Weekly Market Report. South African Equity Markets. JSE All Share - Daily Chart. JSE All Share - Weekly Gainers & Losers. Top 10 New 52 Week Lows

Transcription

1 Johannesburg 31B Impala Road Chislehurston Sandton +27(0) Durban Unit 8, 8 Richefond Circle, Ridgeview, Umhlanga Ridge, (0) Cape Town Unit 11, Lonsdale Building, 7 Lonsdale Way, Pinelands, (0) Weekly Market Report 22 October October 1W% YTD % Key Global Indices 2018 Close JSE All Share % -12.5% FTSE % -8.3% DAX % -10.6% CAC % -4.3% DJIA % 2.9% S&P % 3.5% NASDAQ Comp % 7.9% Nikkei % -1.0% Shanghai Comp % -22.9% S&P/ASX % -2.1% South African Equity Markets South African markets ended lower last week. Mediclinic International plunged 21.8%, following the company s announcement that it expects a decrease in its 1H 2019 all-round earnings. Calgro M3 holdings slumped 15.4%, as the firm expects a drop in its 1H 2018 earnings. In contrast, Clover Industries rallied 14.7%, after the firm announced that a third party was interested in acquiring its entire share capital. Retailer, Steinhoff International Holdings surged 10.0%, after Dutch investment firm, VEB, agreed to suspend its ongoing legal action against the firm until 3 April Intu Properties soared 9.7%, as the company indicated that a proposed deal to take it private, backed by a consortium comprising of the Peel Group, the Olayan Group and Brookfield Property Group, had been increased to 2.15 per share. The JSE All Share Index declined 2.6% to close at 52, JSE All Share - Weekly Gainers & Losers -21.8% Mediclinic International Plc Clover Industries Ltd 63, % 59,682 JSE All Share - Daily Chart -15.6% Capital & Regional Plc Steinhoff International Holdings NV 56, % 52, % Calgro M3 Holdings Ltd Intu Properties Plc 9.7% 48, RSI (21) -14.4% Raubex Group Ltd Pan African Resources Plc 8.3% % Astral Foods Ltd EOH Holdings Ltd 7.9% -24.0% -12.0% 0.0% 12.0% 24.0% Top 10 New 52 Week Highs 0 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Top 10 New 52 Week Lows Share 52Week High (ZAR) 1W% Adcorp Holdings Ltd % AngloGold Ashanti Ltd % Harmony Gold Mining Co Ltd % Old Mutual Ltd % Share 52Week Low (ZAR) 1W% Aspen Pharmacare Holdings Ltd % Ascendis Health Ltd % Blue Label Telecoms Ltd % British American Tobacco Plc % Caxton and CTP Publishers and Printers Ltd % Cie Financiere Richemont SA % Calgro M3 Holdings Ltd % Coronation Fund Managers Ltd % Curro Holdings Ltd % Grindrod Ltd % ANALYST CERTIFICATION AND REQUIRED DISCLOSURES BEGIN ON PAGE 7 1

