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A round-up of market news

A look at last week’s market performance locally and internationally, as well as JSE-listed company news.

Last week, global equity markets rebounded from weak levels in the preceding week. This followed a recovery in oil prices and a dovish tone set by the US Federal Open Market Committee

(FOMC) and European Central Bank (ECB) minutes – both of which implied a dovish tone relating to accommodative monetary policy.

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Chinese trade balance data recorded a CNY 406.2 billion surplus in January 2016, as exports contracted by 11.2% year-on-year (y/y) and imports contracted by 18.8% y/y.

The ECB minutes showed that policymakers were concerned that the modest recovery in European markets was threatened by increasing risks to the global economy.

In the US, minutes from the last FOMC meeting released suggested that several participants maintained a dovish stance relating to future interest rate hikes, in light of deflationary risks and weak global growth.

Local economic data

The headline CPI annual inflation rate in January 2016 was 6.2%.

Measured in real terms, retail trade sales increased by 3.3% in 2015 compared with 2014.

South African wholesale trade sales increased by 2% in 2015 compared with 2014. In December 2015, wholesale trade sales increased by 0.6% y/y.

Measured in nominal terms (current prices), South African motor trade sales showed no growth in 2015 compared with 2014


Emerging market currencies have found short-term favour, as risk on sentiment supports a global market rebound. The rand outperformed its emerging market peers last week, furthering the suggestion that the domestic currency may be undervalued.

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The higher-than-expected inflation figure released in the week, has perhaps fuelled further speculation that the South African Reserve Bank may be more likely to raise lending rates at the next monetary policy meeting.

Markets will be anticipating the budget speech set for release by finance minister Pravin Gordhan on Wednesday.


Oil prices have started to rebound, following the proposed freezing of production by Organization of the Petroleum Exporting Countries (OPEC) leader Saudi Arabia, finding suggested support from OPEC and non-OPEC members alike. Iraq has agreed to the idea of finding ways to restore normal oil prices, while Iran has praised the proposed output freeze, although it’s not yet committed to slowing its own output.

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Precious metals gold and platinum, have started to offset some of their strong respective gains for the year thus far, while base metals undergo a much-needed rebound from oversold levels. Iron ore has benefited from trade balance data out of China, suggesting that imports for the steel-making ingredient had risen by 4.6% in January 2016.

Major moves

MTN and Gold Fields were among the worst-performing shares of the week, after both companies released earnings updates.

The MTN Group’s trading statement for the full year (FY) 2015, showed an expected decline of at least 20% in basic headline earnings per share, largely attributable to an underperformance in its Nigerian operations. The poor results expected exclude the $3.9 billion which is still being contested with the Nigerian authorities.

Gold Fields FY 2015 results revealed revenue to have decreased by 11%. All-in-sustaining costs for the year were reported at $1 007/oz. and operating profit of $1 089 million (vs $1 191 million FY 2014) was realised. The markets were also disappointed in the group’s guidance for the outlook in FY 2016. Losses in the counter would have been further exacerbated by a weaker pricing in the underlying price of gold.

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Company updates

Assore interim results showed headline earnings to have declined by 25.4% and a R2 per share interim dividend was declared.

Grindrod guided that it expects headline earnings for FY 2015 to be 20% to 25% lower than the prior year.

Truworths interim results showed diluted headline earnings per share (Heps) to have increased by 21.1% against the comparative interim period.

Discovery released an updated six-month trading statement in which normalised Heps (undiluted) were expected to be 0% to 5% higher and basic EPS 45% to 55% lower. Normalised Heps for the current period is impacted by the increase in total shares in issue, following implementation of the rights issue in April 2015.

Hulamin released a trading statement in which the company guided that it expects a 56% to 58% decline in its EPS for FY 2015 compared with FY 2014.

City Lodge Hotels interim results showed normalised diluted Heps to have increased by 18%, while a return on equity of 25% was realised.

Group Five interim results revealed revenue to have increased by 5.2% and operating profit by 41% against the prior year’s comparable period.

Impala Platinum released an interim trading statement in which it guided that Heps are expected to be 10% to 20% lower than the corresponding period.

Anglo American Plc FY results saw group revenue decline by 25.8% against the prior year’s comparative and posted a $5.4 billion loss before tax. The group also announced that it is looking to dispose of nearly two thirds of its assets (including Kumba Iron Ore) to strengthen its balance sheet.

Super Group interim results saw revenue soar 40% against the comparative period, largely attributable to the inclusion of the Allen Ford (UK) acquisition.

The Mondi Group expects FY 2015 results to reflect a 22% to 27% increase in basic Heps.

Tiger Brands expects turnover from continuing operations, for the four months ending January 31 2016, to have increased by 7%.

Santam released a trading statement guiding that it expects Heps for the year to have increased by 25% to 30% against the prior year’s comparative.

Murray & Roberts expects diluted Heps to have increased by 6% to 19% in the interim reporting period.

The Spur Corporation expects diluted EPS to have increased by 49% to 54% in the interim period. The increase was largely due to accounting in the prior period for the broad-based black economic empowerment equity transaction with Grand Parade Investments effected on October 30 2014.

Upcoming results




Aveng: Interim 2016




AECI: Full year 2015




Imperial Holdings: Interim 2016




Shoprite Holdings Ltd: Interim 2016




Wilson Bayly Holmes-Ovcon: Interim 2016




Adcock Ingram: Interim 2016




Grindrod Ltd: Full year 2015




Murray & Roberts: Interim 2016




RCL Foods Ltd: Interim 2016




Discovery Limited (South Africa): Interim 2016




Liberty Holdings: Full year 2015




Mondi Limited: Full year 2015




Massmart Holdings: Full year 2015




Sibanye Gold Ltd: Full year 2015




Impala Platinum Holdings Limited: Interim 2016




Northam Platinum: Interim 2016

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