The Week Ahead

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

 

Shares overview

Source: IG Insight, as of 15/05/2015

Top gainers

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.

Naspers followed a rise in its Chinese internet giant counterpart Tencent Holdings which reported a 22% increase in revenue and a 7% increase in net income for the quarter ending March 2015. 

Top Decliners

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.

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

Click to view this week's broker consensus

 

 

Date Company Event Amount
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 Datacentrix Ex-Dividend R0.09
18-May Phumelela Gaming Ex-Dividend R0.28
18-May Redefine International Ex-Dividend £0.0016
18-May Spanjaard Ltd Ex-Dividend R0.18
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

 

Market overview

Local Data

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:

  • Food and beverages (8,2% and contributing 1.9 percentage points)
  • Petroleum, chemical products, rubber and plastic products (5.5% and contributing 1.2 percentage points); and
  • Motor vehicles, parts and accessories and other transport equipment (13.3% and contributing 1.0 percentage point)

International Data

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.

Date Time Region Event Previous
19-May 10:00 UK CPI y/y 0.00%
19-May 11:00 EUR German ZEW economic sentiment 53.3
19-May 14:30 US Building permits 1.04m
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 14:30 US Unemployment claims 264000
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 CPI m/m 0.20%
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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Broker consensus

Source: INET BFA, as of 15/05/2015

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