Johannesburg 31B Impala Road Chislehurston Sandton +27(0) 11 290 7800 Durban Unit 8, 8 Richefond Circle, Ridgeview, Umhlanga Ridge, 4319 +27(0) 31 584 6491 Cape Town Unit 11, Lonsdale Building, 7 Lonsdale Way, Pinelands, 7405 +27(0) 21 528 9900 Weekly Market Report 03 September 31 August 1W% YTD % Key Global Indices Close Change Change JSE All Share 58668.48-0.2% -1.4% FTSE 100 7432.42-1.9% -3.3% DAX 30 12364.06-0.2% -4.3% CAC 40 5406.85-0.5% 1.8% DJIA 25964.82 0.7% 5.0% S&P 500 2901.52 0.9% 8.5% NASDAQ Comp. 8109.54 2.1% 17.5% Nikkei 225 22865.15 1.2% 0.4% Shanghai Comp 2725.25-0.2% -17.6% S&P/ASX 200 6319.50 1.2% 4.2% South African Equity Markets South African markets ended lower last week. Telecommunication company, MTN Group plunged 15.2%, after the Nigerian central bank claimed $8.10 billion back from the firm. Transportation & Logistics company, Grindrod dropped 4.3%, after it reported a decline in its 1H revenues. Retailer, Mr Price Group declined 6.6%, despite reporting growth in the company s retail sales and other income during the first four months of the financial year. On the flipside, retailer, Steinhoff International Holdings jumped 21.2%, after it released a sales update that indicated growth in revenue for the nine months to end-june. Super Group rallied 15.9%, as it reported a significant increase in its FY revenues. Investment holding companies, Niveus Investments and Reinet Investments climbed 19.6% and 8.4%, respectively. The JSE All Share Index declined 0.2% to close at 58,668.48. JSE All Share - Weekly JSE All Share - Daily Chart -18.1% ArcelorMittal South Africa Ltd Group Five Ltd 53.4% 63,314 60,079-15.2% MTN Group Ltd Steinhoff International Holdings NV 21.2% 56,845 53,610-13.6% Net 1 UEPS Technologies Inc Niveus Investments Ltd 19.6% 50,376 100 RSI (21) -11.0% EOH Holdings Ltd Super Group Ltd 15.9% 50-8.6% Pallinghurst Resources Ltd Trustco Group Holdings Ltd 13.8% -58.8% -29.4% 0.0% 29.4% 58.8% Top 10 New 52 Week Highs 0 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Top 10 New 52 Week Lows Share 52Week High (ZAR) 1W% Change Anglo American Platinum Ltd 434.65 1.7% BHP Billiton Plc 322.39 3.8% Cie Financiere Richemont SA 133.61 3.9% Mondi Ltd 414.68 4.0% Mondi Plc 413.71 4.5% Old Mutual Ltd 31.64-0.2% Raubex Group Ltd 24.00-3.3% Sasol Ltd 581.38 5.3% Stenprop Ltd 22.00 3.8% Trustco Group Holdings Ltd 13.49 13.8% Share 52Week Low (ZAR) 1W% Change AfroCentric Investment Corp Ltd 4.53 2.4% Attacq Ltd 15.90-0.6% MTN Group Ltd 80.61-15.2% Rebosis Property Fund Ltd 7.02 1.1% ANALYST CERTIFICATION AND REQUIRED DISCLOSURES BEGIN ON PAGE 8 1
Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Weekly Market Report Key Currencies 31 August Close 1W% Change YTD % Change USDZAR 14.6887 3.8% 18.6% EURZAR 17.0405 3.1% 14.7% GBPZAR 19.0334 3.9% 13.8% EURUSD 1.1602-0.2% -3.4% EURCHF 1.1242-1.6% -3.9% GBPUSD 1.2960 0.9% -4.1% USDJPY 111.03-0.2% -1.5% USDCHF 0.9689-1.5% -0.6% AUDUSD 0.7189-1.9% -7.9% USDCAD 1.3040 0.1% 3.7% Daily USD/ZAR 16 15 14 12 11 Currencies The ZAR weakened against its major peers last week. On the data front, South Africa posted a trade deficit in July. Additionally, annual private sector credit rose less than market expectations in July. Meanwhile, the nation s producer price index (PPI) recorded a more-than -expected rise on an annual basis in July. Moreover, M3 money supply climbed more than market forecast on a yearly basis in July. Separately, S&P Global Ratings stated that SA s sovereign credit ratings were unlikely to be downgraded deeper into junk territory, as the country s external metrics were solid and that its monetary flexibility was a credit strength. For the week, the USD strengthened 3.8% against the South African Rand to close at R14.6887. The EUR was 3.1% higher at R17.0405 and the GBP was 3.9% stronger at R19.0334 for the week. The US Dollar traded mostly higher against its key counterparts last week. Data indicated that the US economy accelerated at a faster-than-expected pace on a quarterly basis in 2Q18, recording its biggest growth in four years. Moreover, consumer confidence index surprisingly advanced in August, recording its highest level since October 2000. Additionally, the US consumer spending rose in line with market expectations on a monthly basis in July. Further, the personal consumption expenditure price index advanced in line with market forecast on a monthly basis