The Week Ahead

25 - 29 May 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 22/05/2015

Top gainers

The market found favour this week from the results released by Investec. The group’s operating profit from continuing operations increased by 15%. The three core divisions, wealth and investment, specialist banking and asset management grew their respective operating profit figures by 19.2%, 18.4% and 3.6%.

Aspen extended the previous week’s gains following the announcement of further disposals from within the company. Aspen’s wholly owned Australian subsidiary, Aspen Australia, has entered into an agreement with Strides Pharma Pty Ltd to dispose of a portfolio of around 130 products for around A$265m. 

In a separate transaction, Aspen Global Incorporated (Mauritius) is to divest (to Strides Singapore) a portfolio of six branded prescription products, for a consideration of approximately US$92 million. The group’s divestment sees the company generating large amounts of cash from the sale of non-core items, possibly freeing up funds for further acquisitions, which would better integrate into the company’s core operations.

Netcare results saw investor sentiment buck the recent trend evident in its healthcare sector peers. The group reported a 14.6% increase in EBITDA and 19.6% increase in adjusted headline earnings per share. The cash generated from operations increased by 27.5% and the interim dividend was raised by 18.8% to 38c per share.

Top Decliners

In a follow up to the disappointment expressed by market participants relating to Mediclinic International’s trading statement released in the previous week, the market has extended its near-term disapproval of the actual results released this week. Basic normalised headline earnings per share growth of 9% was mid guidance and a final dividend per share 11% higher than the comparative period was proposed.

BHP Billiton’s share price decline is misleading as the company unbundled the non-core items into a separate company listing South32. South32 has relinquished BHP Billiton’s control of cash generative assets producing bauxite, alumina, aluminum, thermal and metallurgical coal, manganese, nickel, silver, lead and zinc in the Southern hemisphere.

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

Click to view this week's broker consensus

 

 

Date Company Event Amount
25-May Redefine Properties Ex-Dividend R0.39
25-May AECI Ex-Dividend R3075
25-May Illovo Sugar Ltd Full-year results n/a
25-May Tongaat Hulett Ltd Full-year results n/a
25-May Rhodes Food Group Pty Ltd Interim results n/a
25-May Nampk Ltd Interim results n/a
27-May Mr Price Group Ltd Full-year results n/a
27-May Lewis Group Ltd Full-year results n/a
29-May Aquarius Platinum Ltd (SA) Q3 results n/a
29-May Redefine International PLC Interim results n/a
29-May African Bank Investments Ltd Full-year results n/a

Source:  Economic Calendar, as of 22/05/2015

 

Market overview

Local Data

The South African Reserve Bank (SARB) kept lending rates unchanged (5.74%) at the Monetary Policy Committee (MPC) meeting on Thursday. The rand was cited as remaining an upside risk to the inflation outlook which has been revised to an expected average of 4.9% in the current year. The outlook for growth remains muted and has been revised lower to 2.1% for 2015.

The headline CPI (for all urban areas) annual inflation rate in April 2015 was 4.5%. This rate was 0.5 of a percentage point higher than the corresponding annual rate of 4.0% in March 2015. On average, prices increased by 0.9% between March 2015 and April 2015.

Retail trade sales increased by 2.0% year-on-year in March 2015. The main contributors to the 2.0% increase were retailers in hardware, paint and glass (contributing 0.7 of a percentage point) and retailers in pharmaceuticals and medical goods, cosmetics and toiletries (contributing 0.5 of a percentage point).

Measured in real terms, wholesale trade sales increased by 3.2% year-on-year in March 2015. Seasonally adjusted wholesale trade sales increased by 1.8% in March 2015 compared with February 2015.

Measured in nominal terms, motor trade sales increased by 5.9% year-on-year in March 2015. The highest annual growth rates recorded for sales of accessories (20.8%) and used vehicle sales (18.6%).

International Data

It has been a relatively quiet week on the international economic front.

In Europe, Greek policy makers continue to barter with the Troika in aid of accessing bailout funds in order to meet upcoming debt obligations. Flash Manufacturing PMI data saw the German figures a slight miss on consensus while the French figures exceeded expectations.

 In the U.S., existing home sales as well as Philly Fed Manufacturing data fell short of consensus tempering recent gains in the dollar. Consumer Price Index (CPI) data showed inflation to have increased by 0.1% m/m while Core CPI data increased at 0.3% m/m. 

The week ahead

The new week will see another light economic calendar in terms of the volume of events scheduled, however the relevance of the data points remain significant in the context of global economic growth.

Of particular importance will be the release of South African Gross Domestic Product (GDP) data for the first quarter on Tuesday and the second GDP print (Preliminary GDP) for the first Quarter in the U.S. on Friday.

Date Time Region Event Previous
26-May 11:30 SA Unemployment data 4.91m
26-May 11:30 SA GDP y/y 4.10%
26-May 11:30 SA GDP q/q 1.30%
26-May 14:30 US Core durable goods orders m/m 0.30%
26-May 16:00 US CB consumer confidence 95.2
28-May 11:30 SA PPI m/m 1.80%
28-May 11:30 SA PPI y/y 3.10%
28-May 14:30 US Unemployment claims 274000
29-May 10:30 GB Second estimate GDP q/q 0.30%
29-May 14:30 US Prelim GDP q/q 0.20%
29-May 08:00 SA M3 money supply y/y 7.42%

Source:  Economic Calendar, as of 22/05/2015

 

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Broker consensus

Source: INET BFA, as of 22/05/2015

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