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Morning Note
24 April 2015
South Africa
Market Review
The JSE Africa All Share Index rose 0.7% on Thursday led by gains in
resources and basic materials stocks, partly offset by declines in gold
mining stocks. Market breadth was positive, with 89 gainers, 66 losers
and 15 stocks remaining unchanged.
Corporate News
Investec Australia Property Fund entered into an agreement with
SAS Trustee Corporation to acquire a new property at Glendenning for
AUD19.2m. The acquisition is in line with the fund’s strategy to invest
in high-quality assets. The acquisition will be funded from the existing
debt facility.
Earnings Announcement
Click Group’s revenue rose 14.2% y/y to R11.2bn for the six months
ended 28 February 2015, with 9.9% growth in retail sales and a 20.7%
rise in UPD. Profit for the period increased to R438.6m from R389.9m.
EPS rose to 182.2c from 158.5c, and HEPS increased to 183.5c from
the 159.4c reported in the prior comparable period. The company
declared an interim dividend of 65.5cps compared with 53.5cps in the
previous comparable period. LTD: 26 June
Kumba Iron Ore’s total production rose 7.0% y/y, while it fell 2.0% q/q
to 12.2m tonnes for the first quarter ended 31 March 2015. The
operating model’s implementation in the North mine continued to yield
improved productivity. Production at the Sishen mine decreased 4.0%
q/q to 8.9m tonnes, while production rose 9% q/q to 3.0m tones at
Kolomela. Export sales volume rose 19.0% y/y to 12.9m tonnes,
slightly better than expected.
Anglo American Platinum’s total equivalent refined platinum
production rose 50.0% y/y to 536.0k ounces for the quarter ended 31
March 2015. However, refined production was down 10% over the
preceding quarter. On a quarterly basis production at Rustenburg and
Mogalakwena was largely flat. Production at Union and Amandelbult
disappointed as result of safety stoppages. Production from the joint
venture operations was largely flat over the preceding quarter.
Anglo American Plc’s diamond production fell 8% q/q to 7.7m carats,
due to a change in mining area at the Venetia mine. Copper
production fell 2% q/q to 171ktons, led by a negative performance at
Collahausi due to the recent rain and flooding conditions in Chile.
Export metallurgical coal production rose 17.0% y/y to 5.0m tonnes,
while export thermal coal production rose 11.0% y/y to 8.7m tonnes.
Nickel production was flat q/q to 6,700 tonnes. In addition, the
company reduced its full year production guidance for diamonds,
which is a crucial part of the business.
MTN Group reported 1.8% q/q subscriber growth adding 4.1 million
subscribers for the quarter ended 31 March 2015. South Africa
experienced muted subscriber growth as a result of short term
challenges. South African data revenue experienced growth of 21.8%
y/y. Nigeria increased its subscriber base by 2.1% to 61.1m
subscribers. Nigerian data revenue grew 17.0% y/y, however total
minutes declined 2.4% y/y. Currency headwinds remain an issue with
Nigeria, given a weakening macro-economic environment. Mobile
Money continues to perform strongly.
Equity Market – JSE Indices
Close
23-Apr-15
22-Apr-15
% Chg
% YTD
54,687
48,411
43,066
24,430
1,335
46,982
46,636
67,600
17,088
17.23
54,282
47,998
41,955
23,889
1,352
46,824
46,423
67,669
17,052
17.49
0.7
0.9
2.6
2.3
(1.3)
0.3
0.5
(0.1)
0.2
(1.5)
9.9
10.1
2.7
6.8
16.6
14.7
(0.1)
6.9
21.3
(22.2)
All-Share Index
Top 40
Resources 10
Basic Materials
Gold Mining
Financials
Industrials
Cons Goods
Cons Services
Volatility
Top Daily Gainers and Laggards
Gainers
% Chg Laggards
Net 1 UEPS
Kumba Iron Ore
Allied Electronics
Lonmin Plc
Zeder Investments
9.4
8.3
8.0
6.0
4.0
% Chg
Hulamin
Cashbuild
Merafe Resources
Rhodes Food Group
Brait SE
(13.4)
(4.4)
(3.9)
(3.6)
(3.6)
All Share Index Performance
57 000
800
600
400
200
0
53 000
49 000
45 000
Apr-14
Jul-14
Oct-14
Jan-15
Volume (mn)
Apr-15
JSE - LHS
Government Bond Yields
Bonds
R204 (2018)
US 10 Year
US 30 Year
23-Apr-15
22-Apr-15
bps Chg
7.35
1.96
2.65
7.32
1.98
2.66
3.1
(2.1)
(0.9)
Economic & Money Market Data
Economic
CPI: March
PPI: February
M3: February
PSCE: February
Trade: February(ZARbn)
Reserves: March (USDbn)
Kagiso Manu. PMI : March
Retail Sales : February
% Y/Y
4.0
2.6
8.1
8.7
(8.5)
41.3
47.9
4.2
Interest rates
JIBAR 3m
JIBAR 6m
JIBAR 1yr
T-Bill 3m
T-Bill 1yr
Repo rate
Prime
Sabor
%
6.12
6.83
7.45
5.89
6.18
5.75
9.25
5.71
Sasfin Securities Money Broking Rates (%)
R 50,000 - R 99,999
R 100,000 - R 249,999
R 250,000 - R 499,999
> R 500,000
4.58
4.81
4.91
4.98
Rates are indicative only & subject to confirmation. For information on these & other
Treasury products call Ana Pereira on (011) 809 7542.
