The Week Ahead

20 - 24 July 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

Global markets have been relatively upbeat over the last week as Greece and its creditors look to have reached accord from the last six months of negotiations while the economic growth reported out of China exceeded expectations.

Top decliners

Anglo American Platinum Ltd guided through an updated trading statement that it expects headline earnings per share to have increased by a massive 1461% to 1480% against the previous half-year’s reporting period in 2014. While increased operational efficiency has aided the much-improved results expected, prolonged industrial action (from South Africa’s historic 5 month long Rustenburg platinum belt strike) provides a low base of comparison and the most significant catalyst to the improved figures to be released. The company is set to report interim results on Monday the 20th of July.

Brait SE completes its fourth week in the top gainers list as a positive results release, some favourable acquisitions and recent inclusion into the top 40 index have added to the bullish sentiment around the share. In the week gone by, the 80% acquisition of Virgin Active was completed by Brait and will be funded in cash (R13.4bn).

Top gainer

The decliners list is relatively sparse this week. AngloGold Ashanti, the last remaining gold counter in the top 40 index, has fallen, as has the underlying price of the precious yellow commodity. A nearing resolve to the Greek crisis has reduced safe haven appeal, while Janet Yellen’s reassertion that U.S. interest rates are likely to rise this year has renewed dollar strength and in turn commodity price weakness.

Shoprite released an operational update in which the company guided that total turnover for the group is expected to have increased by 11.2%.  The South African supermarket division grew sales by 10.5%, while sales from supermarkets outside of South Africa grew 13.5% (in rand terms). The furniture division grew turnover by 13%.

Source: IG Insight, as of 17/07/2015

Date Company Event
20-Jul Anglo American Platinum Ltd Interim results
21-Jul Kumba Iron Ore Ltd Interim results
22-Jul BHP Billiton Trading statement
23-Jul SABMiller Plc Trading statement
24-Jul Anglo American Plc Interim results

Source: Economic Calendar, as of 17/07/2015

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

Click to view this week's broker consensus

Market overview

International

In Europe, the Greek crisis looks to be nearing short-term resolve as policy makers finally announced a bailout deal on Monday following seventeen hours of negotiations. Now it is up to a number of Eurozone parliaments to approve the deal. The European Central bank (ECB) has now increased the amount of emergency funding available to Greek banks and in-turn the banks will gradually start removing the capital control measures, which are currently in, place.

In China, trade balance data showed a 2.1% increase in exports while imports declines by 6.7% equating to a trade surplus for the region of $46.5bn. Chinese Gross Domestic Product (GDP) data came in ahead of consensus, showing growth 0f 7% q/y.

In the U.S., Federal Reserve Chairperson, Janet Yellen, reiterated the point that lending rates would likely be increased during the course of the current year. The dollar has further strengthened following the news pushing commodity prices lower during the week.

Local

Measured in real terms (constant 2012 prices), retail trade sales increased by 2.4% year-on-year in May 2015. The main contributors to the 2.4% increase were general dealers and retailers in hardware, paint and glass.

Measured in real terms (constant 2012 prices), wholesale trade sales decreased by 0.8% year-on-year in May 2015. Seasonally adjusted wholesale trade sales increased by 3.6% in May 2015 compared with April 2015.

Measured in nominal terms (current prices), motor trade sales decreased by 0.8% year-on-year in May 2015. The only negative annual growth rate was recorded for fuel sales (-7.4%).

The Week Ahead

The new trading week finds itself relatively light in terms of macro-economic data scheduled. Markets will continue to monitor the outcomes of parliamentary votes relating to the Greek bailout deal in Europe and look to the third week of U.S. corporate earnings schedule for directional catalysts.

In South Africa, all eyes will be on the outcome of the Reserve Bank’s policy meeting on Thursday where the expectation is for a 0.25% increase in local lending rates.

Date Time Region Event Previous
22-Jul 10:00 SA CPI June 2015 4.60%
22-Jul 10:30 GBP MPC official bank rate votes 0-0-9
23-Jul 10:30 GBP Retail sales m/m 0.20%
23-Jul 14:30 USD Unemployment claims 281K
23-Jul 15:00 SA SARB rates decision Unchanged
24-Jul 15:45 CNY Markit flash manufacturing PMI 49.4
24-Jul 09:00 EUR French flash manufacturing PMI 50.7
24-Jul 09:30 EUR German flash manufacturing PMI 51.9

Source: Economic Calendar, as of 17/07/2015

 

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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 17/07/2015

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