1. DAILY MARKET COMMENTARY
11 November 2014 | 7:33 AM
Daily Market Commentary | 11 November 2014 Page 1 of 13
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SNIPPETS
(Charts of the day)
Currency wars prompt yen weaker against most major export currencies, seeking market share
(Currencies)
Top 40 rises by 0.77%, led by widespread gains; US equities upbeat along with Asian markets this morning
(Equities)
Rand weakens overnight as dollar remains supported; global majors consequently downbeat
(Economics)
Japanese trade deficit narrows and current account surplus widens, however remains downbeat compared to a year ago
(Foreign flows)
Foreign flows remain downbeat as local headwinds persist
Key overnight factors and upcoming events
Nedbank Capital Strategic Research | CapitalStrategicResearch@nedbank.co.za | +27 11 295 5430
Economic calendar
Date
Region
Event
Actual/expected/prior
Implications
10/11
CH
CPI y/y
1.6%/1.6%/1.6%
CPI remains unchanged as low energy prices cap upside
10/11
EZ
Investor confidence
-11.9/-13.8/-13.7
Confidence moderates but remains in negative territory as fragile recovery persists
11/11
JN
Trade balance ¥ Bln
-714.5/-782.5/-831.5
Trade deficit narrows as exports tick higher 11/11 SA Manuf. Production y/y --/5.6%/-1.2% Production likely to rise as US demand increases, local production likely to gradually recover from earlier strike
Source: Nedbank
Other reports produced back to top
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Weekly Investment Update
2. Daily Market Commentary | 11 November 2014 Page 2 of 13
Charts of the day back to top
Nedbank Capital Strategic Research | CapitalStrategicResearch@nedbank.co.za | +27 11 295 5430
The recent stimulus announcement by the BOJ saw the yen weaken significantly against all of its major trading partners, as the central bank
attempts to attract spur consumer spending and impact inflation in the country. Over the past year, the yen has depreciated by more than
11% on a trade weighted basis; over the past 2 years, by almost 28%. In a world of currency wars, the battle between EM’s, commodity
exporters and exporters of other manufactures have increased significantly in order to compete for the global market share.
The recent bout of euro weakness was a result of 2 factors – monetary easing by the ECB, and a stronger dollar as a result of impending
tightening by the Fed. Consequently, the EURJPY cross has seen the yen weaken significantly against the euro, despite the euro also coming
under pressure as a result of the ECB’s own stimulus measures. The yen weakened by a greater proportion against the USD than against the
EUR as a result of the upbeat dollar. Recently, the EURJPY cross broke above the declining channel to test the horizontal yen support level at
¥143.80/€. The cross is expected to continue on the weakening trend after the current pause, targeting the 2013 peak at ¥145.73.
Resistance will likely be held at the channel upper level at ¥140/€.
Against the rand, the weak yen move has also been quite significant as a result of the resilient USDZAR since October 2014. A symmetrical
wedge had been formed since the start of the year on the ZARJPY cross, and the recent monetary easing by the BOJ saw the yen break
above this wedge, projecting towards the ¥11.21/ZAR level over the medium term. The vertical blue lines in the chart below indicate the
projection higher, equal to that of the height of the wedge. The horizontal yen support level at ¥10.34 would likely provide some interim
relief to further yen weakness. Our base case remains for yen weakness overshadowing any rand weakness. This curtails SA’s ability to
capitalise on any local currency weakness, because SA exporters are competing with much more (price) competitive Japanese (and global)
exporters. However, SA imports from Japan will be comparatively cheaper but as a net exporter to Japan, this benefit will be muted.
Against other key commodity producers and manufacturing exporters, concentrated within Asia, the Yen remains the currency of choice
when it comes to price competitiveness – the yen has weakened by 15.74% over the past year against the USD, while the Australian dollar
and the euro has lost 9% and 7.7% against the US dollar respectively. Any further yen weakness could likely squander the relative
attractiveness of European and other Asian exports, and could likely make some headway with regards to the BOJ’s objectives.