in the same month. In contrast, the nation s advance goods trade deficit widened more than market expectations in July. The EUR dropped against the USD last week. On the macroeconomic front, Eurozone s consumer price index rose less-than-expected on an annual basis in August. Moreover, business climate indicator declined more than market expectations in August. Meanwhile, the consumer confidence index fell in line with market forecast in August. Separately, Germany s GfK consumer confidence index unexpectedly dropped in September. The GBP rose against the USD in the previous week, after the European Union (EU) Chief negotiator, Michel Barnier, stated that the EU will offer Britain a unique deal. Data revealed that UK s net consumer credit rose at its weakest pace since November 2015 in July. Moreover, Nationwide house price index recorded an unexpected decline on a monthly basis in August, marking its biggest drop since July 2012. Key Commodities 31 August Close 1W% Change YTD % Change Gold ($/oz) 1203.62-0.1% -7.6% Silver ($/oz) 14.56-2.3% -15.1% Copper (USd/lb.) 2.65-1.9% -19.7% Brent Crude ($/bls) 77.64 2.4% 16.1% Sugar No.11 (USd/lb.) 10.60 3.6% -30.1% Iron Ore 62% Fe ($/dry MT) 62.02-0.3% -12.4% Daily Platinum 1,080 990 Commodities Gold prices declined last week, amid strength in the US Dollar. Looking ahead this week, market participants will closely watch the US trade balance, MBA mortgage applications, Markit manufacturing and services PMI along with ADP employment change, initial jobless claims and change in non-farm payrolls for further direction. Crude oil prices advanced last week, led by expectations of a tighter global oil supply, following implementation of US sanctions on Iran. Additionally, the US Energy Information Administration reported that crude oil inventories fell more than market forecast by 2.6 million bls in the week ended 24 August. Meanwhile, the American Petroleum Institute reported that crude oil inventories rose 38,000 bls last week. Moreover, Baker Hughes reported that US oil rig count advanced by 2 to 862 last week. Copper prices traded in negative territory last week, amid worries over demand from top consumer, China, as a state planning official stated that there were increasing risks to the nation s growth in the second half of the year. 899 808 718 2
Key Economic News Last Week Country News South Africa has registered trade deficit of R4.70 billion in July, from a revised surplus of R12.90 billion in the previous month. South Africa The PPI registered a rise of 6.1% on an annual basis in July, more than market expectations. In the previous month, the PPI had registered a rise of 5.9%. Private sector credit recorded a rise of 5.41% on an annual basis in July, less than market expectations. The private sector credit had risen 5.68% in the previous month. M3 money supply climbed 6.0% on an annual basis in July, more than market expectations and compared to a rise of 5.77% in the prior month. Economic Calendar - Week Ahead Monday, September 03, Tuesday, September 04, Wednesday, September 05, Thursday, September 06, Friday, September 07, Naamsa Vehicle Sales (Aug) Gross Domestic Product (Jun) Standard Bank South Africa PMI (Aug) Current Account to GDP (Jun) Gross Gold & Forex Reserve (Aug) South Africa PMI Manufacturing (Aug) - - Current Account Balance (Jun) - - - Electricity Production (Jul) - Net Gold & Forex Reserve (Aug) - - - Electricity Consumption (Jul) - 3
South African Corporate News Company Name Adcock Ingram Holdings Advtech Allied Electronics Bell Equipment Brimstone Investment Corporation Cartrack Holdings Cashbuild Caxton and CTP Publishers and Printers News The company, in its FY results, stated that its revenue increased to R6.56 billion from R5.96 billion posted in the corresponding period of the previous year. Its diluted EPS rose 24.0% from the same period of the prior year to 383.60c. The company has declared a total dividend of 172.00c per share, an increase of 24.0% from the corresponding period of the preceding year. Separately, the company announced changes to Directors responsibilities relating to the HR, Remuneration and Nominations Committee (the Committee), with effect from 28 August. Ms Nompumelelo Mpumi Madisa has been appointed as a member of the Committee. Further, Mr Mpho Makwana will step down as the Chairman of the Committee and continue to serve as its member and Ms