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Market highlights

See last week’s top movers and what to expect this week.

Last week, local blue chip counters had a positive trading week as evidenced by the extent of gains on the gainers list relative to the marginal extent of declines on the decliners list.

Weak US inflation data provided an expectation that US rates would remain on hold for an extended period and in turn be a boost for equity markets. This sentiment was later validated as the Federal Reserve kept rates on hold at the FOMC meeting.

South Africa’s current account, the broadest measure of trade in goods and services, eased to a deficit of -3.1% of gross domestic product from a revised -4.7% in the previous three months. A weaker rand helping curb the level of import demand into the country aided the improved deficit figure.

See last week’s top movers:

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Top gainers

SABMiller Plc experienced an intraday gain in excess of 20% last Wednesday, following news that slightly bigger rival, Anheuser-Busch Inbev, is interested in a possible buyout/merger with the company. Anheuser-Busch Inbev has placed no formal bid, although both companies have acknowledged the possibility of a deal. Together the two companies account for around a third of global beer sales.

AngloGold Ashanti has benefited from a slight rebound in the underlying price of gold following the decision by the US Federal Reserve not to raise interest rates at the FOMC meeting last week. AngloGold also announced that the company had concluded an investment agreement with Randgold Resources to redevelop and operate the Obuasi gold mine in Ghana. 

Top decliners

The Mondi bucked the relatively bullish trend in equity markets following a ratings downgrade from Goldman Sachs. Goldman downgraded the paper and packaging company to a ‘sell’ rating, citing the kraftliner market as a concern in terms of the group’s pricing power relative to an increased capacity within the segment expected over the next few years. 

The new week

The new week will see the South African Reserve Bank (Sarb) announcing changes (if any) to local lending rates at the conclusion of the Monetary Policy Committee meeting on Wednesday. Expectations for the meeting are divided between no change in interest rates and a marginal 25 basis point increase.

Markets will also look to ECB President Mario Draghi’s public address on Wednesday for any news relating to the economic health and further monetary stimulus in the euro area.

The end of the week will see the final gross domestic product revision released out of the US.

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