The Week Ahead

29 August 2014

Our regular look at the news making the headlines, using our market insight information and analysis tools - now with online videos and tutorials.

By Shaun Murison,  Market Analyst


View market data

Company announcements


Economic catalysts

Market overview

Local Data

Movements on our local bourse have been dominated by local company earnings releases and guidance, combined with risk aversion amidst geo-political unrest.

Tensions over a technical recession being realised, were abated after Gross Domestic Product (GDP) showed 0.6% growth quarter-on-quarter. The figure, although a relief from the previous quarter’s realised contraction, fell short of consensus estimates which forecast growth to have recovered to 0.9% quarter-on-quarter.

Producer Price Index (PPI) data showed inflation at a factory level to be at 8% annualised in July 2014, while the South African Reserve Bank’s leading indicator improved to a reading of 100.1 in June from 99.60 reported previously.

International Data

In Europe, the poor run of economic data from Germany continued, renewing concerns around the Eurozone’s economic health, and in turn recovery. Business and consumer climate data in Germany fell short of expectation and diminished from the previous months reading, while retail sales contracted by 1.4% month-on-month.

In the US, data has been upbeat with preliminary GDP showing strong economic growth of 4.2%. While new home sales have slowed from the previous month, pending home sales were a significant beat on consensus estimates (0.6%) showing a 3.3% increase month-on-month. Chicago PMI data, a leading indicator of economic health, alluded to industry expansion with an index reading of 64.3 which was well above expectation.

Ukrainian President Petro Poroshenko’s claims that Russian troops had entered the Ukraine as well as news that Pro-Russian rebels had increased their assertions have created a risk off scenario in emerging economies.

Source: IG Insight, as of  29/08/2014

Top movers

Source: IG Insight, as of 29/08/2014

A look at this week’s top blue chip movers, witness the obvious trend of a resource heavy weighting on the decliners list. Impala Platinum full-year results revealed the impact of five months of labour inactivity from the platinum strike, as Headline Earnings Per Share (HEPS) declined by a massive 74%.

Iron ore prices have reached five year lows this week, as Chinese inventories of the commodity have been reported at record highs, fuelling demand concerns. This has not boded well for local miners of the steelmaking ingredient such as Kumba Iron Ore and Assore who rely on Asian demand for the vast majority of exports. Diversified mining giant, BHP Billiton, is also heavily reliant on iron ore as it accounts for around 50% of underlying earnings. Losses on the share continue from the previous week’s disappointment of no share buyback being announced along with the company’s results.

On the top gainers list, Sanlam has benefited from a positive sentiment stemming from a massive HEPS increase of 119% from Santam (of which Sanlam owns around 60%). Earnings were boosted largely by less claims relating to inclement weather, the sustainability of which will be questioned moving forward.

Shoprite Holdings is experiencing a relief rally after last week’s negative reaction to its earnings release. A positive results release from Woolworths Holdings in which headline earnings increased by 17.1%, has perhaps provided a short-term improvement to sentiment in the retail sector. Woolworth’s success on the Witchery acquisition which provided a boost to full-year earnings growth, has perhaps added credence to their current David Jones acquisition, which was originally deemed expensive by many. Woolworths has now confirmed that it will undergo a rights issue to raise R10 billion in funding towards the David Jones acquisition. 

Earnings focus

Yesterday Woolworths posted strong full-year results, demostrating growth across the group:

  • Profit before tax +20.1%
  • Headline earnings per share +17.1%
  • Final gross cash dividend of 150.5 cents


Broker consensus

Brokers view on the markets.

Click to view this week's broker consensus




Single candlestick reversals

A candlestick chart is a style of bar-chart used to describe price movements for a designated span of time. They are used by traders to determine when to enter and exit trades.

There are many trading strategies based on candlestick patterns, such as the engulfing pattern, harami, harami cross and evening star. Watch our video to learn more about candlesticks.

Future seminars

Attend one of our free Trading strategy and Market update seminars, and with the help of our experts refine your trading strategy.

When and where





17 Septemebr 2014

18.30 Protea Hotel, Stellenbosch 1.5hrs
18 September 2014 18:30 The Westin, Cape Town 1.5hrs
29 October 2014 18:30 IG Offices, Johannesburg 1.5hrs
30 October 2014 18:30 Pretoria Country Club, Pretoria 1.5hrs

Try our platform

Follow one of the links below for a quick look at our web-based platform and the range of markets on offer.

Domestic account

  • Explore our platform with no login
  • Search for your favourite shares and open deal tickets
  • Access charts and technical analysis tools

International account

  • Explore our platform with no login
  • Search for your favourite shares and open deal tickets
  • Access charts and technical analysis tools

IG provides an execution-only service. The material on this website does not contain (and should not be construed as containing) investment advice or an investment recommendation, or a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of the above information. Consequently any person acting on it does so entirely at his or her own risk. The research does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. This communication must not be reproduced or further distributed. The price levels provided are derived from ProRealtime Charts (IT-Finance)

Broker consensus

Source: INET BFA, as of 29/08/2014

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81% of retail investor accounts lose money when trading CFDs with this provider.You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.