The Week Ahead

22 - 26 June 2015

A regular 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

Market volatility has been elevated in the shortened trading week gone by, as U.S. rate and inflation data battled it out with Greek negotiations in terms of most significant market catalysts in play. Volumes were elevated as well but largely as a result of this quarter’s futures close out which occurred on Thursday.

Top gainers

Janet Yellen’s comments, at the Federal Open Market Committee (FOMC) meeting, assumed a dovish tone which equated to a weaker dollar and in turn an inflation hedge attraction to dollar denominated gold. The uncertainty in Europe about the state of the Eurozone’s future constituents encouraged further save haven buying of the precious metal and as a result, AngloGold Ashanti, the last gold miner amongst the top 40 “blue chip” counters takes top honour on the gainers list.

Top decliners

In a reversal of the fortunes evident over the last few weeks, Kumba Iron Ore has returned to the top decliners spot after hosting the top gainers spot previously. Three consecutive weeks of share price gains are now followed by a share price decline of around ten percent following news that Chinese steelmakers are furthering production cuts thereby reducing the demand for iron ore, the key ingredient in manufacturing steel.

The close of the current trading week also sees the reweighting of the top 40 index. Capitec, Brait Se and MMI Holdings are set to replace Impala Platinum, Life HealthCare and Imperial Holdings within the blue chip index.

Source: IG Insight, as of 19/06/2015

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

Click to view this week's broker consensus

 

 

Date Company Event Amount
22-Jun Brait SE Ex-Dividend €0.36
22-Jun CSG holdings Ltd Ex-Dividend R0.04
22-Jun Tiger Brands Ltd Ex-Dividend R3.39
22-Jun Trans Hex Group Ltd Ex-Dividend R0.10
23-Jun Omnia Holdings Full-year results n/a
26-Jun Central Rand Gold Full-year results n/a

Source: Economic Calendar, as of 19/06/2015

 

Market overview

Local Data

The headline CPI (for all urban areas) annual inflation rate in May 2015 was 4.6%. This rate was 0.1 of a percentage point higher than the corresponding annual rate of 4.5% in April 2015. On average, prices increased by 0.3% between April 2015 and May 2015.

Measured in real terms (constant 2012 prices), retail trade sales increased by 3.4% year-on-year in April 2015. The main contributors to the 3.4% increase were general dealers (contributing 1.3 percentage points) and retailers in textiles, clothing, footwear and leather goods (contributing 0.7 of a percentage point).

Measured in real terms (constant 2012 prices), wholesale trade sales decreased by 6.3% year-on-year in April 2015.

Measured in nominal terms (current prices), motor trade sales decreased by 2.1% year-on-year in April 2015. Negative annual growth rates were recorded for fuel sales (-9.8%), new vehicle sales (-3.0%) and workshop income (-0.9%).

Motor trade sales increased by 1.6% in the three months ended April 2015 compared with the three months ended April 2014. The main contributors to this increase were:

  • Used vehicle sales (11.9% and contributing 2.0 percentage points); and
  • Sales of accessories (11.9% and contributing 2.0 percentage points)

International Data

The Greek search for aid continued to unnerve markets this week after talks with the International Monetary Fund (IMF) broke down on Sunday. Attention was then diverted to the Eurogroup meetings on Thursday in another “last ditch” effort for Greece to secure bailout funding which was to yield no result and in turn, more than EUR1bn was withdrawn from Greek banks on the day.  As a result, the European Central Bank called an emergency meeting to discuss an increase in liquidity to Greek banks. Greece needs to pay EUR1.6bn in bundled payments (deferred and current) by the 30 June 2015.

The U.S. provided an equal amount of volatility to the marketplace as we awaited statements relating to monetary policy at the Federal Open Market Committee (FOMC) meeting. At the meeting, The Federal Reserve Bank left lending rates unchanged whilst reassuring market participants that future rate rises would be gradual and data dependent. A key indicator for the Federal Reserve is the Consumer Price Index (CPI) data, which showed inflation in the U.S. to be at 0.4% (est. 0.5%) m/m.

The week ahead

The new week will see a continued focus on Greece trying to find common ground with the Troika in lure of the impending liquidity crunch and possible default to follow. On Tuesday, Flash manufacturing PMI data is scheduled for release out of China, France and Germany as well as the combined Eurozone. Wednesday will see the release of the Final GDP estimate out of the U.S.

Back at home, current account data is scheduled for Tuesday while Producer Price Index (PPI) data is scheduled for Thursday.  

Date Time Region Event Estimation Previous
22-Jun 16:00 USD Existing home sales 5.29m 5.04m
23-Jun 03:45 CNY HSBC flash manufacturing PMI 49.9 49.2
232-Jun 09:00 EUR French flash manufacturing PMI 50.1 49.4
23-Jun 09:30 EUR German flash manufacturing PMI 51.5 51.1
23-Jun 14:00 USD FOMC member Powell speaks - -
23-Jun 14:30 USD Core durable goods orders m/m 0.6% -0.20%
24-Jun 10:00 EUR German Ifo  business climate 108.2 108.2
24-Jun 14:30 USD Final GDP q/q -0.2% -0.70%
25-Jun 14:30 USD Unemployment claims 271k 267000

Source: Economic Calendar, as of 19/06/2015

 

In-person seminars

Attend one of our free Trading strategy and Market update seminars, and with the help of our experts refine your trading strategy.

When and where

Date

Time

Location

Duration

24 June 18:30 Durban 1.5hrs

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Broker consensus

Source: INET BFA, as of 19/06/2015

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