Lulama Boyce has been appointed as the Chairperson of the Committee. The company, in its 1H results, indicated that its revenue rose to R2.26 billion from R2.00 billion posted in the corresponding period of the previous year. Its diluted EPS decreased 9.0% from the same period of the prior year to 34.80c. The company has declared a total dividend of 15.00c per share, the same as the preceding year. The company announced in an update on the acquisition by Altron of the entire issued share capital of is Partners Proprietary Limited including its primary subsidiaries, Karabina Solutions Proprietary Limited and Zetta Business Solutions Proprietary Limited that all conditions precedent to the transaction as set out in the Share Sale Agreement have either been fulfilled or waived, as the case may be. Accordingly, the transaction is now unconditional in accordance with the terms of the agreement, with the effective date being 1 September. The company, in its 1H results, indicated that its revenue rose to R3.72 billion from R3.50 billion in the same period of the previous year. Its diluted EPS stood at 132.00c compared with 119.00c recorded in the corresponding period of the preceding year. The company has declared an annual dividend of 20.00c per share. The company in its 1H results, indicated that its revenue increased to R1.37 billion from R1.31 billion posted in the corresponding period of the prior year. Its diluted loss per share stood at 117.70c compared with 101.60c recorded in the same period of the previous year. The company has not declared an interim dividend for the period. Separately, the company announced that its subsidiary, Sea Harvest Group Limited, has acquired the entire issued share capital of Ladismith Cheese Company Proprietary Limited for a purchase consideration of R527.00 million, in cash through its wholly-owned subsidiary, Cape Harvest Food Group Proprietary Limited. The company announced the appointment of Sharoda Rapeti as an independent Non-Executive Director to the Board of Directors with immediate effect. The company, in its FY results, stated that its revenue increased to R10.21 billion from R9.73 billion posted in the corresponding period of the previous year. Its diluted EPS fell 10.0% from the same period of the prior year to 1,851.30c. The company has declared a final dividend of 346.00c per share compared with 390.00c per share recorded in the comparable period of the preceding year. The company, in its FY results, indicated that its revenue declined 1.1% from the same period of the previous year to R6.33 billion. Its diluted EPS stood at 98.50c compared with 112.20c recorded in the corresponding period of the preceding year. The company has declared a dividend of 60.00c per share compared with 70.00c per share posted in the same period of the prior year. Drdgold The company, in its FY trading statement, indicated that the company expects headline earnings per share to be in the range of 1.53c to 1.87c, from 0.20c in the same period of the preceding year. Further, the company expects earnings per share to be between 1.18c and 1.82c, a fall of 63.0% to 43.0%, compared with the corresponding period of the previous year. emedia Holdings The company announced that Mr Andre van der Veen has announced his resignation from his position as Chief Executive Officer of the company and of the Board of Directors with effective from the 30th November. Further, Khalik Sherrif, current Deputy Chief Executive Officer, has been appointed to the position of Chief Executive Officer. Gold Fields The company announced the appointment of Phuti Mahanyele as independent Non-Executive Director to the Board with effect from 1 September. Grindrod Limited Grindrod Shipping Holdings Group Five The company, in its 1H results, revealed that its revenue advanced to R1.55 billion from R1.48 billion posted in the same period of the preceding year. Its diluted EPS stood at 46.30c, compared with 45.20c recorded in the corresponding period of the previous year. The company has not declared an interim dividend for the period. The company, in its 1H results, indicated that its revenue declined to $150.84 million from $194.05 million in the same period of the previous year. Its diluted loss per share stood at 0.71c compared with 0.36c recorded in the corresponding period of the preceding year. The company has declared an interim dividend of $334.60 per share. The company, in its FY trading statement, indicated that the company expects headline loss per share to be in the range of 1,300.00c to 1,450.00c, an increase of 52.4% to 70.0% from the same period of the preceding year. Further, the company expects loss per share to be between 1,300.00c and 1,450.00c, a rise of 56.8% to 74.9%, compared with the corresponding period of the previous year. 4
