16 - 20 November 2015
A 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
In the aftermath of strong U.S. jobs data, monetary tightening in the world’s largest economy (before year end) has once again become the probability favoured by the majority of analysts surveyed by Bloomberg. Weaker commodity pricing has been the most obvious misfortune realised, sending local resource counters to levels of depression not realised in many years and in some cases ever before (i.e. Kumba Iron Ore). Losses, although led by resource counters have been broad-based with industrial and financial counters largely weaker as well.
Anglo American Plc has been at the forefront of the decline. While its iron ore subsidiary, Kumba, suffers share price weakness, as an excess of supply (of the steel making ingredient) meets waning demand, the company’s platinum subsidiary, Anglo American Platinum, suffers in lieu of the underlying metal’s price now entrenched at multi-year lows ($875/oz.). Anglo American Plc draws further investor concern, as the company’s elevated levels of debt, look set to accompany a further decline in earnings, while there no plans being communicated to the market, to address the current situation.
The Boards of Anheuser-Busch InBev SA/NV and SABMiller Plc announced that they have reached agreement on the terms of an acquisition of the entire issued and to be issued share capital of SABMiller by AB InBev.
The company also released H1 2016 results in which the following salient features were highlighted:
|16-Nov||Barloworld||FY 2015 results|
|16-Nov||Telkom SA||H1 2016 results|
|16-Nov||Shoprite Holdings||H1 2016 results|
|17-Nov||PPC Ltd||FY 2015 results|
|17-Nov||Brait SE||H1 2016 results|
|18-Nov||Mr Price Group||H1 2016 results|
|19-Nov||Gold Fields||Q3 results|
|19-Nov||Tiger Brands||FY 2015 results|
|19-Nov||Investec Ltd||H1 2016 results|
|19-Nov||Tsogo Sun||FY 2015 results|
Source: Economic Calendar, as of 13/11/2015
Production and sales data released in the last week provided further testament to a weak economic environment, as mining data showed year-on-year contraction within the sector and manufacturing data alluded to lacklustre industry growth.
South African mining production decreased by 4.8% year-on-year in September 2015. The largest negative growth rates were recorded for diamonds (-38.5%), 'other' metallic minerals (-30.1%) and iron ore (-17.9%). The main negative contributors to the 4.8% decrease were iron ore (contributing -3.5 percentage points), coal (contributing -3.4 percentage points) and diamonds (contributing -1.2 percentage points).
Manufacturing production increased by 0.9% in September 2015 compared with September 2014. The largest positive contributions were made by the following divisions:
Industrial production data in China showed growth of 5.6% y/y, which was marginally short of consensus estimates, which had forecast growth of 5.8% y/y. CPI data showed slower than expected inflation at 1.3% y/y (est. 1.5% y/y).
European Central Bank (ECB) president Mario Draghi reiterated that the central bank had a range of tools to address weak core inflation being realized within the euro-area. The suggestion of further stimulus did however fail to please equity markets, which remain under pressure. Preliminary Gross Domestic Product (GDP) data showed the German economy to have grown 0.3% q/q.
In the U.S. Federal Reserve Chairperson, Janet Yellen, provided no further comment relating to the timing of rate hikes in the U.S. in her public address.
The week ahead
The local economic calendar will be busy over the next week, with Consumer Price Index (CPI) data and retail sales data scheduled for Wednesday, while wholesale and motor sales trade data is scheduled for Thursday. Of most importance will be the SARB rates decision, also scheduled for Thursday, where the reserve bank governor will find himself hard placed in his decision, as a weakening rand’s threat to inflation will be balanced against a diminishing outlook for economic growth.
|17-Nov||12:00||EUR||German ZEW economic sentiment||1.9|
|17-Nov||15:30||USD||Core CPI m/m||0.20%|
|18-Nov||09:00||USD||FOMC meeting minutes||-|
|18-Nov||10:00||SA||Retail trade sales September 2015||3.90%|
|19-Nov||10:00||SA||Wholesale trade sales September 2015||-0.10%|
|19-Nov||11:30||SA||Motor trade sales September 2015||-3.30%|
|19-Nov||15:00||SA||SARB rates decision||unchanged|
|19-Nov||11:30||GBP||Retail sales m/m||1.90%|
|19-Nov||17:00||USD||Philly Fed Manufacturing Index||-4.5|
Source: Economic Calendar, as of 13/11/2015
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Source: iNet BFA, as of 13/11/2015