ZARJPY projects above ¥11/ZAR
Source: Bloomberg, Nedbank
Currency wars and the battle for market share sends exporter’s
currencies weaker; China and India relatively stable
Source: Bloomberg, Nedbank
Yen prompted weaker against euro as BOJ stimulates
Source: Bloomberg, Nedbank
3. Daily Market Commentary | 11 November 2014 Page 3 of 13
Currencies back to top
Business Banking FX | +27 11 535 4003 | Corporate FX | +2711 535 4002 | Institutional FX | +2711 535 4005
The new week got under way with the rand having recovered from the worst levels of last week, but overall it appeared to remain
vulnerable. Little real trading activity on the day with a brief foray to the downside, which did attract some dollar buying interest before
climbing into the local close to finish the day at 11.2370. This morning it is slightly weaker, currently trading at 11.2775
On the international front, the session was also relatively subdued; the EURUSD had a brief foray above 1.2500, but thereafter a steady
decline, which has continued into this morning’s session currently trading at 1.2416.
Gold has resumed its downward trajectory, after some resilience it is currently trading at 1147.50, after trading at 1164.00 at the time of
the local close last night. On the data front today, locally we have manufacturing production, the rest of the world nothing of note and with
the U.S. on holiday today, a strong likelihood of another subdued session on the day.
The current state of the global economy and the continued monetary stimulus from various central banks would most likely see some
emerging markets benefitting from the carry trade, although the current state of the local economy would most likely preclude the rand
from that scenario. Possible trading range in the rand today 11.2000 to 11.3500
*Please note that the sign on the % change reflects the change on the headline number. The narrative indicates the trend direction over the month.
For trade in any of these currencies, contact our FX dealing desks
Majors Last price
%Δ
-1d
%Δ
MTD
%Δ
YTD
USD trend
GBPUSD 1.58 -0.10 -0.96 -4.37 USD strength
EURUSD 1.24 -0.02 -0.81 -9.90 USD strength
USDJPY 115.24 0.44 2.60 9.48 USD strength
USDAUD 1.16 0.07 2.05 3.54 USD strength
Rand crosses Last price
%Δ
-1d
%Δ
MTD
%Δ
YTD
ZAR trend
USDZAR 11.28 0.11 2.16 7.19 ZAR weakness
GBPZAR 17.87 0.00 1.18 2.49 ZAR weakness
EURZAR 14.01 0.08 1.34 -3.43 ZAR weakness
AUDZAR 9.72 0.04 0.13 3.53 ZAR weakness
ZARJPY 10.22 0.33 0.45 2.20 ZAR strength
African FX Last price
%Δ
-1d
%Δ
MTD
%Δ
YTD
ZAR trend
ZARMWK (Malaw ian kw acha) 42.47 -0.09 -1.71 3.90 ZAR weakness
ZARBWP (Botsw ana pula) 0.83 0.47 -0.76 -0.64 ZAR weakness
ZARKES (Kenyan shilling) 7.97 -0.11 -1.59 -2.90 ZAR weakness
ZARMUR (Mauritian rupee) 2.79 -0.09 -1.80 -2.15 ZAR weakness
ZARNGN (Nigerian naira) 14.89 -0.16 -0.79 -2.10 ZAR weakness
ZARGHS (Ghanian cedi) 0.29 0.21 -2.12 26.42 ZAR weakness
ZARZMW (Zambian kw acha) 0.56 -0.09 -0.69 7.02 ZAR weakness
Source: Bloomberg & Nedbank Capital T ime
Month
trend
Month
trend
Month
trend
2014/11/11 07:14
USDZAR
Source: Bloomberg, Nedbank
EUR/USD
Source: Bloomberg, Nedbank
$/R (close, high and low)
R 10.80
R 10.90
R 11.00
R 11.10
R 11.20
R 11.30
R 11.40
11/05 11/06 11/07 11/10 11/11
USDZAR $/R HIGH $/R LOW
€/$ (close, high, low)
$1.23
$1.23
$1.24
$1.24
$1.25
$1.25
$1.26
$1.26
11/05 11/06 11/07 11/10 11/11
EURUSD EURUSD High EURUSD Low
4. Daily Market Commentary | 11 November 2014 Page 4 of 13
Precious metals and oils back to top
Nedbank Capital Strategic Research | CapitalStrategicResearch@nedbank.co.za | +27 11 295 5430
After a marginal relief rally yesterday premised on the back of upbeat Chinese trade data, the bullion price maintained its downbeat tone
through the local trading session yesterday, falling by around $10/oz. The stronger dollar did aid the move weaker, however overall demand
in the gold market remains deficient, hence our call for a successively lower gold price in the medium term. The downbeat trend is likely to
persist as the upbeat dollar limits any interest in the gold market.
