The Week Ahead

24 - 28 August 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

It has been a tough week for markets, which continue to digest Chinese induced fears of slowing economic growth and deflation in conjunction with mostly weaker macro data reported globally.

Top decliners

Saudi Arabia and Iraq maintaining oil production at record levels, combined with the threat of Iranian crude exports entering the market, have weighed significantly on the price of crude oil. High levels of crude inventory being reported out of the U.S. in the last week has also added to the bearish sentiment for the commodity.

The impact of a falling oil price has negatively affected locally listed oil producer Sasol and telecommunications company MTN. MTN which derives the bulk of group earnings from oil producing nation Nigeria, falls victim to the potential economic impact of the declining commodity price. In addition emerging market woes have seen the Nigerian Naira depreciate more than the Rand, which could provide a negative contribution to earnings when repatriated to South Africa. 

Top gainers

A relatively sparse gainers list tells the story of a difficult trading week.

 The last remaining dedicated Platinum Group Metal (PGM) miner (Anglo Platinum) and gold miner ( AngloGold Ashanti) in the Top 40 index, take top honours in terms of share price gains this last week.

Furthering gains realised over the last week from renewed safe haven demand for gold, AngloGold Ashanti saw strong gains in its share price following the release of its interim results. Amidst tough economic conditions the miner has managed to reduce all-in-sustaining costs to $928/oz (12%) while maintaining production levels ahead of guidance. The company also appears to be making headway in terms of reducing the large levels of debt which have haunted it over the last while.

Source: IG Insight, as of 21/08/2015

Date Company Event Amount
24-Aug Oceana Group Ltd Corporate actions n/a
24-Aug Anchor Group Ltd Ex-Dividend R0.11
24-Aug Merafe Resources Ltd Ex-Dividend R0.01
24-Aug MTN Group Ltd Ex-Dividend R4.80
24-Aug Super Group Ltd Full-year 2015 results n/a
24-Aug Sun International Ltd Full-year 2015 results n/a
26-Aug Adcock Ingram Ltd Full-year 2015 results n/a
26-Aug Growthpoint Properties Ltd Full-year 2015 results n/a
26-Aug Imperial Holdings Ltd Full-year 2015 results n/a
26-Aug Murray & Roberts Ltd Full-year 2015 results n/a
26-Aug Santam Ltd Interim 2015 results n/a
27-Aug Assore Ltd Full-year 2015 results n/a
27-Aug Massmart Holdings Ltd Interim 2015 results n/a
27-Aug Woolworths Holdings Ltd Full-year 2015 results n/a

Source:  Economic Calendar, as of 21/08/2015

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

Click to view this week's broker consensus

Market overview

Local Data

Measured in nominal terms (current prices), motor trade sales increased by 2.8% year-on-year in June 2015. The highest annual growth rates were recorded for sales of accessories (9.3%), new vehicle sales (6.3%) and workshop income (4.7%).

Measured in real terms (constant 2012 prices), wholesale trade sales increased by 0.4% year-on-year in June 2015. Seasonally adjusted wholesale trade sales decreased by 0.5% in June 2015 compared with May 2015. This followed month-on-month changes of 3.4% in May 2015 and -6,0% in April 2015.

Measured in real terms (constant 2012 prices), retail trade sales increased by 3.5% year-on-year in June 2015. The highest annual growth rates were recorded for retailers in:

  • Household furniture, appliances and equipment (6.8%); and
  • Textiles, clothing, footwear and leather goods (5.8%).

The headline CPI (for all urban areas) annual inflation rate in July 2015 was 5.0%. This rate was 0.3 of a percentage point higher than the corresponding annual rate of 4.7% in June 2015. On average, prices increased by 1.0% between June 2015 and July 2015.

International Data

In the U.S., Consumer Price Index (CPI) data and Core CPI data fell short of consensus showing inflation in both index baskets to be marginal at 0.1% m/m. Weekly jobless claims data saw more people claiming unemployment benefits than was expected. The highly anticipated Federal Open Market Committee (FOMC) meeting minutes saw comments from some Federal Reserve members suggesting that the outlook for inflation remained muted. Expectations for a September rate hike have diminished following the news as well as China’s recent currency devaluation threatening deflationary pressures in the U.S.

In China, Caixin Manufacturing PMI index data added to fears of an economic slowdown in the world’s second largest economy. The index reading came in at 47.1, alluding to industry contraction larger than that of the previous month (47.8) as well as that which was forecast (48.1). 

The week ahead

The new week will continue to focus on the state of global economic growth. Local Gross Domestic Product (GDP) data is scheduled for release on Tuesday, while U.S. Preliminary GDP is scheduled for Thursday and Second GDP estimates out of the U.K. are scheduled for Friday. 

Date Time Region Event Previous
25-Aug 10:00 EUR German Ifo business climate 108
25-Aug 16:00 USD CB consumer confidence 90.9
25-Aug 11:30 SA GDP q/q 1.30%
25-Aug 11:30 SA GDP y/y 2.10%
26-Aug 14:30 USD Core durable goods orders m/m 0.60%
27-Aug 14:30 USD Prelim GDP q/q 2.30%
27-Aug 14:30 USD Unemployment claims 277K
27-Aug 11:30 SA PPI m/m 0.30%
27-Aug 11:30 SA PPI y/y 3.70%
28-Aug 10:30 GDP Second estimate GDP q/q 0.70%
28-Aug 14:30 USD Goods trade balance -62.3B

Source:  Economic Calendar, as of 21/08/2015

 

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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 21/08/2015

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