The Week Ahead

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


Shares overview

Source: IG Insight, as of 13/03/2015

Top gainers

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.

Top Decliners

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.

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

Click to view this week's broker consensus



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

£ 1.12

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 Cashbuild Cum-Dividend R 3.76
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


Market overview

Local Data

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:

  • Radio, television and communication apparatus and professional equipment (-27.9% and contributing -0.5 of a percentage point);
  • Food and beverages (-1.8% and contributing -0.5 of a percentage point);
  • Glass and non-metallic mineral products (-9.8% and contributing  0.4 of a percentage point); and
  • Petroleum, chemical products, rubber and plastic products (-1.6% and contributing -0.4 of a percentage point

International Data

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. 

Date Time Region Event Previous
17-Mar 12:00 EUR German economic sentiment (ZEW) 53
17-Mar 14:30 UK Building permits 1.05m
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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Broker consensus

Source: INET BFA, as of 13/03/2015

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