The Week Ahead

16 - 20 February 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

Top gainers

After a guest appearance in last week’s top decliners list, Woolworths has returned to its winning ways, following the release of the company’s interim results. The share price has now returned to and marginally exceeded the all-time highs realised after the trading statement had forewarned of the positive results to come. The “recent” acquisition of Australian retailer, David Jones, has provided a meaningful boost to company turnover, although the material benefit from synergies relating to the acquisition (such as the inclusion of Country Road brands in David Jones outlets) is still to be realised towards the end of the second half of Woolworths’ financial year. Some of the salient features of the company’s interim results include a 55.2% increase in turnover and adjusted headline earnings growth (excludes David Jones acquisition costs) of 29.3%. The return on average equity has reduced in the short term to 30% and the 96.5c interim dividend has been maintained.

Sanlam has continued to gain in the week gone by after Santam (of which Sanlam has a 57% ownership) released a positive trading update. Improved underwriting and the absence of hail related claims (as in the previous year’s Q4) sees Santam now expecting  headline earnings per share, for the year ending 2014, to increase by between 35% and 45% per share.

Anglo American PLC has rebounded in the week despite weaker earnings reported for the full year. Subsidiaries Kumba Iron Ore and Amplats forewarned of the drop in earnings to come, as the company’s themselves reported a decline in earnings (of 29% and 49% respectively) at the beginning of the week. Anglo American Plc did however manage to improve operational efficiencies over the year which helped curb the impact of the dramatic fall in underlying commodity prices, resulting in underlying earnings falling less than what was expected.

Top Decliners

Tigerbrands is this week’s worst performer in the “Blue Chip” category following the release of the company’s first quarter trading statement. Turnover increased by 7% when compared to the prior year’s comparative reporting period. The Dangote Flour Mills operation in Nigeria has provided a drag on revenue growth as improved efficiencies have been offset by the rapid depreciation of the Naira. The Nigerian currency (Naira) has suffered in sympathy with the decline in oil, a key commodity export for the country.

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

Click to view this week's broker consensus



16-Feb Firstrand Ex-Dividend R 3.49
17-Feb Aveng Interim results  
18-Feb City Lodge Hotels  Interim results  
19-Feb DRDGold Interim results  
19-Feb RCL Foods Interim results  
19-Feb Sibanye Gold  Full Year Results  
19-Feb Truworths  Interim Results  
20-Feb Hyprop Interim Results  
20-Feb Northam Platinum Interim results  


Market overview

Local Data

Global commitments to stimulating economic growth have once again been reaffirmed, as the Royal Bank of Australia (RBA) cut lending rates by a further 25 basis points this week and the Peoples Bank of China (PBOC) reduced the reserve requirement ratio in an attempt to boost lending. The move follows the current central bank trend in global markets which is to further ease or maintain accommodative monetary policy, as slowing growth and deflationary fears remain prevalent.

In Europe, the European Central Bank (ECB) announced that it would no longer accept Greek sovereign debt as collateral going forward. The ECB did however follow this up by saying that it would help provide the country’s banks with up to EUR60bn of emergency funding if needed.

In the U.S., non-farm payroll data showed that 257 000 people were added to the payroll in January 2015, while the unemployment rate worsened slightly to 5.7% the participation rate of those actively seeking employment remained low at 62.9%.

International Data

In what has been a quiet week domestically on both the economic and earnings front, our market has been quite buoyant following improved commodity prices and further global monetary easing. The manufacturing Purchasing Managers’ Index (PMI) for January alluded to industrial growth higher than what was expected, with an index reading of 54.20 (est. 50.1). The figure was also ahead of December’s reading of 50.20.

The business confidence index reading for January was slightly better than the previous months reading, coming in at 89.30, although still reflecting a hampered business sentiment. The South African Reserve Bank (SARB) reported net gold and foreign exchange reserves to have dropped to $42.145bn in January from $42.727bn in December 2014.

The week ahead

The new week will see the release of December 2014’s local mining and manufacturing production data in which investors will be hoping to see a move back into growth in both departments from the previous months reported contraction. The South African president is also set to release his state of the nation address on Thursday.

The week will end with further evidence over the health of the European economy as Gross Domestic Product (GDP) data is scheduled for release from Germany, France, Italy and the Eurozone.


17-Feb 11:30 am UK Consumer Price Index (CPI) y/y   0.50%
17-Feb 12:00pm EU German ZEW Economic Sentiment   48.40
18-Feb 10:00am SA Consumer Price Index (CPI) y/y 4.99%


18-Feb 10:00am SA Consumer Price Index (CPI) m/m 0,13% -0.20%
18-Feb 13:00pm SA Retail Trade Sales y/y 2.25% 2.60%
18-Feb 13:00pm SA Retail Trade Sales m/m 0.62% 1.50%
18-Feb 11:30am UK Jobless Claims y/y - 29700.00
18-Feb 03:30pm US Building permits  - 1.03m
18-Feb 09:00pm US FOMC Meeting minutes - -
19-Feb 03:30pm US Weekly Jobless Claims  - 304000
19-Feb 05:00pm US Philly Fed Manufacturing index - 6.30
20-Feb 10:00am EU French Flash Manufacturing PMI  - 49.20
20-Feb 10:30am EU German Flash Manufacturing PMI   - 50.90
20-Feb 11:30am UK  Retail Sales m/m - 0.40%


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When and where





25 February 18:30 Premier Hotel Regent, East London 1.5hrs
26 February 18:30 Radisson Blu, Port Elizabeth  
10 March 18:30 Redlands Hotel, Pietermaritzburg 1.5hrs
11 March 18:30 Southern Sun Elangeni & Maharani, Durban 1.5hrs
1 April 18:30 Southern Sun, Bloemfontein 1.5hrs

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Broker consensus

Source: INET BFA, as of 13/02/2015

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