16 - 20 March 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
The extent of gains is dwarfed by the extent of losses in what has been a largely negative trading week. Financial counters remain the sector in favour with a relative outperformance against both the Industrial and Resource sectors.
On the earnings front, Firstrand released interim results in which normalised earnings were reported to have increased by 15% against the prior year’s six month comparative. Net Interest Income (NII) for the period increased by 16% y/y while Non-Interest Revenue (NIR) grew by 11% y/y and the company achieved a 24% Return on Equity (ROE).
RMB Holdings (34% invested interest in Firstrand) also saw normalised earnings growth of 15% with the company’s intrinsic value up 42% over the period. A dividend of 122c per share was declared, 22% higher than the comparative period.
The decliners list bears an uncanny resemblance to that of last week as resource counters remain out of favour as a strengthening dollar pushes the underlying commodity prices lower. The dollar has strengthened significantly following the upbeat jobs report, which prompted the belief that rising lending rates in the largest economy in the world may be realised sooner than initially thought.
Aspen Pharmacare is the anomaly in the decliners list falling significantly at the tail end of the week after news broke that GlaxoSmithKline had sold half of its 12.4% stake in the company, through an accelerated book build, at a price of R372 a share.
|16-Mar||Anglo American Plc||Ex-Dividend||$ 0.59|
|16-Mar||Comair Ltd||Ex-Dividend||R 0.05|
|16-Mar||Sibanye Gold Ltd||Ex-Dividend||R 0.62|
|16-Mar||British American Tobacco Plc||Ex-Dividend||
|16-Mar||Capitec Bank Holdings Ltd||Ex-Dividend||R 3.82|
|16-Mar||Discovery Ltd||Ex-Dividend||R 0.85|
|16-Mar||Grindrod Ltd||Ex-Dividend||R 0.20|
|16-Mar||Hulamin Ltd||Ex-Dividend||R 0.25|
|16-Mar||Massmart Holdings Ltd||Ex-Dividend||R 2.75|
|16-Mar||African Rainbow Minerals Ltd||Interim results||N/A|
|16-Mar||Remgro Ltd||Interim results||N/A|
|18-Mar||EVRAZ Highveld Steel||FY results||N/A|
|20-Mar||Argent Industrial Ltd||Cum-Dividend||R 0.08|
|20-Mar||Firstrand Ltd||Cum-Dividend||R 0.96|
|20-Mar||Growthpoint Properties Ltd||Cum-Dividend||R 0.84|
|20-Mar||Imperial Holdings Ltd||Cum-Dividend||R 3.50|
|20-Mar||MMI Holdings Ltd||Cum-Dividend||R 0.63|
|20-Mar||Merafe Resources Ltd||Cum-Dividend||R 0.01|
|20-Mar||RMB Holdings Ltd||Cum-Dividend||R 1.22|
|20-Mar||RMI Holdings Ltd||Cum-Dividend||R 0.52|
|20-Mar||Sabvest Ltd||Cum-Dividend||R 0.25|
|20-Mar||Santam Ltd||Cum-Dividend||R 4.80|
|20-Mar||Sun International Ltd||Cum-Dividend||R 1.10|
|20-Mar||Spur Corporation Ltd||Cum-Dividend||R 0.62|
Source: Economic Calendar, as of 13/03/2015
Further contraction in the mining and manufacturing was revealed for January as Statssa released production and sales data thereof. The news further exacerbated weakness in the rand initially catalysed by a significantly stronger dollar.
Mining production decreased by 4.7% year-on-year in January 2015. The largest negative growth rates were recorded for gold (-27.5%), ‘other’ metallic minerals (-18.1%) and nickel (-17.1%). The main contributors to the 4.7% decrease were gold (contributing -4.3 percentage points) and PGMs (contributing -2.3 percentage points). Iron ore was a significant positive contributor (contributing 1.8 percentage points).
Manufacturing production decreased by 2.3% in January 2015 compared with January 2014.
The 2.3% year-on-year decrease in manufacturing production in January 2015 was mainly due to lower production in the following divisions:
China posted another record trade surplus of $60.6bn in February 2015 as exports grew 48.3% y/y while the value of imports fell 20%. The strong increase in exports is said to be due to companies increasing orders ahead of Chinese New Year festivities. Industrial production data (y/y) showed growth of 6.8% far short of expectation for growth in the region of 7.7%. CPI data showed inflation to be at 1.4% y/y, while PPI data showed deflation at a factory level of 4.8% y/y.
In the U.S., weak m/m core retail sales (-0.1%) and retail Sales (-0.6%) data were released on Thursday, followed by PPI and Core PPI data released on Friday which showed m/m deflation of 0.5%. The aforementioned data points provided some hope for the delay of rising of interest rates in the U.S. and ironically equated to more positive equity markets later on in the week.
The week ahead
The new week will see local trade sales data for January relating to the retail, wholesale and motor trade industries. No less than nine locally listed companies will adjust for dividends on Monday including heavyweight counters British American Tobacco and Anglo American Plc.
Wednesdays Federal Open Market Committee (FOMC) rate announcement and statement to follow, out of the U.S., will be high priority events for market participants as we look for further evidence relating to the monetary policy timeline in the world’s largest economy.
|17-Mar||12:00||EUR||German economic sentiment (ZEW)||53|
|18-Mar||10:00||SA||Consumer Price Index, Feb 2015||4.40%|
|18-Mar||11:30||UK||Claimant count change m/m||-38600|
|18-Mar||13:00||SA||Retail trade sales, Jan 2015||3.40%|
|18-Mar||14:30||UK||Annual budget release||-|
|18-Mar||20:00||US||FOMC funds rate and statement||-|
|19-Mar||10:00||SA||Wholesale trade sales, Jan 2015||-2.60%|
|19-Mar||11:30||SA||Motor trade sales, Jan 2015||3.50%|
|19-Mar||14:30||US||Unemployment claims weekly||289000|
|19-Mar||16:00||US||Philly fed manufacturing index||5.2|
Source: Economic Calendar, as of 13/03/2015
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Source: INET BFA, as of 13/03/2015