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
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.
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.
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.
|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||Mondi Ltd||FY results||
|24-Feb||Shoprite Holdings||Interim results|
|25-Feb||Murray & Roberts||Interim 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||Gold Fields||Cum dividend||20c|
|27 Feb||Hudaco Industries||Cum dividend||310c|
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.
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.
|23-Feb||11:00||EU||German IFO business climate||-||106.70|
|24-Feb||12:00||EU||Final CPI y/y||-||
|24-Feb||16:00||EU||ECB President Draghi address||-||-|
|24-Feb||17:00||US||Federal reserve chair Janet Yellen address||-||-|
|25-Feb||03:45||CNY||HSBC flash manufacturing PMI||-||49.70|
|25-Feb||17:00||US||New home sales||-||481000|
|26-Feb||11:30||UK||2nd GDP estimate q/q||-||0.50%|
|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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|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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Source: INET BFA, as of 20/02/2015