South African Corporate News Company Name Growthpoint Properties Heriot REIT Homechoice International Hyprop Investments Master Drilling Group News The company, in its FY results, revealed that its revenue advanced to R10.93 billion from R10.76 billion posted in the same period of the preceding year. Its diluted EPS stood at 228.00c, compared with 266.21c recorded in the corresponding period of the previous year. The company declared a final dividend of 208.60c per share, representing a 6.5% growth from the comparable period of the prior year. The company, in its 1H results, stated that its revenue rose to R4.44 billion from R4.09 billion posted in the corresponding period of the previous year. Its diluted EPS rose to 70.44c from 64.97c recorded in the same period of the prior year. The company has declared a final dividend of 44.18c per share. The company, in its 1H results, indicated that its revenue rose to R1.52 billion from R1.31 billion posted in the corresponding period of the previous year. Its diluted EPS stood at 245.80c from 215.60c in the same period of the prior year. The company has declared an interim dividend of 95.00c per share for the period. The company announced the appointment of Brett Till as Financial Director of the company with effect from 1 October. Separately, the company, in its FY results, indicated that its revenue fell to R3.11 billion from R3.17 billion posted in the corresponding period of the previous year. Its diluted EPS decreased to 1,015.00c from 1,110.80c recorded in the same period of the prior year. The company has declared a total dividend of 756.50c per share, an increase of 8.8% from the same period of the preceding year. For FY 2019, the company expects dividend to grow in the range of 5.0% to 7.0%. The company, in its 1H results, stated that its revenue rose to $67.38 million from $60.51 million posted in the corresponding period of the previous year. Its diluted EPS stood at 6.2c from 6.5c in the same period of the prior year. MMI Holdings The company announced that Ms Maliga Chetty has resigned as the Company Secretary with effect from 30 September. Mr Price Group Murray & Roberts Holdings Net 1 UEPS Technologies Northam Platinum Old Mutual Onelogix Group RCL Foods The company, in its trading update, stated that the company recorded a 7.4% increase in its retail sales and other income compared with the corresponding period of the prior year. Its total retail sales grew to R6.90 billion, a 6.5% rise from the same period of the previous year. Further, the company s South African sales increased 6.4% and sales in non-south African stores advanced 9.1% for the period. The company, in its FY results, stated that its revenue rose to R21.85 billion from R21.40 billion posted in the same period of the preceding year. Its diluted EPS stood at 134.00c compared with 74.00c recorded in the corresponding period of the previous year. The company declared a total dividend of 50.00c per share compared to 45.00c per share posted in the comparable period of the prior year. Separately, the company announced that it has been awarded new underground mining projects to the total value of R3.60 billion. It includes the Pumpkin Hollow underground project in Nevada for Nevada Copper Corporation, where the scope of work will include shaft sinking and underground mine development work and a shaft sinking project on a copper mine in South Africa. These projects will be delivered over a period of up to three years. The company, in its FY results, indicated that its revenue rose to $612.89 million from $610.07 million posted in the corresponding period of the previous year. Its diluted EPS decreased to $0.69 from $1.33 recorded in the same period of the prior year. The company, in its FY trading statement, indicated that the company expects headline loss per share and loss per share to be between 185.90c and 216.00c, respectively compared to a headline loss per share and loss per share of 181.90c and 181.80c, respectively, recorded