Busy day for market watchers
The rand, which strengthened 1.5% to R13.02/$ on Tuesday after Bloomberg reported the ANC intended discussing the removal of President Jacob Zuma this weekend, had fallen back to R13.12/$ by 7am on Wednesday morning.
The JSE’s banks benefited from the rand’s rally on Tuesday, with Standard Bank gaining 3.63% to R150.62, Nedbank 3.27% to R221.38, FirstRand 2.04% to R50.62 and Barclays Africa Group 1.85% to R146.40.
It is a busy day for market watchers. Besides inflation data, which are expected to show average annual consumer price increases fell back under the government’s 6% ceiling in April, numerous JSE-listed companies are scheduled to release results.
Mediclinic International released a trading update on April 13, sayings its results for the year to end-March would be released on Wednesday without giving an earnings guidance.
On April 28, Mediclinic’s share price jumped 13% on news that the Abu Dhabi government was waiving a 20% co-payment for holders of Thiqa medical insurance cards using private hospitals.
In the trading update, Mediclinic CEO Danie Meintjes warned that the group’s Abu Dhabi business "underperformed having been impacted by a major regulatory change in addition to certain business and operational challenges".
"Mediclinic’s largest two platforms, Switzerland and Southern Africa, in addition to our Dubai business, all performed in line with expectations during the 2017 financial year," Meintjes said.
Hosken Consolidated Investments (HCI) and its subsidiaries release results for the year to end-March on Wednesday.
HCI said in a trading statement on May 18 that it expected to report that HEPS grew 33%-43%.
Its casino subsidiary Tsogo Sun said on May 8 that it expected to report HEPS grew between 12% and 14%.
The HCI family has grown to include hotel-focused property fund Hospitality following Tsogo acquiring a controlling stake by exchanging shares for assets. Hospitality has changed its financial year-end to March from June and will release its results on Wednesday.
HCI also owns e.tv’s owner eMedia, which said on May 19 that its HEPS would triple from the previous year’s 7c.
EMedia said it managed to grow e.tv’s advertising revenue 9% while maintaining its market share.
Furniture retailer Lewis warned shareholders on May 17 that it expected to report on Wednesday its HEPS for the year to end-March declined by between 30% and 40%.
"Merchandise sales for the year were 2.2% lower than last year with like-for-like merchandise sales down 9.3%. Revenue declined by 3.3% mainly as a result of a 4.3% decline in other revenue," Lewis said.
Minibus taxi financier Transaction Capital said at its annual general meeting on May 1 that it would release its interim results for the six months to end-March on Wednesday. It has not released a trading statement, indicating its earnings will be within 20% of the matching period’s.
Other companies scheduled to release results on Wednesday are Tradehold and Insimbi Refractory and Alloy Supplies.
Stats SA is scheduled to release April’s consumer price index (CPI) at 10am. The annual change in CPI is the key measure for inflation used by the Reserve Bank’s monetary policy committee, which is scheduled to announce an interest rate decision at 3pm on Thursday. Economists expect the central bank to hold its repo rate at 7%, meaning the prime interest rate used by commercial banks to quote house and other loans will be 10.5%.
Investec Bank economist Kamilla Kaplan said in her weekly note on Friday that she expected CPI inflation to have moderated in April to 5.7% from 6.1% in May.
"In the month of April, disinflation in food prices is expected to have remained in place whilst petrol and diesel prices were reduced by 24c/litre and 10c/litre respectively. The food and fuel price components are therefore expected to yield lower contributions to headline CPI than in March. Food price inflation should moderate throughout the year in line with the decline in maize prices on an improved supply outlook for the 2017 maize harvest. This, coupled with the lagged effects of past rand appreciation and the continued absence of meaningful demand led inflationary pressures should see CPI inflation recede into the 3%-6% target range this year."
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