Higher closes in international markets should feed through to the local front today, with a slightly stronger Rand and futures positive in Europe and the US. On focus this week is tomorrow’s big Fed meeting where we look to see if bond purchases will continue to go ahead at $80-billion plus per month, while there is a lot of economic data in between which will motivate how investors react to any news.
Key macro events today:
- US CPI excl. food & energy – exp:1.7% (14:30)
- Housing Starts – exp:950k (14:30)
- Building permits (14:30)
- SA Non-farm payrolls
- US stocks rallied, on better-than-forecast economic data and speculation the Fed will signal plans to maintain record low interest rates.
- Japanese stocks rebounded from yesterday’s plunge as U.S. data beat estimates and concerns eased the Fed will soon reduce stimulus.
- China’s stocks rose for the first time in nine days after valuations for the benchmark index dropped to a six-month low and U.S. retail sales beat forecasts.
- Gold up $8 and the rand 5 cent stronger from local close.
- Major economic data:
- 11:00: CPI – Euro
- 14:30: PPI – US
- 15:15: Industrial production – US
- 15:55: U. of Michigan confidence – US *Ex div. today: AFP,BSR,BATP,DIA,DIB,HCI,MDC,MPC,RBA,RLO,RTOP,TDH,VKE,WIL
- Local market should open up(+0.4%)after world markets recovered overnight.
- US stocks fell, with the Dow Jones posting its first three-day losing streak this year, as investors weighed prospects for economic growth and the pace of Federal Reserve stimulus measures.
- Japan’s Nikkei 225 plunged 5.6%,falling 19% from a recent high and close to entering a bear market again, as the yen rose to its strongest against the dollar in more than two months.
- A gauge of Chinese stocks in Hong Kong fell 20% from this year’s high, heading for the lowest since September 2012, as the World Bank cut its global growth forecast amid signs China’s economy is slowing. The Hang Seng China Enterprises Index, also known as the H-Share index, plunged 3.8%.
- Rand 7 cents weaker, and gold $2 lower from local close
- Major economic data today:
- 14:30: Retail sales – US
- 14:30: Jobless claims – US
- Local market should open down(-0.4%),following the sell-off in Asia this morning.
The JSE All Share Index dropped 3.21% on Tuesday 11th June, with the Rand hedge resource stocks failing to counter losses in shares such as Richemont and Naspers, which lost 3.44% and 2.1% respectively
- South African Mining production fell 0.4% year on year in April after a revised 3.8% (3.5%) year on year decrease in March, according to Statistics SA.
- The main contributors to the 0.4% decrease were Platinum Group Metals (contributing -2.8 percentage points) and ‘other’ metallic minerals (contributing -1.2 percentage points)
- Seasonally adjusted mining production increased by 3.4% in April 2013 compared with March 2013
- Manufacturing production rose 7.0% year on year (y/y) in April from a 2.2% year-on-year decline in March‚ according to Statistics SA.
- Economists have warned that local consumers should brace themselves for increases in food and fuel over the upcoming months as disposable income comes under pressure from, higher inflation due to a sustained weaker rand.
- Mr Price has been named as the overall winner of the IAS (Investment Analysts Society) awards for 2012.
- There are nine sector awards to the companies that come out top in excellence in financial reporting and communications in the main sectors of the JSE Board.
- The overall winner is selected from all the sector winners.
Company Results/ Trading Statement
Naspers – Trading Statement
- Shareholders are advised that the Naspers group is presently finalising its provisional report for the year ended 31 March 2013.
- Core headline earnings per share are expected to be between 15% and 25% higher than the comparable period’s R18.50.
- Majority of their core headline earnings are generated from operations offshore. As a consequence, the currency translation effect of the depreciation of the Rand relative to the prior period will play a significant role in boosting expected core headline earnings growth.
- Headline earnings per share for the period are expected to be between 25% and 35% higher than the prior period’s R12.97.
- It is expected that earnings per share for the year ended 31 March 2013, will be between 100% and 110% higher compared to the prior period’s 770 cents.
- This is a consequence of the book profit flowing from Mail.ru’s sale of a portion of its shares in Facebook, which is non-recurring.
- Mediclinic International Ltd – LDT, 13th June (Pay Date, 24th June)
- Paying R0.605
- Mr Price Group Ltd – LDT, 13th June (Pay Date, 24th June)
- Pik n Pay Stores Ltd – LDT, 7th June (Pay Date, 18th June)
- Pik n Pay Holdings Ltd – LDT, 7th June (Pay Date, 18th June)
- Tigerbrands – LDT, 21st June (Pay Date, 1st July)
The Nikkei Index traded lower on Wednesday, extending Tuesday’s losses, as investors were disappointed by the Bank of Japan’s failure to control volatility in the bond market, which began when the central bank initiated its stimulus program in April.
Hong Kong markets are closed for the Dragon Boat Festival holiday on Wednesday.
European markets are expected to open lower on Wednesday, as investors are kept on edge with the sell-off set to continue on concerns that the U.S. Federal Reserve could soon ease back its stimulus measures.
According to the CNN Money website, U.S. markets closed sharply lower in choppy trade on Tuesday, with the Dow Jones Industrial Average, the S&P 500, and the NASDAQ Composite all starting the day deep in negative territory before bouncing to end between 0.8% and 1% lower.
The Business Day reports that the JSE slumped lower in a broad-based sell-off on Tuesday, with the Rand hedge resource stocks failing to counter losses in shares such as Richemont and Naspers, which lost 3.44% and 2.1% respectively.
The Rand was last trading firmer at R9.9573 against the Dollar, with the Pound at R15.5765, while the Euro was also quoted stronger at R13.2687.
The gold price has edged lower for a second straight day on Wednesday, with a holiday in China depriving the precious metal of strong support, while investors are also concerned about global central banks possible easing back on their easy monetary policies. Gold was last trading lower at $1 378.10, with the platinum price quoted at $1 485.00, while the palladium price was trading at $754.60.
The Brent crude oil price was last trading slightly lower at $102.34 a barrel.