The Brent crude price also reversed its intraday gains quite sharply ahead of the US markets open. Again, the stronger dollar did little to
appease the bearish sentiment. The price fell by almost $1/bbl. from the day’s peak, with overall expectations for the price to remain
between $80-$90/bbl over the near and medium term. The supply glut has been keeping the price low, which is a welcome move for most
households within SA and globally.
Commodities Last price
%Δ
-1d
%Δ
MTD
%Δ
YTD
Brent near future ($) 82.05 -0.35 -4.44 -25.95
Gold spot ($) 1 148.42 -1.09 -2.09 -4.69
Platinum spot ($) 1 197.13 -0.74 -3.18 -12.83
Source: Bloomberg & Nedbank Capital T ime
Month
trend
2014/11/11 07:14
Platinum vs Gold
Source: Bloomberg
Brent Crude vs West Texas Intermediate
Source: Bloomberg
Platinum vs. Gold
$1 100.00
$1 120.00
$1 140.00
$1 160.00
$1 180.00
$1 200.00
$1 220.00
$1 240.00
11/05 11/06 11/07 11/10 11/11
PLATINUM GOLD
Brent Crude vs West Texas Intermediate
$72.00
$74.00
$76.00
$78.00
$80.00
$82.00
$84.00
11/05 11/06 11/07 11/10 11/11
BRENT WTI
5. Daily Market Commentary | 11 November 2014 Page 5 of 13
Fixed income and interest rates back to top
Bond flow sales |+2711 535 4021 | Corporate Money Markets | +2711 535 4007 | Business Bank Money Markets | +2711 535 4006
Bonds Last price
Δ
1d
Δ
MTD
Δ
YTD
% bps bps bps
R158-0.8 yrs 6.34 10.17 8.27
R203-2.8 yrs 6.70 0.04 -2.66 -22.16
R208-6.4 yrs 7.42 -0.12 -3.62 -23.62
R186-12.1 yrs 7.94 0.08 4.48 -29.32
R2048-33.3 yrs 8.70 0.25 2.15 -48.75
US 10 yr 2.36 -0.06 2.44 -66.86
UK 10 yr 2.21 0.14 -1.87 -27.04
German 10 yr 0.83 2.08 -0.83 -56.77
Japan 10 yr 0.49 7.25 6.55 -34.14
Money Market Last price
Δ
1d
Δ
MTD
Δ
YTD
% bps bps bps
SA repo rate 5.75 0.00 0.00 75.00
SA prime rate 9.25 0.00 0.00 75.00
SA CPI (MTD = previous month) 5.90 -50.00
SA 3m JIBAR 6.09 0.90 1.70 87.50
SA 3m NCD 6.10 0.00 2.50 87.50
SA 6m NCD 6.78 1.25 2.50 112.50
SA 12m NCD 7.28 -5.00 7.50 126.25
US 3m LIBOR 0.23 0.10 0.05 -1.35
UK 3m LIBOR 0.56 -0.12 0.38 3.18
Japan 3m LIBOR 0.10 0.03 -0.43 -3.45
Source: Bloomberg & Nedbank Capital T ime
Month
trend
Month
trend
2014/11/11 07:14
FRAs and Swaps Last price
Δ
1d
Δ
MTD
Δ
YTD
% bps bps bps
3X6 FRA 6.31 0.00 3.00 95.00
6X9 FRA 6.48 1.00 5.00 86.00
9X12 FRA 6.70 1.00 6.00 70.00
18X21 FRA 7.11 0.00 9.00 17.00
SA 2yr Sw ap 6.70 -0.45 5.00 58.00
SA 3yr Sw ap 6.91 -1.00 4.00 27.50
SA 5yr Sw ap 7.24 0.00 1.50 -12.00
SA 10yr Sw ap 7.82 -0.50 -0.35 -42.00
SA 15yr Sw ap 8.16 -1.50 0.50 -57.25
Spreads Last price
Δ
1d
Δ
MTD
Δ
YTD
% bps bps bps
2v10y - 1.12 0.05 5.35 100.00
3v10y - 0.91 -0.50 4.35 69.50
R186-R203 1.25 0.04 7.14 -7.16
R2048-R186 0.76 0.17 -2.33 -19.43
