The Week Ahead

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

 

Shares overview

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.  

Top decliners

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. 

Top gainers

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.

Source: IG Insight, as of 28/08/2015

Date Company Event Amount
31-Aug Adcorp Holdings Ltd Ex-Dividend R0.88
31-Aug AECI Ltd Ex-Dividend R1.25
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

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

Click to view this week's broker consensus

Market overview

International data

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%.

Local

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.

Date Time Region Event Previous Estimation
01-Sep 03:00 CNY Manufacturing PMI - 50
01-Sep 03:45 CNY Caixin final manufacturing PMI - 47.1
01-Sep 10:30 GBP Manufacturing PMI - 51.9
01-Sep 16:00 USD ISM manufacturing PMI - 52.7
02-Sep 10:30 GBP Construction PMI - 57.1
02-Sep 14:15 USD ADP non-farm employment change - 185K
03-Sep 10:30 GBP Services PMI - 57.4
03-Sep 13:45 EUR Minimum bid rate 0.05% 0.05%
03-Sep 14:30 EUR ECB press conference - -
03-Sep 14:30 USD Trade balance - -43.8B
03-Sep 14:30 USD Unemployment claims - 271K
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
04-Sep 14:30 USD Unemployment rate - 5.30%

Source: Economic Calendar, as of 28/08/2015

 

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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 28/08/2015

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