The Week Ahead

15 August 2014

Our regular look at the news making the headlines, using our market insight information and analysis tools - now with online videos and tutorials.

By Shaun Murison,  Market Analyst

 

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Company announcements

Dividends

Economic catalysts

Market overview

Local Data

The mining sector showed further signs of contraction this week as annualized production in June 2014 decreased by 5.7%. Unsurprisingly, due to the prolonged strike in Rustenburg, Platinum Group Metals (PGMs) showed the largest negative growth rate of -37%. Gold production declined 1.2% in June 2014 extending the 2.1% decline in the preceding month.

While retail sales fell 0.4% from May to June 2014, Motor trade sales were upbeat adding 6.1% year-on-year in June 2014, with the highest annual growth rates recorded for fuel sales and accessories. Wholesale trade sales increased by 3.2% annualized in June 2014.

International Data

In Japan, preliminary Gross Domestic Product (GDP) data showed a 1.7% economic contraction quarter-on-quarter, which although disappointing was in-line with consensus estimates.

In China, industrial production increased by 9% year–on-year, slightly below expectations of 9.1% as well as the previous months reading of 9.2%.In Europe, preliminary GDP data showed minor economic contraction of 0.2% quarter-on-quarter (q/q) for Germany and 0% GDP growth q/q for France.  

In the UK, 33 600 less people claimed unemployment benefits last month, although the average earnings index showed a 0.2% decline in pay. The second estimate of quarter-on-quarter GDP data was in-line with the preliminary GDP figure reported last week at 0.8%.

In the US, month-on-month retail sales and core retail sales were lackluster reported at 0.1% and 0% respectively. Weekly unemployment claims indicated that 311 000 individuals filed for unemployment benefits for the first time last week, 21 000 more claims than the preceding week and 4 000 more than analyst had expected.

Source: IG Insight, as of  15/08/2014

Top movers

Source: IG Insight, as of 15/08/2014

Sanlam finds prominence on the top gainers list this week after Santam (of which Sanlam has a 60% effective interest) released a trading statement in which it expects Headline Earnings Per Share (HEPS) growth of between 115% and 125% for the interim period. Sanlam has since also released a trading statement, with guidance issued that the company expects HEPS to be between 25% and 30% higher.

Standard Bank finds its share price under pressure following the release of its interim results. Headline earnings growth was marginal at 2% impacted by discontinued global operations outside of Africa and lackluster growth in the Corporate and Investment Business unit.

A sharp decline in dollar denominated gold at the latter part of the week, following optimism on peace talks between Russia and the Ukraine as well as an appreciating rand sees gold counters under pressure. AngloGold issued an operational update in which a 17% increase in production year-on-year and normalised adjusted headline earnings were $78 million.

Impala Platinum issued a trading statement late in the week where a 70% to 75% decline in HEPS for the financial year ending June 2014 is expected. The five month strike within the platinum sector has been cited as the main reason for the anticipated earnings decline.

Kumba Iron Ore’s initial decline this week follows the company going ex-dividend. The dividend offering was R15.51 per ordinary share, although the share has declined by a greater margin.

Earnings focus

Standard Bank releases their interim results on Thursday, after which the share price has been under pressure. Read more on Standard Bank post-results.

BHP Billiton is set to release their full-year results on Tuesday, 19 August. The full-year results are driven by what the company deems as its ‘Four Pillars’, see the full analysis on BHP before the results announcement.

Source: Bloomberg

Broker consensus

Brokers view on the markets.

Click to view this week's broker consensus

 

 

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Future seminars

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When and where

Date

Time

Location

Duration

27 August 2014

18.30 Durban Country Club, Durban 1.5hrs

17 Septemebr 2014

18.30 Protea Hotel, Stellenbosch 1.5hrs
18 September 2014 18:30 The Westin, Cape Town 1.5hrs

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Broker consensus

Source: INET BFA, as of 15/08/2014

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