Sasfin Funds – NAV (23 April 2015)
Fund
Sasfin MET Prudential
Sasfin MET Equity
Sasfin MET Balanced
Sasfin MET Stable
Unit Price
3yr Return*
180.40
347.14
120.25
114.73
n/a
19.9
n/a
n/a
Bloomberg, Sasfin Securities
* Annualised
Page |1
Morning Note
24 April 2015
Argent Industrial estimates EPS for the year ended 31 March 2015 to
rise within 4.0–7.0c from a loss per share of 211.4c reported
previously. HEPS is expected to increase within 15.3–18.3c from the
14.6c reported in the previous comparable period. Results due: 25
June
Hulamin expects both EPS and HEPS for the six months ended 30
June 2015 will be more than 20% lower than the previous comparable
period. The company stated that manufacturing output has been
severely impacted by electricity constraints. Results due: 27 July
Economic Review
South Africa’s private sector credit, producer price index and balance
of trade data is scheduled to be released next week.
Global
Corporate News
Altria Group reported net income of USD1.02bn, or USD0.52 per
share, in Q1 2015 compared with USD1.18bn, or USD0.59 per share,
in Q1 2014, as a result of a lower per-share contribution from its equity
investment in SABMiller. Revenue increased 5.6% y/y to USD5.80bn
in Q1 2015 from USD5.52bn in Q1 2014, above market expectations.
Altria reaffirmed its guidance for adjusted earnings per share to be in a
range of USD2.75 to USD2.8 in FY 2015.
Equity Market
Indices
Dow
Nasdaq
S&P 500
Hang Seng
Nikkei 225
FTSE 100
DAX
ASX200
23-Apr-15
18,059
5,056
2,113
27,828
20,188
7,054
11,724
5,845
22-Apr-15
18,038
5,035
2,108
27,934
20,134
7,028
11,867
5,837
% Chg
0.1
0.4
0.2
(0.4)
0.3
0.4
(1.2)
0.1
% YTD
1.3
6.8
2.6
17.9
15.7
7.4
19.6
8.0
Earnings Calendar
Date
29-Apr
29-Apr
Company
Aquarius Platinum
Redefine International Plc
Type
Interim
Interim
Est.
USD (0.02)
-
Commodities
USD/OZ
Gold
Silver
Platinum
Palladium
Brent(USD/bbl)
Copper (USD/t)
62% Iron ore (USD/t)
23-Apr-15
1,194
16
1,137
771
62.6
5,943
49.49
22-Apr-15
1,187
16
1,129
756
60.5
5,902
49.30
% Chg
0.6
0.3
0.6
2.0
3.4
0.7
(0.4)
% YTD
0.8
1.0
(5.9)
(3.3)
12.3
(6.7)
(37.2)
Source: Bloomberg
Exchange Rates
Currency
23-Apr-15
22-Apr-15
%Chg
% YTD
Spot *
Caterpillar’s reported net income of USD1.11bn, or USD1.81 per
share, in Q1 2015 compared with USD922m, or USD1.44 per share, in
Q1 2014. Analysts expected profit per share of USD1.35 in Q1 2015.
Revenue declined 4% y/y to USD12.7bn in Q1 2015 from USD13.2bn
in Q1 2014, better than the forecast of USD12.4bn. The company's
outlook for revenues remained unchanged at about USD50bn and a
profit expectation per share of USD4.70 in FY2015.
