The Week Ahead

23 - 27 February 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

Source: IG Insight, as of 20/02/2015

In the week gone, our local market has been under pressure as evidenced by, the extent of losses far exceeding the extent of gains amongst blue chip counters, for the first time this year.

Top gainers

An initial decline on the share price of Sasol followed renewed weakness in the price of Brent Crude, although the downside traction gained momentum following guidance that Sasol would be amending its progressive dividend policy. The dividend policy change furthers the recent announcement by Sasol to suspend the expensive ethane cracker project in the U.S., as the company reduces short term costs in the current pressured commodity environment.

Assore continues to decline although no news specific to the company was released during the course of week in question. In the previous week however, interim results revealed a significant decline in profits as Headline Earnings Per Share (HEPS) were reported as falling 59.2% against the prior year’s comparative. 

Top Decliners

Imperial Holdings has rebounded sharply from short term lows realised in the preceding week after a voluntary trading statement revealed a soft interim period guiding a 13% to 16% fall in core Earnings per share.

Naspers continues to gain, setting all-time highs within its sights. Although not the sole catalyst for the resumption of its upward trend, the company has announced that it plans to separately list Norvus, a printing subsidiary. Media24 (owned by Naspers) will remain a majority shareholder of the company which produced a turnover of close to R4bn in the last financial year.

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

Click to view this week's broker consensus

 

 

DATE COMPANY EVENT AMOUNT
23-Feb Super Group Interim results  
23-Feb Adcock Ingram Interim results  
23-Feb AngloGold Ashanti FY results  
23-Feb Nedbank Group FY results  
23-Feb Sun International Interim results  
23-Feb Wilson Bayly Holmes-Ovcon Interim results  
24-Feb BHP Billiton Interim results  
24-Feb AECI FY results  
24-Feb Discovery Interim results  
24-Feb Mondi Ltd FY results

 

24-Feb Shoprite Holdings Interim results  
25-Feb Grindrod FY results  
25-Feb Murray & Roberts Interim results  
26-Feb Afrox FY results  
26-Feb Caxton & CTP Intereim results  
26-Feb Impala Platinum Interim results  
26-Feb Liberty Holdings FY results  
26-Feb Massmart Hodlings FY results  
27-Feb Hyprop Investments Ltd Interim results  
27-Feb Assore Cum dividend 300c
27-Feb Gold Fields Cum dividend 20c
27 Feb Hudaco Industries Cum dividend 310c

 

Market overview

International Data

Meetings between European Union and Greek leaders persisted this week as bailout discussions continued to take center stage in terms of global market prevalence. Hope for resolution relating to a new aid package for Greece reached a few stumbling blocks as the current aid provided by the Troika (ECB, EU and IMF) draws closer to an end (February 2015).

A Greek proposal to extend its current loan agreement was blocked by Germany, the country’s largest creditor, in the absence of a clear commitment from Greece to abide by its current credit obligations. Negotiations continue and in turn financial markets, specifically those emerging, trade subdued relative to the strong gains we have witnessed in the preceding weeks.

Local Data

The annual inflation rate, as measured by Consumer Price Index (CPI) data, fell to 4.4% in January 2015, as the decline in the oil price continued to provide relief on the local consumer.

Retail sales, measured in real terms, showed an increase of 3.4% in December 2014, ahead of consensus estimates which had predicted a y/y rise of 2.4%. The highest annual growth rates were recorded for household furniture, appliances and equipment (9.8%) followed by pharmaceuticals and medical goods, cosmetics and toiletries (5.6%).

Actual motor sales estimates (in nominal terms) alluded to an increase of 3.5% in 2014 from the prior year’s comparative. The highest annual growth rates were recorded for fuel sales (6.3%), workshop income (5.9%) and sales of accessories (5.2%). Wholesale trade sales decreased by 2.6% y/y in December 2014.

The Week Ahead

The new week considers a fuller economic calendar than that of the week gone by. In South Africa we await news of fourth quarter GDP on Tuesday, ahead of the budget speech scheduled for Wednesday. As noted by the corporate calendar, more than 20 listed companies are scheduled to release results.

In Europe, the market will be hoping for a favourable outcome to Euro Group meetings relating to the bailout talks between Greece and the EU. The extent of deflation measured through final CPI data on Tuesday will find increased importance, in light of the ECB’s efforts to fuel inflation at present.

Revised fourth quarter GDP data on Friday will end the week with further evidence over the health of the largest economy in the world. Investors will keep a close eye on the data print in lieu of the timeline relating to rising interest rates in the U.S. economy.

 

DATE TIME REGION EVENT EST. PREV.
23-Feb 11:00 EU German IFO business climate - 106.70
24-Feb 11:30 SA GDP Q4 - 1.40%
24-Feb 12:00 EU Final CPI y/y -

-0.60%

24-Feb 16:00 EU ECB President Draghi address - -
24-Feb 17:00 US Consumer confidence - 102.90
24-Feb 17:00 US Federal reserve chair Janet Yellen address - -
25-Feb 15:00 SA Budget speech - -
25-Feb 03:45 CNY HSBC flash manufacturing PMI - 49.70
25-Feb 17:00 US New home sales - 481000
26-Feb 11:30 SA PPI m/m - -0.20%
26-Feb 11:30 SA PPI y/y - 5.80%
26-Feb 11:30 UK 2nd GDP estimate q/q - 0.50%
26-Feb 15:30 US CPI m/m - 0.40%
26-Feb 15:30 US Core CPI m/m - 0%
26-Feb 15:30 US Core durable goods order m/m - -0.80%
26-Feb 15:30 US Weekly jobless claims - 283000
27-Feb 15:30 US Preliminary GDP q/q - 2.60%

 

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When and where

Date

Time

Location

Duration

25 February 18:30 Premier Hotel Regent, East London 1.5hrs
26 February 18:30 Radisson Blu, Port Elizabeth  
10 March 18:30 Redlands Hotel, Pietermaritzburg 1.5hrs
11 March 18:30 Southern Sun Elangeni & Maharani, Durban 1.5hrs
1 April 18:30 Southern Sun, Bloemfontein 1.5hrs

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Broker consensus

Source: INET BFA, as of 20/02/2015

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