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Morning News 13 April 2015

Local Headlines

Local markets cruised to a 1-month high on Friday, steered by strong gains in blue-chip stocks such as Sasol, BAT and Naspers. Gold mining companies such as Anglo Gold Ashanti, Harmony and Gold Fields, also drove the market as spot gold rebounded. However, the declining iron ore price hammered Kumba Iron Ore, as it fell 4.09%, while Assore and African Rainbow Minerals shed 2.02% and 1.77% respectively. Among individual shares, Pick n Pay gained 3.05% and PSG added 2.3%, after both stocks released upbeat trading updates. The All Share index was 0.82% higher at the close, with the Top 40 adding 0.76%.

Sens

PSG: In a trading statement for the financial year ending on the 28th of February 2015, PSG has announced that its SOTP value per share as at 28 February 2015 has seen an increase of 71.9% from R95.01 to R163.28. It currently stands at R195.02 as at the 7th of April 2015. Recurring headline earnings per share are expected to come in at between 590 cents and 597 cents, an increase of between 31.5% and 33% from the previously reported 448.8 cents. Furthermore, headline earnings per share will be between 814 cents and 823 cents, an increase of between 47.1% and 48.8% from last year’s 553.2 cents. Lastly, attributable earnings per share will see an increase of between 39.3% and 41.1% to between 806 cents and 816 cents, from 578.5 previously. The reviewed results will be published on or about the 15th of April 2015. Pick n Pay: In a trading statement for the 52 weeks ended 1 March 2015, PWK foresees a strong financial performance for the period, with turnover growth of 6.7%. Earnings per share for the period is expected to be between 40%-50% higher and come in at between 84.85 and 90.92 cents per share, from 60.61 cents per share previously. Additionally, headline earnings per share will see an increase of between 20%-30% and come in at between 82.60 and 89.48 cents per share, from 68.83 cents in the previous corresponding period. Lastly, results are expected to be released on the 21st of April 2015.

European Headlines

European shares powered to multi-year highs on Friday, helped by further declines in an already weak euro that is seen supporting an economic recovery and boosting corporate profits. The euro fell to 1.0603/$, having slipped more than 3% last week. Shares of Nokia jumped 3.9%, to a 4-year high, in a late surge after news that it might sell its maps business. The FTSEurofirst 300 closed 0.9% higher at 1,645.25 points, surpassing its 2007 peak and taking its gains to 20% for 2015. Germany's DAX index and Britain's FTSE 100 index both hit all time-highs, while France's CAC 40 rose to its highest level since 2008.

American Headlines

U.S. stocks ended a strong week with a broad rally on Friday, as investors lauded GE's decision to divest most of its highrisk GE Capital business and repurchase shares. General Electric rose 10.8% to $28.51, its highest level since September 2008. All 10 primary S&P 500 sectors ended up on the day, but the S&P Industrials, driven by gains in GE shares, was by far the best performer and rose 1.5%. For the week, the Dow added 1.6%, while the S&P and NASDAQ gained 1.7% and 2.3% respectively. This week, focus will shift to the 1st quarter earnings season with results due from a number of major firms, including banks.

Asian Headlines

Chinese shares led the gains this morning, as it touched fresh 7-year highs, while the Nikkei struggled to find momentum as it remained a whisker away from the 20,000-point mark. The Nikkei was 0.1% lower with Softbank and Fast Retailing adding 2.2% and 0.8% respectively, while gains were offset by losses among carmakers. On the mainland, the Shanghai Composite held onto a 1% gain, despite disappointing trade data. The Hang Seng was set to extend its gains to a 4thsession, up 0.4% to its highest level since January 2008. Australia’s ASX was 0.3% higher, despite worries over the impact of plunging iron ore prices.

Commodities Headlines

Gold steadied above $1,200/oz this morning, after rising in the previous session, but persistent concerns that the Federal 0.39 Reserve is on course to lift rates this year should cap any gains. Spot gold was flat at $1,206.93/oz, after climbing 1.1% on Friday as bulls attempted to push the price past the $1,210 resistance level. Brent crude rose 2.3% on Friday, bringing the total weekly gain to 5.3% on lowered expectations from Iran's nuclear programme agreement. Meanwhile, oil prices edged up in early trade this morning, with Brent crude $0.18 higher as it traded at $58.05 a barrel.

Currencies Headlines

On Friday, the rand gave up its gains against the dollar, with the dollar strengthening as jobless claims data eased concerns over the state of the US economy. Near the end of the session, the rand was trading 0.32% softer at R11.9885/$, after hitting an intraday low of R12.0580/$ earlier in the session, its weakest level since April 1. A week ago, the rand touched a 1 month-high of R11.6950/$, but has since failed to hold on to gains due to sentiment that US interest rates will inevitably rise, with the prospect of a June increase still in the mix despite spotty economic data.

Happy Trading…

 

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