The Week Ahead

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

 

Shares overview

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. 

Top Gainers

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

  • Canada production declined during the period, due to reduced drilling and completion activities in FY15
  • Demand for explosives impacted by downturn in mining industry
  • Crude oil production in Gabon increased due to new Etame Expansion Project (EEP) and South East Etame and North Tchibala (SEENT) wells coming on line
  • Quarter 1 volumes impacted by a planned phase shutdown at Sasol Synfuels Operations
  • Performance Chemicals sales volumes to be slightly higher than prior year

Top decliners

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. 

 

Source: Market Insight, as of 30/10/2015

Date Company Event Amount
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

A weekly Broker Consensus of the top traded shares.

Click to view this week's broker consensus

Market overview

Economic Overview

International data

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%).

Local Data

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. 

Date Time Region Event Previous
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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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 30/10/2015

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