The Week Ahead

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

 

Shares overview

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).

Top Gainers

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.

Top decliners

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.

Source: Market Insight, as of 16/10/2015

Date Company Event Amount
19-Oct Choppies Enterprise Ltd Ex-Dividend BWP 0.04877
19-Oct Comair Ltd Ex-Dividend R0.1
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 weekly Broker Consensus of the top traded shares.

Click to view this week's broker consensus

Market overview

Economic Data

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.

Date Time Region Event Previous
19-Oct 04:00 CNY GDP q/y 7.00%
19-Oct 04:00 CNY Industrial production y/y 6.10%
20-Oct 14:30 USD Building permits 1.17m
21-Oct 10:00 SA CPI m/m 0%
21-Oct 10:00 SA CPI y/y 4.60%
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 -
22-Oct 14:30 USD Unemployment claims 255K
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

 

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Last week's report

A reminder of the key company news announced last week.

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Broker consensus

Source: iNet BFA, as of 16/10/2015

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