in the corresponding period of the preceding year. Further, in its FY operational update, the company stated that the value of excess inventory amounted to R2.10 billion, with an estimated sales value of R2.50 billion. The company, in its 1H results, stated that its revenue decreased to R67.87 billion from R75.61 billion posted in the corresponding period of the previous year. Its diluted EPS rose to 125.90c from 53.40c recorded in the same period of the prior year. The company has declared an interim dividend of 45.00c per share. For FY, the company expects to achieve all of its financial targets. The company, in its FY results, indicated that its revenue rose to R2.31 billion from R1.99 billion in the same period of the previous year. Its diluted EPS stood at 38.0c compared with 23.4c recorded in the corresponding period of the preceding year. The company has declared an annual dividend of 11.00c per share. The company, in its FY results, stated that its revenue fell to R24.43 billion from R24.95 billion posted in the corresponding period of the previous year. Its diluted EPS stood at 104.1c from 59.2c in the same period of the prior year. The company has declared a final dividend of 25.0c per share in the period. Santam Limited The company, in its 1H results, reported that its revenue advanced 13.0% from the same period of the preceding year to R15.59 billion. Its diluted EPS stood at 1,009.00c, compared with 677.00c recorded in the corresponding period of the previous year. The company has declared an interim dividend of 363.00c per share compared with 336.00c per share posted in the same period of the prior year. Separately, the company has increased its effective interest in Saham Finances, held indirectly through SAN JV to 10.0% from 7.0%. 5
South African Corporate News Company Name Sea Harvest Group Shoprite Holdings Steinhoff International Holdings NV Super Group News The company, in its 1H results, stated that its revenue fell to R1.00 billion from R1.06 billion posted in the corresponding period of the previous year. Its diluted EPS stood at 45.9c from 66.1c in the same period of the prior year. The company announced that Prof Shirle+y Zinn has been appointed as an independent Non-Executive Director with immediate effect. The company announced that the company and the third-party creditors under the Hemisphere s 750.00 million revolving credit facility are continuing discussions on implementation of the restructuring of the financial indebtedness of Hemisphere. The parties to the Hemisphere LUA are now seeking to execute the material documents required to implement the Hemisphere Restructuring by 31 August. The company, in its FY results, indicated that its revenue rose to R35.66 billion from R29.87 billion recorded in the same period of the preceding year. Its diluted EPS increased to 319.90c from 282.60c posted in the corresponding period of the previous year. The company has not declared a final dividend for the period. Trencor Limited The company, in its 1H trading statement, indicated that the company expects headline loss per share to be at least 722.50c, 400.0% higher compared to the same period of the previous year. Further, the company expects EPS to be at least 4,867.00c, an increase of 200.0% compared with the corresponding period of the preceding year. Wilderness Holdings The company announced that Michael Tollman and Gavin Tollman have resigned as Non-Executive Directors with effect from 23 August. 6
Bearish Alerts Bullish Alerts Weekly Market Report Technical Alerts Name Ticker Currency Last Close % Chg Signal South32 Ltd S32 SJ ZAr 3674 1.35% MA 20D crossover Anglo American Plc AGL SJ ZAr 29673 3.03% MA 20D crossover Delta Property Fund Ltd DLT SJ ZAr 611-2.24% Lower Bollinger crossunder Kumba Iron Ore Ltd KIO SJ ZAr 26509-3.21% Stochastic indicates oversold Name Ticker Currency Last Close % Chg Signal PSG Konsult Ltd KST SJ ZAr 970 0.00% MA 20D crossunder Arrowhead Properties Ltd AWA SJ ZAr 588 2.62% MA 20D crossunder Redefine International Plc/Isle Of Man RPL SJ ZAr 647 3.52% Upper Bollinger crossover DataTec Ltd DTC SJ ZAr 2358 7.18% Stochastic indicates overbought 7
