Feast of JSE results from Tiger and Famous Brands
How badly listeriosis has hit Tiger Brands, how much Famous Brands’s foray into the UK has cost it, and Mediclinic’s progress at turning around its Middle East acquisition will be in focus on Thursday.
It will also be a busy day on the forex front, with the Reserve Bank making an interest rate announcement at 3pm.
The dollar weakened after US President Donald Trump’s tweet "there will be big news coming soon for our great American Autoworkers" turned out to be a fresh tariff threat against China. This sent the rand back under R12.50 per dollar.
The rand was trading at R12.46 per dollar, R14.59 per euro and R16.66 per pound at 6:50am.
Tiger Brands has not issued a trading update ahead of its interim results for the six months to end-March — indicating its listeria-related losses will not reduce its earnings by more than 20%.
In February, before an Enterprise polony factory in Polokwane was linked to SA’s listeria outbreak, Tiger Brands said in an update on the four months to January its revenue had declined but profit improved thanks to lower farm prices.
Mediclinic said on April 18 it expected to report "broadly flat" adjusted earnings for the year to end-March.
Building materials miner Afrimat said on May 3 it expected to report on Thursday basic and headline earnings per share (HEPS) for the year to end-February grew by up to 11.4%.
Famous Brands said on May 17 it expected to report on Thursday its basic earnings for the year to end-February would be about a twentieth of the prior year’s R4.14 following the write-downs on its UK acquisition Gourmet Burger Kitchen.
Headline earnings per share (HEPS), which would not include these impairments, would fall by a less severe amount up to 24%, the trading statement said.
Poultry group Quantum Foods said on May 3 it expected to report on Thursday its HEPS for the six months to end-March increased nearly sevenfold.
After April’s inflation came in at a better-than-expected 4.5%, economists generally expect Reserve Bank governor Lesetja Kganyago no change to the central bank’s repo rate at 3pm.
Higher oil prices and a weaker rand have prompted banks to expect inflation to pick up in the coming months, but not enough to prompt the Reserve Bank’s monetary policy committee (MPC) to raise interest rates in 2018.
Investec has raised its forecast inflation average for 2018 to 5.1%, rising to 5.5% in 2019.
"Substantial fuel price rises in the following months, on the back of the higher oil price and the weaker domestic currency will elevate the inflation outcome. Taking into effect these inflationary pressures, with risks to the upside, together with concerns over the faster pace of normalisation in US monetary policy, it is unlikely that the MPC will adjust the repo rate," Hodes said in an e-mail on Wednesday.
Nedbank economist Johannes Khosa also said after Wednesday’s inflation data release that the MPC will probably leave policy rates unchanged for the rest of the year before embarking on a mild hiking cycle in the second half of 2019.