The Week Ahead

3 - 7 August 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

Top Gainers

For the six months ending June 30, British American Tobacco Plc results showed group revenue to be up by 2.4% at constant rates of exchange, driven by good pricing. The reported revenue however was 5.9% lower as a result of adverse exchange rate movements. Basic earnings per share was 52.6% higher at 142.4p (2014: 93.3p), benefiting from gains as a result of the acquisition of Lorillard Inc. by the Group’s associate Reynolds American Inc.

Reinet Investments would have gained over the last week, as its primary asset holding is that of British American Tobacco Plc. Brait SE continues to defy gravity as it remains in the top gainers list once again as it has every week since being incorporated into the JSE Top 40 index (despite the absence of any new news relating). Brait SE is set to go ex-dividend on Monday the 3rd of August 2015.

Kumba Iron Ore has started to rebound from the depths of its multi-year lows following a rebound in iron ore as rumors surface in China that steel makers have been ordered to cut production.

Top Decliners

The top decliners list sees a week where industrial counters have come under pressure. The MTN Group saw a sharp sell-off in its share price, following the release of a trading statement, in which the company guided that it expects headline earnings per share for the interim period to be 10% to 15% lower than the comparative 6-month period in 2014.

The decline in earnings follows a weaker Naira in Nigeria, MTN’s largest market. Naspers continues to react to market volatility in Asia, falling in sympathy with its Hang Seng listed counterpart Tencent Holdings.

Source: IG Insight, as of 31/07/2015

Date Company Event Amount
03-Aug Peregrin Holdings Ltd Ex-Dividend R1.50
03-Aug Brait SE (SA) Ex-Dividend R0.0589
05-Aug MTN Group Ltd Half-year earnings release n/a
06-Aug Old Mutual PLC (SA) Half-year earnings release n/a
06-Aug SABMiller PLC (SA) Q2 2016 trading statement release n/a
06-Aug Old Mutual PLC (SA) Half-year 2015 earnings n/a
07-Aug Sappi Ltd Q3 2015 earnings release n/a
07-Aug Liberty Holdings Ltd Interim 2015 earnings release n/a

Source: Economic Calendar, as of 31/07/2015

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

Click to view this week's broker consensus

Market overview

Local Data

The unemployment rate in South Africa fell to a level of 25.0% in 2Q15. The unemployment rate had registered a reading of 26.4% in the previous quarter.

On an annualised basis, the Producer Price Index (PPI) showed inflation at a factory level to have increased by 3.7%, in June 2015, slightly less than the consensus of estimates had predicted (3.9%). The PPI had recorded a rise of 3.6% in the previous month.

Private sector credit increased 8.14% on an annualised basis in June 2015, below market expectations predicting a 9.27% increase. Private sector credit registered a revised increase of 9.42% in the prior month.

International Data

In the U.S., the Federal Open Market Committee (FOMC) meeting revealed little in terms of certainty as to when policy makers would commence with monetary tightening in the world’s largest economy.  While progression in economic conditions were cited as favourable on a number of fronts (including the labour market and wage improvements), the lacklustre level of inflation at present remained a headwind for the Federal Reserve. Advance Gross Domestic Product (GDP) data released for the region came in slightly below expectation with q/q growth being reported at 2.3% (est. 2.6%).

In the U.K, Preliminary GDP data showed growth for the second quarter realised at 0.7% q/q, which was in line with expectations.

The week ahead

Non-Farm employment change data out of the U.S. (on Friday) will once again be the dominant economic data point scheduled for the week, preceded by U.S trade balance data on Wednesday, and ISM Manufacturing PMI data on Monday.

At home, a quiet economic calendar will perhaps be overshadowed by the corporate calendar where blue chip companies Nedbank, MTN, Old Mutual and Liberty Holdings are scheduled to release interim results.

Date Time Region Event Estimation
03-Aug 03:45 CNY Caixin final manufacturing PMI 48.2
03-Aug 10:30 GBP Manufacturing PMI 51.4
03-Aug 16:00 USD ISM manufacturing PMI 53.5
04-Aug 10:30 GBP Construction PMI 58.1
05-Aug 10:30 GBP Services PMI 58.5
05-Aug 14:15 USD ADP non-farm employment change 237K
05-Aug 14:30 USD Trade Balance -41.9B
05-Aug 16:00 USD ISM non-manufacturing PMI 56
05-Aug 09:15 SA HSBC whole economy PMI 49.2
05-Aug 11:30 SA Business confidence index 84.6
06-Aug 10:30 GBP Manufacturing production m/m -0.60%
06-Aug 13:00 GBP BOE inflatoin report -
06-Aug 13:00 GBP MPC official bank rate votes 0-0-9
06-Aug 13:00 GBP MPC rate statement -
06-Aug 13:45 GBP BOE Gov Carney speaks -
06-Aug 14:30 USD Unemployment claims 267K
07-Aug 14:30 USD Non-farm employment change 223K
07-Aug 14:30 USD Unemployment rate 5.30%
07-Aug 08:00 SA Gold & foreign exchange reserves (gross) $46.83B
07-Aug 08:00 SA Gold & foreign exchange reserves (net) $41.59B
08-Aug Tentative CNY Trade balance 46.5B

Source: Economic Calendar, as of 31/07/2015

 

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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 31/07/2015

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