5y-R186 - 0.70 -0.08 -2.98 17.32
10y-R186 - 0.12 -0.58 -4.83 -12.68
15y-R186 0.23 -1.58 -3.98 -27.93
Source: Bloomberg & Nedbank Capital T ime
Month
trend
2014/11/11 07:14
Month
trend
6. Daily Market Commentary | 11 November 2014 Page 6 of 13
Equities back to top
Cash equities | +2711 294 3221
South Africa
The JSE ended a very choppy session up +0.8% (Top40) with all the sectors contributing. Resources climbed +0.8% boosted by higher
commodity prices, financials soared +1.4%, Discovery being the biggest riser and Industrials added +0.65 with strong performance by the
healthcare sector. Vodacom released interim results which disappointed the market and fell -4%. Discovery held a conference call to advise
investors of their international business strategy from which it emerged that they would purchase the remaining 25% stake in Prudential
Health Holdings, Discovery closed the day up +4.3%. The value traded was R16.8 billion and the rand was hovering around 11.23 to the US
dollar at the close.
UK/Europe
European shares ended the day firmer despite renewed tension between Russia and Ukraine in a lacklustre trading day. The FTSE, CAC and
DAX rose +0.7%, +0.8% and +0.7% respectively. Eurozone investor confidence came in better than expected and supported the market. In
Spain, 80% of Catalans vote for independence but voter turnout was less than 50%. Tesco led the FTSE rising +4%, Aveva rose more than
+7% despite reporting a lower profit as they increased their dividend and had a positive outlook.
USA
Trading in Wall Street was subdued with little economic data to direct the market and the holiday today. The major indexes grinded higher
in the morning session and maintained those levels to the close, the Dow and S&P500 closed at record highs. GoPro tanked -4% after they
announced they need to raise $800m, Dendreon plunged -81% after filing for Chapter 11 bankruptcy and Dean Foods rose +14% after better
than expected results. Its Veterans Day Holiday today and the Bond market and most banks will be closed but the exchange will remain
open.
Asia
Asian markets are trading higher this morning, taking the lead from Wall Street, the MSCI Asian pacific is up +0.5% with 3 companies rising
for every 1 that fell. Renewed tension in Russia/Ukraine has capped the rise in the region. Australian business confidence rose in October
which has supported the market, the ASX is up +0.7% and BHP Billiton and Rio Tinto are down -1.5% and -1% respectively. In Japan, the
current account had a surplus of 963 billion yen but the trade balance showed a deficit of 714 billion yen, the Nikkei is currently up +2%.
