16 - 23 October 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
Amidst a relative scarceness in terms of economic catalysts, equity markets have seen muted trade result in marginal moves on our local bourse (for the most part).
SABMiller Plc traded to new all-time high territory after the company agreed in principle to a bid of £44 per share from Anheuser-Busch Inbev. AB InBev would has agreed to a “best efforts" commitment in obtaining any regulatory clearances required to proceed with the closing of the transaction. In addition, AB InBev will implement a reverse break-fee of $3 billion payable to SABMiller, in the event that the transaction fails to close as a result of the regulatory clearances, or approval from AB InBev shareholders.
A 4% decline in the price of brent crude as well as a 2% strengthening of the rand against the U.S. dollar, sees Sasol on the decliner this week as it offsets some of the last week’s gains. Compagnie Financiere Richemont (Richemont) has started to correct from short-term highs in the week gone by, a move catalysed in sympathy with British luxury group Burberry.
Burberry results fell short of analyst estimates impacted by slowing demand in China and Hong Kong. The Asia-Pacific region is Richemont’s largest market, with Hong Kong and China at the epi-centre. A more than 20% (in dollar terms) slowing of Chinese imports, reported for September, would have further hampered sentiment relating to Richemont, perhaps providing some excuse for profit taking in the share.
|19-Oct||Choppies Enterprise Ltd||Ex-Dividend||BWP 0.04877|
|19-Oct||Capitec Bank Holdings Ltd||Ex-Dividend||R3.75|
|19-Oct||Intu Properties Plc||Ex-Dividend||£0.046|
|19-Oct||RCL Foods Ltd||Ex-Dividend||R0.22|
|21-Oct||BHP Billiton Plc||Q3 operational review||n/a|
|22-Oct||Clicks Group Ltd||Full year 2015 results||n/a|
|23-Oct||DRDGold Ltd||Q1 2016 results||n/a|
Source: Economic Calendar, as of 16/10/2015
A relatively light week in terms of economic data sees equity markets start to consolidate from the recent rally experienced.
Chinese trade balance data (in dollar terms) showed a 20.4% y/y decline in the value of imports, while the value of exports fell 3.7%, resulting in a trade surplus of $60.3bn. The figure reiterates slowing global demand, although an unexpected explosion at the northern port of Tianjin and factory closures ahead of the military parades in Beijing, would have adversely affected the level of trade in September. Although the value of goods imported declined sharply, the volumes of imports for commodities such as iron ore and oil was relatively unchanged y/y.
In the U.S. CPI inflation data, retail sales and Philadelphia Fed manufacturing data all came in worse than the consensus of estimates had predicted. The data points follow on from dovish Fed minutes and weaker than expected non-farm employment in previous weeks, which have fuelled speculation that the Federal Reserve Bank may leave rates unchanged until at least the first quarter of 2016.
The Week Ahead
Our local bourse will open on Monday to digest Q3 Gross Domestic Product (GDP) data out of China, which would have been released just a few hours earlier. With a sequential realisation of weakening manufacturing m/m and trade balance data y/y, the expectation is for the GDP figure to slip below the country’s 7% growth target (EST 6.7%).
Markets will also keep an eye on Thursday’s European central Bank (ECB) rate decision and press conference to follow, for news relating to further monetary easing.
At home, CPI and retail trade sales data is scheduled for release on Wednesday, while wholesale and motor trade sales data is expected on Thursday.
|19-Oct||04:00||CNY||Industrial production y/y||6.10%|
|21-Oct||13:00||SA||Retail trade sales, August 2015||-|
|22-Oct||10:30||GDP||Retail sales m/m||0.20%|
|22-Oct||10:00||SA||Wholesale trade sales, August 2015||-|
|22-Oct||11:30||SA||Motor trade sales, August 2015||-|
|22-Oct||13:45||EUR||Minimum bid rate||0.05%|
|22-Oct||14:30||EUR||ECB press conference||-|
|23-Oct||09:00||EUR||French flash manufacturing PMI||50.6|
|23-Oct||09:30||EUR||German flash manufacturing PMI||52.|
Source: Economic Calendar, as of 16/10/2015
Attend one of our free Trading strategy and Market update seminars, and with the help of our experts refine your trading strategy.
|20-Oct||18:30||Stellenbosch, Protea Hotel Techno Park||Register here|
|21-Oct||18:30||Cape Town, The One & Only||Register here|
|18-Nov||18:30||Johannesburg, IG offices||Register here|
|19-Nov||18:30||Pretoria, Centurion Country Club||Register here|
IG provides an execution-only service. The material on this website does not contain (and should not be construed as containing) investment advice or an investment recommendation, or a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of the above information. Consequently any person acting on it does so entirely at his or her own risk. The research does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. This communication must not be reproduced or further distributed. The price levels provided are derived from ProRealtime Charts (IT-Finance)
Source: iNet BFA, as of 16/10/2015
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.