31 August - 4 September 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
At face value, the extent of gains relative to the extent of declines would assume a positive trading week for equities on our local bourse, although it does not tell the full story of the volatility, which preceded the gains, and the China invoked single day decline, which greeted the new week.
The MTN Group find prominence in this week’s decliners list, although a portion of the company’s share price decline can be attributed to the adjustment for a sizeable, R4.80 dividend adjustment.
While crude oil ended the week near session highs, the underlying price of the commodity was under pressure up until Wednesday, amidst global growth concerns coupled with high levels of supply, which still show little signs of abating. A sudden and severe drop off in U.S. oil inventories reported on Wednesday started a rebound in the oil price, which extended more than 10% on Thursday following upbeat U.S. GDP data tempering global economic growth concerns. Sasol saw a late week rebound as a result coupled with the benefit of a significantly weaker USD/ZAR exchange rate.
|31-Aug||Adcorp Holdings Ltd||Ex-Dividend||R0.88|
|31-Aug||Bidvest Group Ltd||Full-year 2015 results||n/a|
|31-Aug||Grand Parade Investments Ltd||Full-year 2015 results||n/a|
|31-Aug||Capital & Counties Properties Plc||Ex-Dividend||£0.00556|
|31-Aug||Liberty Holdings Ltd||Ex-Dividend||R2.54|
|31-Aug||Reinet Investments Ltd||Ex-Dividend||R0.2293|
|31-Aug||Sibanye Gold Ltd||Ex-Dividend||R0.1|
|31-Aug||Wilson Bayly Holmes-Ovcon Ltd||Full-year 2015 results||n/a|
|03-Sep||DRDGold Ltd||Q4 2015 results||n/a|
|03-Sep||RCL Foods Ltd||Full-year 2015 results||n/a|
|03-Sep||Impala Platinum Holdings Ltd||Full-year 2015 results||n/a|
|03-Sep||Sanlam Ltd||Interim 2015 results||n/a|
|04-Sep||African Rainbow Minerals Ltd||Full-year 2015 results||n/a|
Source: Economic Calendar, as of 28/08/2015
Fears of slowing economic growth in China sent global markets into a tailspin on Monday with U.S., European and local indices all experiencing intraday declines in excess of 5% while the Shanghai Composite posted a loss in excess of 8%. In what was a knee jerk reaction, global markets offset initial losses as the week progressed following another round of intervention by the Peoples Bank of China (PBoC) and calming words from the Federal Reserve in the U.S.
The PBoC cut its benchmark lending rate by 0.25% on Tuesday, making it the fifth such rate reduction in the last 10 months. The news stemmed the rate of decline in Asian markets while international markets reacted in a more positive manor.
In the U.S. Federal Reserve Bank president, Mr. William Dudley, cited macro-economic concerns (such as that of Chinese economic growth) as reducing the likelihood of a rate hike in September of this year, although should upcoming data improve leading into the FOMC meeting, there was still a case for monetary tightening next month. A second GDP estimate within the U.S. was ahead of forecasts highlight q/q growth of 3.7%.
The seasonally adjusted real GDP at market prices for the second quarter of 2015 decreased by an annualized rate of 1.3% compared with an increase of 1.3% during the first quarter of 2015.
The main contributors to the decrease in economic activity for the second quarter of 2015 were the manufacturing industry, the mining and quarrying industry and the agriculture, forestry and fishing industry.
Mining production increased by 4.0% year-on-year in June 2015. The highest positive growth rates were recorded for Platinum Group Metals (PGMs), diamonds, chromium ore and manganese ore. The main positive contributors to the 4.0% increase were PGMs, manganese ore, diamonds and chromium ore. Iron ore decreased by 21.0% year-on-year and was a significant negative contributor.
The annual percentage change in the PPI for final manufactured goods was 3.3% in July 2015. From June 2015 to July 2015 the PPI for final manufactured goods increased by 0.2%.
The Week Ahead
The week ahead will hold an elevated propensity for volatility in light of the slowing growth (China) and monetary tightening (U.S) themes, which are prevalent in the current market place. With this in mind Tuesday’s manufacturing PMI data out of China and Friday’s release of U.S. Non-farm employment data will stand out as perhaps the most significant data points to watch in the week.
|01-Sep||03:45||CNY||Caixin final manufacturing PMI||-||47.1|
|01-Sep||16:00||USD||ISM manufacturing PMI||-||52.7|
|02-Sep||14:15||USD||ADP non-farm employment change||-||185K|
|03-Sep||13:45||EUR||Minimum bid rate||0.05%||0.05%|
|03-Sep||14:30||EUR||ECB press conference||-||-|
|03-Sep||16:00||USD||ISM non-manufacturing PMI||-||60.3|
|03-Sep||09:15||SA||HSBC whole economy PMI||-||-|
|03-Sep||11:30||USD||Business confidence index||-||-|
|04-Sep||14:10||USD||FOMC member Lacker speaks||-||-|
|04-Sep||14:30||USD||Non-farm employment change||-||215K|
Source: Economic Calendar, as of 28/08/2015
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Source: INET BFA, as of 28/08/2015