Developed Markets Last price
%Δ
-1d
%Δ
MTD
%Δ
YTD
Dow Jones 17 613.74 0.23 1.28 6.26
Nasdaq 4 651.62 0.41 0.45 11.37
S&P 500 2 038.26 0.31 1.00 10.27
DJ Eurostoxx 50 3 094.60 0.97 -0.60 -0.46
DAX 9 351.87 0.65 0.27 -2.10
CAC 4 222.82 0.79 -0.24 -1.70
FTSE 6 611.25 0.67 0.99 -2.04
ASX200 5 517.10 -0.12 -0.17 3.08
Nikkei 225 17 099.61 1.90 4.18 4.96
MSCI World 1 714.60 0.44 0.38 3.22
Emerging Markets Last price
%Δ
-1d
%Δ
MTD
%Δ
YTD
Hang Seng 23 893.96 0.63 -0.43 2.52
Shanghai 2 506.45 1.32 3.56 18.45
Brazil Bovespa 52 725.38 -0.93 -3.48 2.37
India - NSE 27 982.04 0.38 0.42 32.17
Russia Micex 1 515.36 1.22 1.81 0.75
MSCI Emerging 997.66 1.01 -1.81 -0.50
SA Indices Last price
%Δ
-1d
%Δ
MTD
%Δ
YTD
JSE All Share 50 484.09 0.81 1.53 9.14
Top 40 45 161.14 0.77 1.75 8.87
Resi 10 49 497.90 0.77 4.94 -2.96
Indi 25 61 145.43 0.59 0.74 12.23
Fini 15 15 291.76 1.43 0.74 19.98
Source: Bloomberg & Nedbank Capital T ime
Month
trend
Month
trend
Month
trend
2014/11/11 07:14
7. Daily Market Commentary | 11 November 2014 Page 7 of 13
Equity derivatives back to top
Equity derivatives | +2711 535 4030
Index markets were dominated by premiums again today as persistent futures buying led the market higher. EFP markets were skewed
towards the right hand side in response but remained quiet. Volume on the day of 22 000 Dec14 ALSI futures contracts is a touch light and
leaves open interest in the same contract virtually unchanged at 165 000 contracts.
Most of the options activity in today’s Interbank session was centred on Dec14 ALSI Left hand outrights as well as calendars. Interest was
bid on 85/ 90 percent strike downside to hedge potential close out stress scenarios and to roll ATM protection through calendars. The end
user front was fairly inactive with clients looking to purchase Dec14 SSF gamma in retailers as well as longer dated protection in CFR and
VOD through collars.
Notable Option trade s
Sa fe x
Vola tility Contra c ts
Va lue of
Premium
R 0 0 0 's Open inte re st
MAR15 NPNQ 1380P 33.00 978 9 833 489
MAR15 NPNQ 1490C 33.00 978 7 542 489
DEC14 ALSI 47300C 15.37 3 000 5 799 1 965
MAR15 ALSI 45100P 17.01 330 5 210 165
MAR15 NPNS 1380P 33.44 489 4 973 -
MAR15 NPNQ 1250P 33.00 978 4 792 489
Source : SAFEX
Inde x trade s Contra c ts
Va lue
R 0 0 0 's Open Inte re st
DEC14 ALSI 30 727 13 927 913 163 654
DEC14 DTOP 22 216 2 254 752 171 039
MAR15 ALSI 142 64 915 8 213
JUN15 ALSI - - 12 590
SEP15 ALSI - - 238
Source: SAFEX
Single stoc k Future s
Trade s Spot Contra c ts
Va lue
R 0 0 0 's Open Inte re st
DEC14 NPNQ 1 406.00 2 310 326 042 13 200
DEC14 MTNQ 228.00 4 096 94 029 31 945
DEC14 TFGQ 125.63 2 489 31 560 9 466
DEC14 CFRQ 96.85 1 531 14 936 16 499
DEC14 BILS 300.95 406 12 363 850
DEC14 VODQ 127.50 918 11 415 15 845
DEC14 BATQ 80.50 1 020 8 220 17 041
DEC14 SABQ 633.69 100 6 326 2 375
DEC14 TRUQ 68.56 913 6 298 23 628
DEC14 SHFQ 54.46 932 5 076 111 176
DEC14 SOLQ 550.00 72 3 991 2 657
DEC14 ANGQ 106.48 348 3 842 4 939
