The Week Ahead

23-30 October 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

Top Gainers

The gainers list see’s property stocks Capital & Counties as well as Intu Properties prominent movers in the week gone by. Listed property shares particularly those with offshore exposure (have been relative outperformers on our local bourse in Q3 2015, a move which is being extended into Q4 2015.

The rand hedging attributes  the of industrial counters Brait SE, Richemont and Mediclinic (as with the aforementioned shares Capital & Counties and Intu Properties) provides the common theme in the gainers list this week, as our domestic currency renews weakness against its developed market peers. 

Top decliners

Anglo American Plc released a production report which revealed Q3 2015 production to have declined against the previous year’s comparative quarter  for iron ore (Kumba -12%), export thermal coal (-2%), copper (-3%), nickel (-36%) and diamonds (-27%). Over the three month period, increased production of platinum (+14%) and metallurgical coal (+8%) was realised.

The market reacted negatively to a soft operational update (for the three months ending September 2015) from Shoprite Holdings. The group realised a 6.7% increase in turnover growth for the period, with South African sales growth of 4.9%. The operations outside of South Africa, although a smaller contributor to revenue, saw a more robust 12.8% increase in turnover growth. 

Source: Market Insight, as of 23/10/2015

Date Company Event Amount
26-Oct Taste Holdings Ltd Rights Issue n/a
26-Oct EOH Holdings Ltd Ex-Dividend R1.50
26-Oct Netcare Ltd Ex-Dividend R3.87
26-Oct Phumelela Gaming and Leisure Ex-Dividend R0.06
28-Oct British American Tabacco 9 month trading statement expected n/a
28-Oct Redefine International Plc FY 2015 Results n/a
30-Oct DRDGold Q1 2016 results n/a

Source: Economic Calendar, as of 23/10/2015

A weekly Broker Consensus of the top traded shares.

Click to view this week's broker consensus

Market overview

Economic Overview

International data

In China, Gross Domestic Product (GDP) data for Q3 2015, released on Monday, showed economic growth of 6.9% q/y. The figure was slightly below the previous quarter’s (Q2 2015) growth figure of 7%, although slightly ahead of consensus estimates which had predicted GDP growth of 6.8%.  Friday then saw the Peoples Bank of China (PBOC) embark on another round of monetary easing measures to further stimulate the region’s economy. The PBOC cut the one-year lending and deposit rates by 0.25% and reduced reserve requirements for all banks by 0.5%.

In Europe, the European Central Bank (ECB) left lending rates unchanged. ECB president Mario Draghi then set a dovish tone at the ECB press conference which followed the rates announcement. At the press conference Mr Draghi recognised emerging market developments as having impacted economic growth and inflation in Europe. The possibility of further stimulus to aid inflation was discussed by the ECB and speculation thereof now shifts to December’s monetary policy meeting.

Local Data

Wholesale trade sales in South Africa decreased by 0,1% year-on-year in August 2015. Seasonally adjusted wholesale trade sales decreased by 1,0% in August 2015 compared with July 2015. This followed month-on-month changes of 1,0% in July 2015 and -0,5% in June 2015.

Motor trade sales in South Africa decreased by 3,3% year-on-year in August 2015. The largest negative annual growth rates were recorded for fuel sales (-8,7%) and new vehicle sales (-6,1%).

Retail trade sales increased by 3,9% year-on-year in August 2015. The main contributors to the 3,9% increase were general dealers, retailers in textiles, clothing, footwear and leather goods and all 'other' retailers.

The headline CPI annual inflation rate in September 2015 was 4,6%.

On Wednesday, Finance Minister Mr Nhlanhla Nene addressed parliament and the media with the mini budget speech. In the speech, real GDP estimates for South Africa were revised lower to 1.5% in 2015, 1.7% in 2016 and 2.6% in 2017. Inflation is expected to peak at around 6.2% in 2016 before moving back within the targeted 3% to 6% band in 2017. The budget deficit is expected to decline over the next three years to -3% of GDP in FY 2018/2019.

The Week Ahead

The new week will provide further evidence on the state of global growth as the U.K. reports Q3 2015 Preliminary GDP figures on Tuesday and the U.S. reports advance GDP data for Q3 2015 on Thursday.  

Date Time Region Event Previous
26-Oct 11:00 EUR German Ifo Business Climate 108.5%
27-Oct 11:30 GBP Prelim GDP q/q 0.70%
27-Oct 14:30 USD Core Durable Goods Orders m/m -0.20%
27-Oct 16:00 USD CB Consumer Confidence 103
27-Oct 11:30 SA Unemployment total 5.3m
28-Oct 14:30 USD Goods Trade Balance -67.2B
28-Oct 20:00 USD FOMC Statement  
28-Oct 20:00 USD Federal Funds Rate <0.25%
29-Oct 14:30 USD Advance GDP q/q 3.90%
29-Oct 14:30 USD Unemployment Claims  
29-Oct 08:00 SA m3 Money Supply 10.02%
29-Oct 11:30 SA PPI y/y 3.40%
30-Oct 14:30 USD Employment Cost Index q/q 0.20%

Source: Economic Calendar, as of 23/10/2015

 

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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 23/10/2015

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