USD ZAR
GBP ZAR
EUR ZAR
CHF ZAR
AUD ZAR
EUR USD
USD JPY
12.15
18.29
13.15
12.73
9.45
1.08
119.58
12.22
18.4
13.11
12.58
9.48
1.07
119.91
(0.6)
(0.5)
0.3
1.2
(0.3)
0.9
(0.3)
5.0
1.5
(6.1)
9.4
(0.0)
(10.5)
(0.2)
12.13
18.36
13.20
12.73
9.47
1.08
119.29
Novartis’ net income from continuing operations declined to
USD2.31bn, or USD0.96, in Q1 2015 from USD2.45bn, or USD0.99
per share, in Q1 2014. Revenues from continuing operations fell 7%
y/y to USD11.9bn in Q1 2015. Analysts expected revenues of
USD12.6bn and net income of USD2.9bn in Q1 2015.
Ex-Dividend Stocks
Dow Chemical’s net income increased to USD1.39bn, or USD1.18
per share, in Q1 2015 from USD964m, or USD0.79 per share, in Q1
2014, exceeding market expectations. Revenues dropped to
USD12.37bn in Q1 2015 from USD14.46bn in Q1 2014, driven
primarily by price declines, due to a lower oil price as well as currency
headwinds.
Date
4-May
4-May
4-May
Company
Times Media Group
PSG Konsult
PSG Group
Dividend
ZAr 30.0
ZAr 8.0
ZAr 145.0
Bloomberg *Spot prices as of 09:45AM
Economic Review
US initial jobless claims rose to 295,000 in the week ended 18
April from 294,000 in the previous week, higher than the
expectations of 290,000. The four-week moving average of claims
rose by 1,750 to 284,500 in the week ended 18 April. Meanwhile, the
continuing claims rose 2.33m in the week ended 11 April from 2.28m
in the prior comparable period.
US new home sales declined 11.4% m/m to a seasonally adjusted
annual rate of 481,000 in March from a revised 543,000 in February.
Analysts expected sales to rise to 513,000 in March.
US Markit manufacturing PMI dropped to 54.2 in April from 55.7 in
March. Analysts expected the index to decline to 55.5 points.
Page |2
Morning Note
24 April 2015
Eurozone’s Markit composite PMI fell to 53.5 in April from 54.0 in
March, below expectations of 54.4 points. Manufacturing PMI dropped
to 51.9 in April from 52.2 in March, falling short of expectations of 52.6
points. Services PMI declined to 53.7 in April from 54.2 in March, lower
than the forecast of 54.5 points. Germany’s Markit composite PMI fell
to 54.2 in April from 55.4 in March. France’s Markit composite PMI fell
to 50.2 in April from 51.5 in March.
Germany’s GFK consumer confidence index marginally rose to
10.1 points in May from 10.0 points in April, as low inflation buoyed
households' income expectations. Analysts expected the index to rise
to 10.2 points in May.
France’s business confidence index rose to 101 pints in April
from 99 points in March. Analysts expected the index to rise to 100
points in April. Meanwhile, the business confidence index for services
fell to 92 in April from 93 in March. The overall business confidence
remained unchanged at 96 in April.
UK retail sales declined 0.5% m/m in March following a revised
0.6% m/m rise in February and worse than the forecast of 0.4% m/m
gain, driven by a slump in petrol sales. On an annual basis, sales rose
4.2% in March, lower than a revised 5.4% gain in February. Retail
sales excluding fuel grew 5.0% y/y in March from a revised 4.8% y/y in
February.
Sasfin Securities is a member of the JSE and a pioneer of private
client portfolio management in South Africa, having roots dating
back to 1890. Currently, Sasfin is one of South Africa’s leading
wealth management and stock broking businesses with six
branches across the country.
Sasfin Securities’ products and services include execution-only
stock broking, deal and advisory, referral managed and
discretionary managed portfolio management services, custody
and administration, and money broking. In addition to traditional
stock broking and portfolio management, it offers a range of
collective investment products, managed funds and funds of
funds via its associate Sasfin Asset Managers.
HELP DESK
Altaaf Alli - 011 445 8036
Riaz Khan - 011 445 8040
Surette van Vollenstee - 011 445 8096
Email: [email protected]
Commodity News
Brent crude prices rose 3.4% after Saudi Arabia and its allies
continued bombing in Yemen, increasing concerns about the security
of Middle East oil supplies.
Gold futures rose 0.6% as the dollar retreated on weaker-thanexpected US economic data.
Copper edged up 0.7%.
US soybean futures rose amid decline in concerns over a truckers
strike in Brazil which could curb supplies to ports in the country's peak
export season. US corn remained unchanged, while wheat gained on
short-covering, however gains were restricted by ample supplies and
slow demand.
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Page |3