’s current account deficit narrowed to R230 billion in the third quarter of 2014 and now amounts to 6% of Gross Domestic Product (GDP). Mining production decreased by 1.1% y/y in October 2014 with the largest negative growth rates recorded for Platinum Group metals (PGMs) of -20.5%, followed by copper which contracted by 10.8%.
Manufacturing production increased by 2.2% in October 2014 y/y, which although better than the mining figures were still lacklustre. Motor vehicles, parts and accessories and other transport equipment provided the main positive contribution to the figure. Inflation remained within the reserve banks targeted band, with CPI data coming in at 5.8% in November 2014, a further 0.1% improvement from the previous months figure.
Retail trade sales (at constant 2012 prices) increased by 3.4% y/y in October 2014, with the highest annual growth rate recorded for food, beverages and tobacco in specialised stores (6.6%).
Motor trade sales increased by 4.9% y/y in October 2014 with the highest annual growth rate being recorded for convenience store sales and sales of accessories. Wholesale trade sales (at constant 2012 prices) decreased by 2.4% y/y in October 2014.
In China, trade balance data for November 2014 was reported at a record surplus as falling commodity prices (oil and iron ore in particular) reduced the costs of imports. Inflation within the region was reported at 1.4% and industrial production growth slowed to 7.2% from 7.7% reported in the preceding month.
In the U.K., manufacturing production m/m showed 0.7% negative growth, well below consensus estimates (0.2%) as well as the previous months figure (0.6%). Trade balance data was more or less in line with estimates reported at a deficit of GBP9.6 billion.
In the U.S., core retail and retail sales m/m were upbeat showing growth of 0.5% and 0.7% respectively. Weekly unemployment claims showed 294 000 new people filed for unemployment related benefits in the previous week.
A near desolate gainers list highlights what has been a difficult trading week for bulls, as the market continues to correct amidst slowing growth and deflationary fears.
Mediclinic has managed to squeeze out a marginal gain over the week in the absence of any new news. The company did however recently (1 December 2014) announce a secondary listing on the Namibian Stock Exchange.
The top decliners list is once again predominantly filled with the usual resource suspects, as a slowing Chinese economy maintains demand concerns and bearish sentiment around the sector.
Impala Platinum has had a news dominated week, with initial weakness catalysed by the release of guidance that the company expected at least a 20% drop in headline earnings in the interim period. Impala also announced that its subsidiary Zimplats could take up to three years to restart their Bimha operation which was closed in August this year. Implats has also concluded an employee equity transaction with the aim of aligning employee interests with the business.
Assore Limited’s continual decline this year (along with Exxaro) will be removed from the Top40 and Swix40 indices and find a new home in the Mid Cap index, after losing significant market capitalisation this year. Insurance holding company, RMI Holdings and private hospital group Netcare, are set to replace these shares within the Top40 and Swix40 indices which reweights on Friday the 19th December 2014.
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Source: INET BFA, as of 12/12/2014