2 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Weekly Market Report Key Currencies 19 October 2018 Close 1W% YTD % USDZAR % 16.4% EURZAR % 11.8% GBPZAR % 12.7% EURUSD % -4.1% EURCHF % -2.0% GBPUSD % -3.2% USDJPY % -0.1% USDCHF % 2.2% AUDUSD % -8.8% USDCAD % 4.2% Daily USD/ZAR Currencies The ZAR strengthened against its major peers last week. Moody s has indicated that it may upgrade South Africa s rating, if the nation successfully implements structural reforms that would raise economic growth and stabilise debt burden. On the data front, South Africa s retail sales recorded an unexpected rise on an annual basis in August, recording its highest level since May On the flipside, the nation s annual mining production declined more than market forecast in August. Additionally, gold production dropped on a yearly basis in August and platinum production recorded a fall on an annual basis in the same month. For the week, the USD weakened 0.7% against the South African Rand to close at R The EUR was 1.0% lower at R and the GBP was 1.3% weaker at R for the week. The US Dollar traded mostly higher against its key counterparts last week, following the release of hawkish US Federal Reserve (Fed) September meeting minutes. At the meeting, policy makers broadly agreed on the need to forge ahead with interest rate increases. On the data front, the US JOLTS job openings recorded an unexpected rise in August. Further, monthly industrial production jumped more than market expectations on a monthly basis in September. In contrast, housing related data releases last week showed that the US housing market continues to struggle despite strength across the broader economy. Existing home sales fell in September by the most in over two years. Permits for construction of new homes also fell during the same month. The EUR dropped against the USD last week, following disagreement between Italy and the European Union (EU) over the former's budget deficit. Data wise, the Eurozone s ZEW economic sentiment index declined in October. Additionally, final reading of the consumer price index (CPI) rose in line with market expectations on an annual basis in September. The GBP fell against the USD last week. On the Brexit front, the EU indicated its willingness to extend the length of the post-brexit transition if the UK wants to do so. Data revealed that British average weekly wages grew at the fastest pace since January 2009 in the three months to August. Further, the CPI advanced less than market expectations on a yearly basis in September. Key Commodities 19 October 2018 Close 1W% YTD % Gold ($/oz) % -5.9% Silver ($/oz) % -14.6% Copper (USd/lb.) % -15.8% Brent Crude ($/bls) % 19.3% Sugar No.11 (USd/lb.) % -8.4% Iron Ore 62% Fe ($/dry MT) % -2.4% Daily Platinum 1, Commodities Gold prices rose last week. Going ahead, investors will look forward to release of the Fed s Beige book report, along with preliminary reading of the US third quarter gross domestic product, house price index, new home sales, advance goods trade balance, durable goods orders and the Markit manufacturing and services PMI, for further direction. A slew of speeches by Fed officials are also scheduled this week. Crude oil prices declined last week, after the US Energy Information Administration (EIA) reported that crude oil inventories rose by 6.5 million bls in the week ended 12 October Additionally, Baker Hughes reported that US oil rig count rose by 4 to 873 last week. Further, the EIA forecasted that crude oil production from seven major US shale plays is expected to advance by 98,000 bls a day to million bls a day in November. Separately, tensions between the US and Saudi Arabia rose last week following the disappearance of a prominent Saudi journalist. Meanwhile, the American Petroleum Institute reported that crude oil inventories declined by 2.1 million bls last week. Copper prices traded in negative territory last week, led by escalating trade tensions between the US and the world s top industrial metals consumer, China

3 Key Economic News Last Week Country News Retail sales unexpectedly rose 2.5% on a yearly basis in August, compared to a rise of 1.3% in the prior month. South Africa Mining production recorded a drop of 9.1% on a yearly basis in August, more than market expectations. Mining production had recorded a revised drop of 4.1% in the prior month. Gold production dropped 15.5% on an annual basis in August. In the prior month, gold production had recorded a revised drop of 14.9%. Platinum production fell 7.0% on an annual basis in August. In the prior month, platinum production had registered a drop of 6.2%. Economic Calendar - Week Ahead Monday, October 22, 2018 Tuesday, October 23, 2018 Wednesday, October 24, 2018 Thursday, October 25, 2018 Friday, October 26, 2018 South Africa - Leading Indicator (Aug) Consumer Price Index (Sep) Producer Price Index (Sep) - 3

