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
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Source: iNet BFA, as of 16/10/2015