The Week Ahead

2 - 6 March 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 27/02/2015

Top gainers

Full-year results from Capital & Counties Properties Plc saw a total return of 25% for the year, EBITDA up 7% while the company’s property valuation was noted as having grown by 28% on a like for like basis.

Discovery Ltd experienced a knee jerk reaction in its share price after it released interim results accompanied by news of a rights issue. In the results, normalised Headline Earnings Per Share (HEPS) increased 20% while the embedded value for the company grew by 14%. The right issue looks to raise R4-R5bn, primarily in aid of expansion into the U.K. and its newly branded VitalityLife offering.  

The Mondi Ltd reported a robust set of results for the 2014 financial year. Underlying earnings for the period increased by 13% with a strong contribution from all its business units. A full-year dividend of 42c (EURO) has been recommended which is 17% higher than that of the comparative period. 

Old Mutual year-end results saw adjusted operating earnings per share fall 3% in 2014, as South African operations were negatively impacted by an 18% depreciation in the Rand against the British Pound. A dividend of 6.25p (UK) per share has been recommended by the company’s directors.

Top Decliners

Assore Ltd heads up the decliners list once again in the absence of any new news. The company’s continued decline follows on from weak results released in preceding weeks as well as the demand constraint and oversupply of iron ore, the company’s primary commodity produced. The move comes despite the R3 dividend offering which sees the company going ex-div on Monday.

Impala Platinum full-year results showed a 53.5% drop in HEPS amidst a difficult trading environment. A weak platinum price and production losses stemming from the collapsed mine shafts in the Zimplats operations have hampered profitability over the period. The company will not be paying an interim dividend in aid of preserving cash.

Shoprite Holdings interim results saw trading profit up 11.6%, Turnover +12.5% and diluted HEPS up 8.6%. The dividend per share was increased by 8.3% to 143c.

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

Click to view this week's broker consensus

 

 

DATE COMPANY EVENT AMOUNT
02-Mar Assore Ltd Ex-Dividend R 3.00
02-Mar Bidvest Group Interim results N/A
02-Mar Gold Fields Ex-Dividend R 0.20
02-Mar Hudaco Industries Ex-Dividend R 3.10
02-Mar JD Group Interim results N/A
02-Mar Santam Ltd FY results N/A
02-Mar Woolworths Holdings Ex-Dividend R 0.97
03-Mar Barclays Africa Group FY results N/A
03-Mar Firstrand Interim results N/A
03-Mar Royal Bafokeng Platinum FY results N/A
03-Mar Steinhoff International Interim results N/A
04-Mar Grothpoint Properties Interim results N/A
04-Mar MMI Holdings Interim results N/A
04-Mar MTN Group FY results N/A
04-Mar RMB Holdings Interim results N/A
05-Mar Aspen Pharmcare Interim results N/A
05-Mar Exxaro Resources FY results N/A
05-Mar JSE Ltd FY results N/A
05-Mar Standard Bank Group FY results N/A
05-Mar Sanlam Ltd FY results N/A
06-Mar City Lodge Hotels Cum-Dividend R 2.30
06-Mar Discovery Ltd Cum-Dividend R 4.30
06-Mar Distell Group Cum-Dividend R 1.58
06-Mar Kumba Iron Ore Cum-Dividend R 7.76
06-Mar Onelogix Group Cum-Dividend R 0.08
06-Mar Remgro Ltd Cum-Dividend R 1.69
06-Mar Truworths International Cum-Dividend R 2.36

 

Market overview

Local Data

The South African 4th quarter GDP was reported by Statssa to have increased by 4.1% q/q and 1.3% y/y. The main contributors to the increase in economic activity for the fourth quarter of 2014 were the manufacturing industry (contributing 1.2 percentage points), the mining and quarrying industry (contributing 1.1 percentage points) and finance, real estate and business services (contributing 0.7 of a percentage point).

Producer Price Index data (PPI) showed the annual percentage change for final manufactured goods was 3.5% in January 2015.

In Finance Minister, Mr. Nhlanhla Nene’s budget speech, the economic growth outlook for South Africa was revised lower for 2015, to an expected growth rate of 2%. Inflation is expected to moderate at 4.3% for the year and the budget deficit is anticipated to be around 3.9% into 2016. Some of the salient features in terms of tax proposals are as follows:

  • Salaried earners above 181900 per annum will see a 1% increase in their tax rate
  • Fuel levy to increase 30.5c per litre
  • Road Accident Fund levy to increase 50c per litre
  • Electricity levy to increase from 3.5c/kWh to 5.5c/kWh
  • Energy-efficiency savings tax incentive to increase from 45c/kWh to 95c/kWh
  • Beer (can) +6%
  • Wine (Bottle) +4.8%
  • Spirits +8.5%
  • Cigarettes +7%

International Data

Upon submission of structural reform and fiscal targets by Greek leaders, Greece now looks to secure access to bailout funds from the Troika (EU, ECB and IMF) for the next four months, ending the saga relating to the country exiting the Eurozone.

In the U.S., those looking for clues from the Federal Reserve banks (Chairperson Janet Yellen) testimonies, as to when interest rates within the region will start to rise would find little change in guidance as comments relating thereto-remained non-committal. The second estimate for U.S. GDP growth in the fourth quarter saw a slight upward revision to 2.2% q/q. In the U.K., the second GDP estimate showed fourth quarter GDP unchanged at 0.5% q/q growth.

The week ahead

The new week will once again find a busy local corporate calendar, as no less than 16 JSE listed companies are set to release results. Investors will be looking at the banking sector in particular as the remaining three major banks ( Standard Bank, Barclays Africa Group and Firstrand) guide towards their most recent earnings.

On Thursday, news of any changes to lending rates and/or monetary policy in the U.K. and the Eurozone will find economic importance in financial markets, while Friday’s employment data out of the U.S. is the data point most likely to catalyse volatility in the new week/month.

DATE TIME REGION EVENT EST. PREV.
02-Mar 15:45 CNY HSBC Final manufacturing PMI - 49.8
02-Mar 11:30 SA Business Confidence Index - 89.3
02-Mar 11:30 UK Manufacturing PMI - 53
02-Mar 12:00 EU CPI Flash Estimate y/y - 0.60%
03-Mar 11:30 UK Construction PMI - 59.1
04-Mar 11:30 UK Services PMI - 57.2
04-Mar 15:15 US ADP non-farm employment change - 213000
04-Mar 17:00 US ISM non-manufacturing PMI - 56.7
05-Mar 14:00 UK Bank rate & MPC statement - 0.50%
05-Mar 14:45 EU Rate announcement - 0.50%
05-Mar 15:30 EU ECB press conference - -
05-Mar 15:30 US Weekly unemployment claims - -
06-Mar 15:30 US Non-farm employment change - 257000
06-Mar 15:30 US Unemployment rate - 5.70%
06-Mar 15:30 US Trade balance - (46.6bn)
06-Mar 08:00 SA Gold & foreign exchange reserve (gross) - $47.61bn
06-Mar 08:00 SA Gold & foreign exchange reserve (net) - $42.15bn

 

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Broker consensus

Source: INET BFA, as of 27/02/2015

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