4 South African Corporate News Company Name Adcorp Holdings Afrimat News The company, in its 1H 2018 results, stated that its revenue increased to R7.97 billion from R7.75 billion posted in the corresponding period of the previous year. Its diluted EPS stood at 87.30c compared with a diluted loss per share of c recorded in the same period of the prior year. For FY 2018, the company expects to stabilise operations, stem losses from its training business and unlock short -term wins as the company develops a blueprint for its future. Separately, the company announced that Mr Monde Nkosi has been appointed as an alternate Non-Executive Director to Mr Samuel Sithole with effect from 19 October The company, in its 1H 2018 trading statement, revealed that the company expects HEPS and EPS to be between 92.00c per share and 97.00c per share, which is 5.0% to 11.0% lower compared with the corresponding period of the previous year. Allied Electronics Corporation BHP Billiton Calgro M3 Holdings Cartrack Holdings Cashbuild Combined Motor Holdings DataTec Dis-Chem Pharmacies enx Group Famous Brands KAP Industrial Holdings Long4life Mediclinic International The company announced that Mr Tim Jacobs has resigned as acting Chief Financial Officer (CFO) of the company, effective from 19 October Mr Andrew Holden, the current Chief Operating Officer (COO) will assume the joint role of COO and acting CFO. The company, in its operational review for the quarter ended 30 September 2018, stated that copper production increased by 2.0% for the period, despite maintenance across a number of operations. Full year production guidance remains unchanged for petroleum, iro n ore, metallurgical coal and energy coal. In petroleum, the Victoria-1 and Bongos-2 exploration wells in Trinidad and Tobago and the Samurai-2 well in the US Gulf of Mexico, encountered hydrocarbons. Further, the onshore US sale process is progressing as per the plan and is expected to be completed by the end of October The company, in its 1H 2018 trading statement, revealed that it expects HEPS to be 3.11c per share compared to 47.71c per share reported in the previous corresponding period. Further, it expects EPS to be between 23.78c per share compared to cents per share, as reported in the previous corresponding period. The company, in its 1H 2018 trading statement, indicated that it expects both HEPS and EPS to be between 56.00c and 60.00c, w hich is 20.0% to 30.0% higher compared with the same period of the previous year. The company, in its 1Q 2019 operational update, stated that its revenue rose 3.0% compared with the same period of the prior year. Transactions for the company decreased by 1.0%. Selling inflation was 3.0% for the quarter ending September 2018 compared with the corresponding period of the previous year. Further, gross profit margin percentage for the company is currently slightly lower than the same quarter of the prior year. The company, in its 1H 2018 results, stated that its revenue increased to R5.57 billion from R5.12 billion posted in the corresponding period of the previous year. Its diluted EPS stood steady at 127.8c. The company has declared an interim dividend of 61.00c per share. The company, in its 1H 2018 results, indicated that its revenue rose to R2.00 billion from R1.84 billion posted in the corresponding period of the previous year. Its diluted EPS stood at 0.70c compared with a loss per share of 14.30c recorded in the same period of the prior year. The company has not declared an interim dividend for the period. The company, in its 1H 2018 results, stated that its revenue increased to R10.46 billion from R9.57 billion posted in the cor responding period of the previous year. Its diluted EPS stood at 51.7c from 46.8c in the same period of the prior year. The company has declared an interim dividend of 20.69c per share. The company, in its FY 2018 trading statement, revealed that it expects HEPS to be between c per share and c per share, which is 2.1% to 4.9% higher compared with the corresponding period of the previous year. Further, it expects EPS to be between c per share and c per share, which is 140.0% to 144.0% higher compared with the corresponding period of the previous year. The company, in its 1H 2018 trading statement, revealed that the company expects HEPS to be between c and c, an i ncrease of 3.0% to 14.0% compared with the same period of the previous year. Further, the company expects loss per share to be in the range of c to c, which is 431.0% to 465.0% lower compared with the corresponding period of the preceding year. The company announced that Mr DM van der Merwe, who served on the Board since 2005, has given notice of his intention not to stand for re-election at the company s forthcoming annual general meeting on 13 November 2018 in terms of the company s rotation cycle, as a result of his various other commitments outside of the group. The company announced that Ms Mireille Levenstein has been appointed as an Executive Director with immediate effect and will assume the role of CFO of the Group with effect from 1 November The company, in its 1H 2019 trading update, indicated that in constant currency, its revenue was up 2.0% and adjusted EBITDA was down around 4.0%. On a reported basis, 1H 2019 revenue was down around 1.0% at 1.40 billion and adjusted EBITDA declined around 8.0% to 0.21 billion. Adjusted EPS is expected to be 10.00p compared with 11.30p recorded in the same period of the previous year. Further, the company has completed the refinance of its Southern African and Middle East borrowing facilities, initially extending both terms by up to 5 years. 4

