The more sporadic and less sector-themed grouping of ‘blue chip’ gainers and losers, highlights that last week was a busy one for corporate news, where share price movements from those with news inherent, have superseded those catalysed by the broader macro themes prevalent.
The market found favour with the results released by Investec last week. The group’s operating profit from continuing operations increased by 15%. The three core divisions, wealth and investment, specialist banking and asset management grew their operating profit figures by 19.2%, 18.4% and 3.6% respectively.
Aspen extended the previous week’s gains following the announcement of further disposals from within the company. Aspen’s wholly owned Australian subsidiary, Aspen Australia, has entered into an agreement with Strides Pharma to dispose of a portfolio of around 130 products for around A$265 million. In a separate transaction, Aspen Global Incorporated (Mauritius) is to divest (to Strides Singapore) a portfolio of six branded prescription products, for a consideration of approximately US$92 million. The group’s divestment see’s the company generating large amounts of cash from the sale of non-core items, possibly freeing up funds for further acquisitions which would better integrate into the company’s core operations.
Netcare results saw investor sentiment buck the recent trend evident in its healthcare sector peers. The group reported a 14.6% increase in EBITDA and 19.6% increase in adjusted headline earnings per share. The cash generated from operations increased by 27.5% and the interim dividend was raised by 18.8% to 38c per share.
In a follow up to the disappointment expressed by market participants relating to Mediclinic International’s recent trading statement, the market extended the near-term disapproval of the company’s actual results. Basic normalised headline earnings per share growth of 9% was mid guidance and a final dividend per share 11% higher than the comparative period was proposed.
Vodacom full year results saw revenue marginally higher (+2.1%), although the underlying headline earnings per share fell by 4% over the period. The company which derives the bulk of earnings from South Africa, cited that the 50% cut in mobile termination rates as well as increased pricing competition and a weak domestic economy adversely impacted the results.
BHP Billiton’s share price decline is misleading as the company unbundled the non-core items into a separate company listing South32. South32 has relinquished BHP Billiton’s control of cash generative assets producing bauxite, alumina, aluminium, thermal and metallurgical coal, manganese, nickel, silver, lead and zinc in the Southern Hemisphere.
The new week
The new week is off to a relatively slow start with volumes traded being thin on Monday as European and US markets are closed for banking holidays. The economic calendar to follow will perhaps find most relevance in South African gross domestic product (GDP) data for the first quarter (Tuesday) and the second GDP print (Preliminary GDP) for the first Quarter in the US (Friday).
In Europe all eyes will remain focused on Greek policymaker’s attempts to access bailout funds before another tranche of debt is due early next month.