Research Disclosure NOTICE TO US INVESTORS This report was prepared, approved, published and distributed by Afrifocus Securities (Pty) Ltd located outside of the United States (a non- US Group Company ). This report is distributed in the U.S. by LXM LLP USA, a U.S. registered broker dealer, on behalf of Afrifocus Securities (Pty) Ltd only to major U.S. institutional investors (as defined in Rule 15a-6 under the U.S. Securities Exchange Act of 1934 (the Exchange Act ) pursuant to the exemption in Rule 15a-6 and any transaction effected by a U.S. customer in the securities described in this report must be effected through LXM LLP USA. Neither the report nor any analyst who prepared or approved the report is subject to U.S. legal requirements or the Financial Industry Regulatory Authority, Inc. ( FINRA ) or other regulatory requirements pertaining to research reports or research analysts. No non-us Group Company is registered as a broker-dealer under the Exchange Act or is a member of the Financial Industry Regulatory Authority, Inc. or any other U.S. self-regulatory organization. Analyst Certification. Each of the analysts identified in this report certifies, with respect to the companies or securities that the individual analyses, that (1) the views expressed in this report reflect his or her personal views about all of the subject companies and securities and (2) no part of his or her compensation was, is or will be directly or indirectly dependent on the specific recommendations or views expressed in this report. Please bear in mind that (i) Afrifocus Securities (Pty) Ltd is the employer of the research analyst(s) responsible for the content of this report and (ii) research analysts preparing this report are resident outside the United States and are not associated persons of any US regulated broker-dealer and that therefore the analyst(s) is/are not subject to supervision by a US broker-dealer, and are not required to satisfy the regulatory licensing requirements of FINRA or required to otherwise comply with US rules or regulations regarding, among other things, communications with a subject company, public appearances and trading securities held by a research analyst account. Important US Regulatory Disclosures on Subject Companies. This material was produced by Analysis Afrifocus Securities (Pty) Ltd solely for information purposes and for the use of the recipient. It is not to be reproduced under any circumstances and is not to be copied or made available to any person other than the recipient. It is distributed in the United States of America by LXM LLP USA and elsewhere in the world by Afrifocus Securities (Pty) Ltd or an authorized affiliate of Afrifocus Securities (Pty) Ltd. This document does not constitute an offer of, or an invitation by or on behalf of Afrifocus Securities (Pty) Ltd or its affiliates or any other company to any person, to buy or sell any security. The information contained herein has been obtained from published information and other sources, which Afrifocus Securities (Pty) Ltd or its Affiliates consider to be reliable. None of Afrifocus Securities (Pty) Ltd accepts any liability or responsibility whatsoever for the accuracy or completeness of any such information. All estimates, expressions of opinion and other subjective judgments contained herein are made as of the date of this document. Emerging securities markets may be subject to risks significantly higher than more established markets. In particular, the political and economic environment, company practices and market prices and volumes may be subject to significant variations. The ability to assess such risks may also be limited due to significantly lower information quantity and quality. By accepting this document, you agree to be bound by all the foregoing provisions. LXM LLP USA assumes responsibility for the research reports content in regards to research distributed in the U.S. LXM LLP USA or its affiliates has not managed or co-managed a public offering of securities for the subject company in the past 12 months, has not received compensation for investment banking services from the subject company in the past 12 months, does not expect to receive and does not intend to seek compensation for investment banking services from the subject company in the next 3 months. LXM LLP USA has never owned any class of equity securities of the subject company. There are not any other actual, material conflicts of interest of LXM LLP USA at the time of the publication of this research report. As of the publication of this report LXM LLP USA, does not make a market in the subject securities. 8