Source : SAFEX
Notable Open Inte re st - Inde x
Expiry Strike Open Inte re st
DEC14 DTOP 8030P 39 196
DEC14 DTOP 9260P 38 672
DEC14 DTOP 10850C 35 860
DEC14 DTOP 9040P 35 860
DEC14 DTOP 8300P 24 555
DEC14 DTOP 9000P 18 000
Source : SAFEX
Expiry Inde x Spot Ba sis BID Ba sis Offe r
DEC 14 ALSI 45 024 238 277
DEC 14 FINI 15 171 79 93
DEC 14 INDI 60 836 292 344
DEC 14 RESI 49 743 326 368
DEC 14 FINDI 64 956 319 376
DEC 14 DTOP 10 058 54 62
DEC 14 CTOP 23 933 125 147
Source : Nedbank Prime Services
Source : Nedbank Capital Equity Derivat ives
Contra c t Strike
P% of
Spot
Ca ll/Put Bid % prem Bid Vola tility
Offe r
Vola tility
Offe r % prem
DEC14 ALSI 40 650 90% P 0.03% 16.06% 20.56% 0.12%
DEC14 ALSI 42 900 95% P 0.19% 13.87% 18.37% 0.49%
DEC14 ALSI 45 150 100% P 1.18% 11.85% 16.35% 1.75%
DEC14 ALSI 45 150 100% C 1.92% 11.85% 16.35% 2.49%
DEC14 ALSI 47 400 105% C 0.15% 9.90% 14.40% 0.49%
DEC14 ALSI 49 700 110% C 0.00% 9.72% 14.22% 0.05%
Source : Nedbank Capital Equity Derivat ives
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
0
10000
20000
30000
40000
50000
60000
2014/10/31 2014/11/03 2014/11/04 2014/11/05 2014/11/06 2014/11/07 2014/11/10
DEC14 ALSI
Volume P% Change
160000
161000
162000
163000
164000
165000
166000
167000
168000
169000
8100
8120
8140
8160
8180
8200
8220
2014/10/31 2014/11/03 2014/11/04 2014/11/05 2014/11/06 2014/11/07 2014/11/10
Open Interest
MAR 15 Open interest DEC 14 Open interest
Source: Bloomberg (All graphs)
10.00
12.00
14.00
16.00
18.00
20.00
22.00
24.00
10.00
12.00
14.00
16.00
18.00
20.00
22.00
24.00
2014/10/07 2014/10/14 2014/10/21 2014/10/28 2014/11/04
Sav i v s. Vix
VIX (Left Hand Side of the Graph) SAVI (Right Hand Side of the Graph)
8. Daily Market Commentary | 11 November 2014 Page 8 of 13
Economics back to top
Nedbank Capital Strategic Research | CapitalStrategicResearch@nedbank.co.za | +27 11 295 5430
Japan
Japan's current account widened to ¥963.0 billion in September from ¥287.1 previously (expected ¥537.7 billion) , which is 61.9% larger
compared to a year ago. Previously however, current account surpluses reached ¥10 trillion every year, however a deteriorating trade
balance has resulted in smaller current account surpluses recently. Income from foreign stocks and bonds rose by 24.5% y/y as a result of
the weak yen.
The trade deficit narrowed marginally to ¥714.5 billion in September from ¥831.8 billion previously, better than expectations of ¥782.5
billion.
The wide trade deficit is mainly as a result of the weak yen pushing up the value of imports. Imports rose by 6.7% y/y in September, while
exports rose by 5.5%.
Synopsis: Business investment, spending and inflation has slowed in the economy, mainly on the back of the sales tax hike earlier in the
year. The BOJ has further impetus to stimulate in order to spur inflation and spending in the economy. Monetary policy is expected to
remain accommodative in order to aid a fragile recovery.
