30 October - 6 November 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
Our local equity market has started to correct this week from the strong rally witnessed inmost of October. Our local equity market has started to correct this week from the strong rally witnessed inmost of October.
The Mondi Group’s has benefitted from its rand hedging attributes as well as news that the company has signed an agreement for the sale of its recycled containerboard mill and related recycling operations for an enterprise value of €25 million. The transaction remains subject to competition clearance and is expected to complete by the end of 2015.
SABMiller Plc’s request to have the formal offer deadline of ABInbev’s potential takeover bid extended was granted by U.K authorities. The deadline is now set for 4 November. The news saw SABMiller Plc’s share price rally as the indication is one of firm intent by the company to get the deal done.
Sasol Limited released its production and sales metrics for the 3 months ending September 2015
News of a landmark fine amounting to $5.2bn, was issued to The MTN Group from the Nigerian telecoms regulator. The penalty was issued following MTN’s failure to disconnect unregistered subscribers timeously. The fine translates to roughly the first six months of the group’s revenue in 2015. While MTN Nigeria is in talks with the regulator to try address the situation (hoping for a reduction in the fine amount), the Nigerian authorities have further announced that MTN has until the 16th of November to pay the fine amount.
Resource counters have once again borne the brunt of equity market weakness as a hawkish tone set by the U.S. Federal Reserve in the FOMC statement on Wednesday equated to a relatively stronger dollar and in turn weaker commodity prices.
|2 Nov||Nedbank Group Ltd||RTrading Update||n/a|
|2 Nov||Datacentrix Holdings Ltd||Ex-Dividend||R0.0923|
|2 Nov||PSG Group Ltd||Ex-Dividend||R1.00|
|4-Nov||Old Mutual Plc||Trading Statement||n/a|
|5 Nov||Harmony Gold Mining Co Ltd||Q1 2016 results||n/a|
|5 Nov||MediClinic International Ltd||H1 results||n/a|
|6 Nov||Cie Financiere Richemont (SA)||H1 Results||n/a|
|6 Nov||ArcelorMittal South Africa Ltd||Q3 results||n/a|
Source: Economic Calendar, as of 30/10/2015
The U.S. provided the most significant catalysts for market direction this week with the release of Q3 2015 Gross Domestic Product (GDP) data as well as the FOMC statement and funds rate announcement. While no change was made to lending rates (by the Federal Reserve), guidance issued was that rates could still be increased at December’s meeting. The market interpreted the guidance as hawkish and in turn the Dollar renewed strength and commodity prices weakened. Thursday’s U.S. Advance GDP data revealed economic growth of 1.5% q/q, significantly lower than the GDP figure of 3.9% q/q realised in Q3, although only slightly below expectations of 1.6% q/q growth.
U.K. Gross Domestic Product (GDP) data fell marginally short of consensus estimates coming in at 0.5% q/q (est. 0.6%).
The annual percentage change in the Producer Price Index (PPI) for final manufactured goods was 3,6% in September 2015. From August 2015 to September 2015 the PPI for final manufactured goods increased by 0,3%.
The private sector credit climbed 8.4% on an annual basis in September, in South Africa, lower than market expectations for a rise of 8.5%. In the prior month, the private sector credit had recorded a rise of 8.6%.
The unemployment rate climbed to 25.5% in 3Q15, compared with market expectations of a rise to 25.1%. In the previous quarter, the unemployment rate had recorded a reading of 25.0%.
The Week Ahead
The new week will begin with the release of Manufacturing PMI data from China, the U.K. and the U.S. to guide financial markets. Tuesday and Wednesday will see testimonies from the ECB President, Mario Draghi and Federal Reserve chairperson, Ms Janet. The week is then set to end with arguably the most watched economic data points out of the U.S., in the form of Non-Farm payroll and Unemployment Rate data.
|1 Nov||03:00||CNY||Manufacturing PMI||49.8|
|2 Nov||03:45||CNY||Caixin Manufacturing PMI||47.2|
|2 Nov||11:30||GBP||Manufacturing PMI||51.5|
|2 Nov||17:00||USD||ISM Manufacturing PMI||50.2|
|3 Nov||11:30||GBP||Construction PMI||59.9|
|3 Nov||21:00||EUR||ECB President Draghi Speaks|
|4 Nov||09:15||SA||HSBC Whole Economy PMI||47.9|
|4 Nov||11:30||SA||Business Confidence Index||81.6|
|4 Nov||11:30||GBP||Services PMI||53.3|
|4 Nov||15:15||USD||ADP Non-Farm Employment Change||200k|
|4 Nov||15:30||USD||Trade Balance||-48.3bn|
|4 Nov||17:00||USD||Fed Chair Yellen Testifies|
|4 Nov||17:00||USD||ISM Non-Manufacturing PMI||56.9|
|5 Nov||14:00||GBP||BOE Inflation Report|
|5 Nov||14:00||GBP||MPC Official Bank Rate Votes||1-0-8|
|5 Nov||14:00||GBP||Monetary Policy Sunnary|
|5 Nov||14:00||GBP||Official Bank Rate||0.50%|
|5 Nov||14:45||GBP||BOE Gov Carney Speaks|
|5 Nov||15:30||USD||Unemployment Claims||260k|
|6 Nov||11:30||GBP||Manufacturing Production m/m||0.50%|
|6 Nov||15:30||USD||Non-Farm Employment Change||142k|
|6 Nov||15:30||USD||Unemployment Rate||5.10%|
|6 Nov||SA||Gold and Foreign Exchange Reserves (gross)||$46.12bn|
|6 Nov||SA||Gold and Foreign Exchaneg Reserves (net)||$41.15bn|
Source: Economic Calendar, as of 30/10/2015
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Source: iNet BFA, as of 30/10/2015