The Week Ahead

30 March - 3 April 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 27/03/2015

Top mover

The week gone by has witnessed a difficult trading environment amidst broad-based selling as markets continue to digest the prospect of rising interest rates in the U.S. and geo-political tension mounts in the Middle East.

Top gainers

The decliner’s lists finds the reappearance of mining shares Kumba Iron Ore, Anglo American Platinum and Impala Platinum. In the wake of depressed commodity prices these shares have exaggerated declines and ranked among some of the worst performing blue chip counters in our domestic equity market.

The initial decline on the MTN Group’s share price can be attributed to the share price adjusting for a healthy R8 dividend. Weakness has persisted throughout the week in the absence of any new news relating, although political uncertainty and the threat of Boko Haram interfering with the election process has perhaps hampered sentiment around businesses operating in an already stressed Nigerian economy. 

Top Decliners

Steinhoff International is perhaps the only “blue chip” counter to have posted a meaningful gain over the course of the week. The market awaits a timeline relative to when the share will list on the Frankfurt stock exchange.

The market might have found some solace in news that the Financial Services Board (FSB) had reported no mention of insider trading within the share ahead of last year’s announcement of the Pepkor acquisition in the FSB’s insider trading watch list. 

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

Click to view this week's broker consensus

 

 

DATE COMPANY EVENT AMOUNT
31-Mar Evraz Highveld Steel & Vanadium Ltd FY results -
2-Apr Anchor Group Ltd Ex-Dividend R 0.12
2-Apr Clover Industries Ltd Ex-Dividend R 0.23
2-Apr Liberty Holdings Ltd Ex-Dividend

R 4.02

2-Apr Metrofile Holdings Ltd Ex-Dividend R 0.09
2-Apr Sasfin Holdings Ltd Ex-Dividend R 0.75
2-Apr Sasol Ltd Ex-Dividend R 7.00

Source: Economic Calendar, as of 27/03/2015

 

Market overview

Local Data

Producer Price Index (PPI) data showed inflation for manufactured goods to have risen a marginal 2.6% in February 2015. The figure follows on from last week’s Consumer Price Index (CPI) recorded at a multi-year low level of inflation at 3.9%. Following on from the relatively low inflationary environment, the South African Reserve Bank (SARB) left lending rates unchanged at the Monetary Policy Committee (MPC) meeting.

The SARB governor reiterated that the low level of economic growth within the country further aided the decision not to tighten lending rates, although the reserve bank remains paused at the beginning of the tightening cycle. The SARB also reported at the beginning of the week that the leading indicator in South Africa recorded a rise to 99.10 in January 2015 from a reading of 98.80 in the prior month. On a quarterly basis, non-farm payrolls in South Africa increased 0.5% in 4Q14, compared with a revised drop of 1.7% posted in the previous quarter. 

International Data

The U.S. continued to cause tremors in global markets as Federal Reserve members took turns in addressing the public on the issue of monetary policy. The Fed Vice Chairman, Stanley Fischer, indicated that the hike in the interest rates from near zero would probably be warranted before the end of 2015, although rate hikes would not be ‘uniform or predictable’. 

James Bullard, a US Fed policymaker, indicated that the Federal Reserve should start raising interest rates sooner rather than later in light of improving unemployment and economic growth. The Final GDP figure out of the U.S. which followed, did however come in below consensus estimates with q/q growth being reported at 2.2% (est. 2.4%).

The week ahead

The new week will see little in the way of economic catalysts or results expected locally. In light of ECB measures, to try to stimulate inflation and growth within the Eurozone the Flash CPI estimate will be of particular importance to market participants. 
U.S. employment data remains one of the most important data points in markets and is scheduled for release on Friday afternoon.

In March’s jobs report, signs of an improving labour market ironically catalysed global market weakness as it brought forward the expectation of monetary tightening within the region.

Date Time Region Event Previous
30-Mar 08:00 SA M3 money supply y/y 7.35%
30-Mar 10:00 EUR German Prelim CPI m/m 0.90%
31-Mar 10:00 UK Current account -
31-Mar 11:00 EU CPI flash estimate y/y -0.30%
31-Mar 16:00 US CB consumer confidence 96.4
1-Apr 03:00 CNY Manufacturing PMI 49.9
1-Apr 03:45 CNY HSBC final manufacturing PMI 49.2
1-Apr 10:30 UK Manufacturing PMI 54.1
1-Apr 02:15 US ADP non-farm employment change 212000
1-Apr 15:00 US ISM manufacturing PMI 52.9
2-Apr 14:30 US Trade balance -41.8bn
3-Apr 14:30 US Non-farm employment change 295000
3-Apr 14:30 US Unemployment rate 5.50%

Source: Economic Calendar, as of 27/03/2015

 

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Broker consensus

Source: INET BFA, as of 27/03/2015

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