Economic calendar back to top
Nedbank Capital Strategic Research | CapitalStrategicResearch@nedbank.co.za | +27 11 295 5430
Time Country Event Survey Actual Prior Revised
10-Nov
08-Nov CH Trade Balance Oct $42.00B $45.4B $30.94B $30.96B
08-Nov CH Exports YoY Oct 10.60% 11.60% 15.30% --
08-Nov CH Imports YoY Oct 5.00% 4.60% 7.00% --
03:30 CH PPI YoY Oct -2.00% -2.20% -1.80% --
03:30 CH CPI YoY Oct 1.60% 1.60% 1.60% --
11:30 EC Sentix Investor Confidence Nov -12.5 -11.90 -13.7 --
15-Nov CH New Yuan Loans Oct 626.4B -- 857.2B --
15-Nov CH Aggregate Financing RMB Oct 887.5B -- 1050.0B 1052.2B
15-Nov CH Money Supply M0 YoY Oct 4.20% -- 4.20% --
15-Nov CH Money Supply M1 YoY Oct 5.00% -- 4.80% --
15-Nov CH Money Supply M2 YoY Oct 12.90% -- 12.90% --
11-Nov
01:50 JN BoP Current Account Balance Sep ¥536.1B ¥963.0B ¥287.1B --
07:00 JN Consumer Confidence Index Oct 40.5 38.9 39.9 --
13:00 SA Manufacturing Prod NSA YoY Sep 6.60% -- -1.20% --
14:30 US NFIB Small Business Optimism Oct 95 -- 95.3 --
Source: Bloomberg
9. Daily Market Commentary | 11 November 2014 Page 9 of 13
Foreign flows back to top
Nedbank Capital Strategic Research | CapitalStrategicResearch@nedbank.co.za | +27 11 295 5430
SA markets took a knock from foreigners last week, with a net outflow of R3.2 billion, of which the equity market was responsible for R2.6
billion and the bond market, R0.6 billion. Over the last few weeks, flows have been highly volatile, on the back of global central banks
sentiment, as well as local headwinds. The Moody’s sovereign credit rating on Thursday last week, despite being imminent, caused a bit of
shock in the local market and lent a hand at deteriorating foreign sentiment further, with large outflows on Friday.
Though still early, the month of November saw outflows of the same magnitude as that of the weekly print. This took the year to date
performance to R32.2 billion. Led by equities with R30 billion, and bonds with 2.1 billion.
Any further shocks to sentiment may well bode negatively for foreign sentiment towards SA, despite the yield advantage that SA and EM
assets as a whole carry. Foreign flows are likely to remain volatile over the last few weeks of the year, unless material positive
developments occur. Stimulus from the ECB and Asia could likely trickle down into SA, and this could support local markets in the medium
term.
SA equities and bonds Week of 03 to 07 November 2014 Month to 07 November 2014 Year to 07 November 2014
Foreign flows into SA equity market -R 2.640bn -R 2.640bn R 30.136bn
Foreign flows into SA bond market -R 0.591bn -R 0.591bn R 2.103bn
Total foreign flows -R 3.230bn -R 3.230bn R 32.239bn
Source : Bloomberg
Foreign equity flows downbeat after marginal prev. week gain
Source: Bloomberg, Nedbank
Bond flows patchy, but less
Source: Bloomberg, Nedbank
Net Foreign Flows: Equities (R'000) (LHS) vs. ALSI daily % change (RHS)
-R 2 000 000
-R 1 500 000
-R 1 000 000
-R 500 000
R 0
R 500 000
11/03 11/04 11/05 11/06 11/07
Equities JALSH INDEX
Net Foreign Flows: Bonds (R'000)
-R 1 500 000
-R 1 000 000
-R 500 000
R 0
R 500 000
R 1 000 000
R 1 500 000
11/03 11/04 11/05 11/06 11/07
11. Daily Market Commentary | 11 November 2014 Page 11 of 13
Results diary back to top
Research | Research@Nedbankcapital.co.za | +27 11 294 3178
Report Report
Latest FY0 (ZAc) FY+1 FY+2 Nedbank Capital
date Code type