5 South African Corporate News Company Name Merafe Resources Mr Price Group MTN Group News The company, in its 3Q 2018 production report, indicated that its attributable ferrochrome production from the Glencore Merafe Chrome Venture increased by 20.0% in comparison to the quarter ended 30 September The company announced that Stuart Bird, who has been Chief Executive Officer (CEO) of the group since August 2010 and an Executive Director since September 2006, will be retiring from his role as CEO on 31 December 2018 and as an Executive Director at the end of March The Board has appointed Mark Blair, currently the CFO of the company, as the incoming CEO, effective 1 January The company, in its financial statements for the nine months ended 30 September 2018 for MTN Ghana, stated that its revenue i ncreased to GHS3.05 billion from GHS2.49 billion posted in the corresponding period of the previous year. Its basic EPS rose to GHS0.06 from GHS0.05 recorded in the same period of the prior year. The company has declared a gross interim dividend of GHS0.02 per share. Oceana Group The company, in its FY 2018 trading statement, indicated that it expects HEPS to be between c and c, which is 80.0% to 90.0% higher compared with the same period of the previous year. Further, the company expects EPS to be in the range of c to c, a 78.0% to 88.0% increase compared with the corresponding period of the preceding year. Pick n Pay Stores PSG Group Sasol Spear REIT Standard Bank Group Stenprop The company, in its 1H 2018 results, stated that its revenue increased to R42.29 billion from R39.69 billion posted in the corresponding period of the previous year. Its diluted EPS rose 21.4% from the same period of the prior year to c. The company has declared an interim dividend of 39.10c per share compared with 33.40c per share recorded in the comparable period of the preceding year. The company, in its 1H 2018 results, stated that its revenue fell to R6.66 billion compared with R7.01 billion posted in the same period of the previous year. Its diluted EPS stood at 5.07c compared with 3.78c recorded in the corresponding period of the preceding y ear. The company has declared an interim dividend of 1.52c per share compared with 1.38c per share posted in the comparable period of the prior year. The company, in its production and sales metrics for the three months ended 30 September 2018, stated that the company has seen higher productivity across most of its operations with an increased focus on safety, margins and cost control. The mining operations are building momentum with increased productivity over the past quarter and have fully restored the stock piles to above target levels. External purchases have significantly reduced, and current indications show that mining will achieve the targeted production levels of million tons for the full year. The company, in its 1H 2018 results, indicated that its revenue rose to R million from R million posted in the corresponding period of the previous year. Its diluted EPS stood at 58.20c compared with c recorded in the same period of the prior year. The company announced that Deutsche Securities Proprietary Limited has resigned as Independent Sponsor to the company on the JSE Limited, with effect from 15 October 2018 and JP Morgan Equities South Africa Proprietary Limited has accordingly been appointed as Independent Sponsor to the company. The company announced that it has acquired an industrial estate in Bridgwater, Somerset, in an off-market deal from a private investor for 4.8 million, which reflects a net reversionary yield of 6.9%. 5

6 Bearish Alerts Bullish Alerts Weekly Market Report Technical Alerts Name Ticker Currency Last Close % Chg Signal DataTec Ltd DTC SJ ZAr % MA 20D crossover Mr Price Group Ltd MRP SJ ZAr % MA 20D crossover Calgro M3 Holdings Ltd CGR SJ ZAr % Lower Bollinger crossunder Astral Foods Ltd ARL SJ ZAr % RSI indicates oversold Name Ticker Currency Last Close % Chg Signal Stenprop Ltd STP SJ ZAr % MA 20D crossunder Mpact Ltd MPT SJ ZAr % MA 20D crossunder Growthpoint Properties Ltd GRT SJ ZAr % Upper Bollinger crossover Afrimat Ltd AFT SJ ZAr % Stochastic indicates overbought 6

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