18 - 22 May 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
High momentum stocks have found renewed favour after threatening to reverse their bullish course just last week.
Mondi Plc witnessed a meteoric rise to all-time high territory following the release of Q1 2015 results. Operating profit over the period increased by 29% vs the previous year’s comparative quarter as favourable currency movements, lower oil prices, acquisitive growth and improved sales volumes benefitted the Group’s earnings figures. The Mondi Group also had its credit rating upgraded by the Standards & Poor’s Ratings agency at the beginning of the week and has now been included in both the Morgan Stanley Capital International (MSCI) Global and UK indices.
Aspen Pharmacare is rebounding following its recent GlaxoSmithKline induced fall following two sets of news relating to a disposal and possible acquisition. Aspen announced that it is selling (subject to regulatory approval) its portfolio of branded and generic injectables to Litha Pharmacare for R1.6bn in an attempt to simplify and focus core operations. The company has also announced that it is in talks to buy baby-food business to add to the nutritional unit.
The healthcare sector has had a torrid week on the back of a lacklustre results release from Life Healthcare and worse than expected trading statement from Mediclinic International. Life Healthcare interim results showed group revenue to have increased 14.1% and normalised EBITDA by 10.8% although headline earnings per share decreased by 2.9%. Mediclinic International guided that, excluding once off items, the company expects basic normalised headline earnings per share to be 8% and 10% for the year ending March 2015. Sector peer Netcare is set to report interim results on the 18 May 2015.
|18-May||Vodacom Group Ltd||Full-year results||n/a|
|18-May||Barloworld Ltd||Interim results||n/a|
|18-May||Netcare Ltd||Interim results||n/a|
|18-May||Pioneer Foods Ltd||Interim results||n/a|
|18-May||Astral Foods Ltd||Interim results||n/a|
|18-May||KAP Industrial Holdings Ltd||Full-year results||n/a|
|19-May||Coronation Fund Managers Ltd||Interim results||n/a|
|19-May||PPC Ltd||Interim results||n/a|
|19-May||Famous Brands Ltd||Full-year results||n/a|
|19-May||Reunert Ltd||Interim results||n/a|
|19-May||Reinet Investments SCA||Full-year results||n/a|
|19-May||Stefanutti Stocks Holdings Ltd||Full-year||n/a|
|20-May||Tiger Brands Ltd||Interim results||n/a|
|20-May||Spar Group||Interim results||n/a|
|21-May||Mediclinic International Ltd||Full-year results||n/a|
|21-May||Investec Ltd||Full-year results||n/a|
|21-May||Investec PLC (SA)||Full-year results||n/a|
|21-May||Village Main Reef Ltd||Q3 results||n/a|
|22-May||Cie Financiere Richemont (SA)||Full-year results||n/a|
|22-May||Tsogo Sun Holdings Ltd||Full-year results||n/a|
|22-May||Hosken Consolidated Investments Ltd||Full-year results||n/a|
Source: Economic Calendar, as of 15/05/2015
Mining production increased by 18.8% year-on-year in March 2015. The highest positive growth rates were recorded for Platinum Group Metals (132.2%), manganese ore (17.3%) and nickel (15,0%). The main contributors to the 18.8% increase were Platinum Group Metals (contributing 13.1 percentage points), coal (contributing 2.5 percentage points) and manganese ore (contributing 1.0 percentage point). The Platinum Group Metals production surge is however against the backdrop of major producers being in the heart of prolonged strike activity for corresponding period (March 2014).
Manufacturing production was relatively upbeat having increased by 3.8% in March 2015 vs March 2014. Higher production in the following divisions were largely attributable to the improved figure:
The week gone by has been relatively light in terms of economic data when compared to the week, which preceded, although still producing a few significant high impact catalysts.
In the U.S., most of the high impact data released fell short of expectation, fueling sentiment that rates might remain at current lows for longer than initially anticipated. The dollar has weakened as a result and in turn, commodity prices have continued to gain. Retail sales data showed 0% growth m/m, while core retail sales data added 0.1% m/m. Producer Price Index (PPI) data showed deflation of 0.4% at a factory level.
In Europe, preliminary Gross Domestic Product (GDP) data from France, Germany and Italy showed marginal q/q economic growth of 0.6%, 0.3% and 0.3% respectively. The Flash GDP figure for Eurozone was reported at 0.4% q/q, slightly short of the mean of consensus estimates at 0.5% q/q. Greece managed to narrowly avoid default on the Country’s debt payment obligations to the International Monetary Fund (IMF), ironically by accessing the funds from the IMF’s “special drawing rights” fund held by the Bank of Greece.
The week ahead
The new week will see the usual monthly run of trade sales data in the retail, wholesale and motor departments as well as Consumer Price Index (CPI) data on the local economic timetable.
In Europe, we await Flash manufacturing and services PMI data with perhaps the largest focus being on the two biggest Eurozone economies Germany and France. ECB president Mario Draghi’s public address on Thursday evening will also be closely monitored.
In the U.S. CPI and Core CPI data at the end of the week will be of particular importance in light of the Federal Reserve’s assessment of inflation being one of the key indicators relative to when monetary tightening may commence.
|19-May||11:00||EUR||German ZEW economic sentiment||53.3|
|20-May||10:30||UK||MPC official bank rate votes||0-0-9|
|20-May||20:00||US||FOMC meeting minutes||n/a|
|20-May||11:30||SA||CPI April 2015 m/m||1.40%|
|20-May||11:30||SA||CPI April 2015 y/y||4%|
|20-May||13:00||SA||Retail trade sales March 2015||4.20%|
|21-May||03:45||CNY||HSBC flash manufacturing PMI||48.9|
|21-May||09:00||EUR||French flash manufacturing PMI||48|
|21-May||09:30||EUR||German flash manufacturing PMI||52.1|
|21-May||10:30||UK||Retail sales m/m||-0.50%|
|21-May||16:00||US||Philly Fed manufacturing index||7.5|
|21-May||19:30||EUR||ECB President Draghi speaks||n/a|
|21-May||10:00||SA||Wholesale trade sales March 2015||-0.40%|
|21-May||11:30||SA||Motor trade sales March 2015||0.60%|
|22-May||10:00||EUR||ECB President Draghi speaks||n/a|
|22-May||10:00||EUR||German IFO business climate||108.6|
|22-May||13:00||UK||BOE Gov Carney speaks||n/a|
|22-May||14:30||US||Core CPI m/m||0.20%|
|22-May||15:30||EUR||ECB President Draghi speaks||n/a|
|22-May||15:30||UK||BOE Gov Carney speaks||n/a|
Source: Economic Calendar, as of 15/05/2015
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Source: INET BFA, as of 15/05/2015