FYE EPS DPS EPS DPS EPS DPS Rec FV TR
10-Nov-14 LEW I N Mar 12 873 442
C 873 442 993 514 912 517
11-Nov-14 ABL F N Sep 12 343 195
C 343 195 45 30 -199 1
13-Nov-14 ACP I N Mar 13 307 307 324 324 344 344 Sell 4263
-
14.5
C 482 307 328 324 349 346
Source: ShareData, Nedbank Capital
Forecasts in ZAcps, F = Final, I = Interim, Q = Quarterly, N = Nedbank Capital, C = I-Net Consensus, TP = 12-month forward target price, TR = Total 12-month target return, Blank spaces
mean no coverage by Nedbank Capital, Shading coverage by Nedbank Capital
While we make every effort to provide accurate reporting dates for company results, we ask readers to be aware that these dates are sometimes changed without warning & without
notice to ourselves
Last day to trade back to top
Susan Correia | Scorreia@Nedbankcapital.co.za | +27 11 295 8227
Share code Share name Dividend / interest rate
14 Nov 2014
CSG CSG Holdings Ltd dividend @ 4cps
LNF
London Fin Inv group
Plc dividend @ 8.237210cps
PET Petmin Ltd dividend @ 3cps
RPL
Redefine International
Plc
dividend: Non-PID 9.65034cps and/or PID element 20.73036cps or 3.01471 for every 100 shares
held.
SPA Spanjaard Ltd dividend @ 10cps
Source: JSE
12. Daily Market Commentary | 11 November 2014 Page 12 of 13
Contacts
Strategic Research
Mohammed Yaseen Nalla , CFA
Head: Strategic Research
Tel +27 11 294 5430
Mohammedn@Nedbankcapital.co.za
Reezwana Sumad
Treasury: Economic Analyst
Tel +27 11 294 1753
ReezwanaS@Nedbankcapital.co.za
Equities – Institutional Cash Equities and Prime Broking
Craig Antonie
Cash Equities: Sales and Execution
Tel +27 11 294 3221
Cantonie@Nedbankcapital.co.za
Susan Correia
Cash Equities: Sales and Execution
Tel +27 11 294 8227
Scorreia@Nedbankcapital.co.za
Marc Baulackey
Cash Equities: Sales and Execution
Tel +27 11 535 4030
MarcB@Nedbankcapital.co.za
Gciza Nkosi
Equity Derivatives: Sales and Execution
Tel +27 11 535 4030
Gcizan@Nedbankcapital.co.za
FX Sales – Corporate and Business Banking
FX Corporate Desk
Tel +27 11 535 4002 (JHB)
Tel +27 31 327 3000 (DBN)
Tel +27 21 413 9300 (CPT)
FX Business Banking Desk
Tel +27 11 535 4003
Ross Meredith
Head: FX Sales
Tel +27 11 294 4511
Rossm@Nedbankcapital.co.za
Fixed Income – Sales and Structuring
Gareth Robertson
Institutional Flow Sales
Tel +27 11 535 4021
GarethRo@Nedbankcapital.co.za
Vanessa Pillay
Institutional Sales and Structuring
Tel +27 11 294 4421
Vanessapil@Nedbankcapital.co.za
Money Markets
MM: Corporate Desk
Tel +27 11 535 4007 (JHB)
Tel +27 31 327 3000 (DBN)
Tel +27 21 413 9300 (CPT)
MM: Business Banking
Tel +27 11 535 4006
MM: Trading and institutional
Tel +27 11 535 4008 (JHB)
13. Daily Market Commentary | 11 November 2014 Page 13 of 13
Note on market data
Market prices as per either last market close, or if open, at the time of capturing this data. % change is calculated using this price on the prior day's close.
The time of capturing the data is around 07:00 SA time on the day on which the note is released.
Blank spaces are as a result of unavailable data from Bloomberg, and most typically due to a market being closed for a particular day.
% changes greater than or equal to 1% are coloured green while % changes less than or equal to 1% are coloured red.
Source: Bloomberg, Safex, as well as other sources stated, while calculations of periodic % changes are by Nedbank Capital.
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