Daily market commentary 10122014

DAILY MARKET COMMENTARY

10 December 2014 | 7:29 AM

Daily Market Commentary | 10 December 2014 of 12

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Key daily driver

Nedbank Capital Strategic Research | [email protected] | +27 11 295 5430

SNIPPETS

(Charts of the day) SA mining and manufacturing production growth disappoints forecasts; mining production contracts as PGM and gold slumps

(Currencies) Rand finds some reprieve after intraday touch of R11.57, majors post similar trend as dollar rally slows on day

(Equities) Top 40 closes 2.41% lower with selling across the board on general risk aversion, Wall Street closes off the day’s lows, Asia negative on Chinese data

(Economics) US trade sales and inventories; UK industrial production growth rises as mining activity buoyed; Japanese PPI eases; Chinese inflation remains benign

Key overnight factors and upcoming events


Economic calendar

Date Region Event Actual/expected/prior Implications

09/12 SA Mining & manuf. production

-- Mining production slumps, while manufacturing remains positive as the worst of the effects of the strikes have passed

09/12 UK Industrial production y/y 1.10%/1.80%/0.80% Production ticks higher as recovery persists, spurring demand

10/12 SA CPI y/y --/5.8%/5.9% Lower fuel and food prices likely to reflect in a lower headline CPI print

10/12 US Monthly budget statement --/-$67.5B/-$135.2B Budget deficit likely to narrow as tax revenue continue to rise while spending is curbed

Source: Nedbank

Other reports produced back to top


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Charts of the day back to top


SA’s mining production contracted by 1.1% in October, from the 5% surge in September, significantly below expectations for growth of

2.1%. PGM production contracted by 20.5% y/y from -17.6% in September, while production of gold, copper, other metals, and building

materials also contracted. In contrast, iron ore, manganese ore and coal were the only material positive contributors towards the index.

Despite widespread anticipation for positive growth in mining production, the data surprised to the downside as a result of PGMs and gold

production. Low international prices of these precious metals have also hampered miner’s revenues and related productivity. We do

anticipate an uptick in overall mining production in the coming months, as demand from the US, UK and the Eurozone (to some extent) ticks

higher. China and the broader Asia remains a concern, as the region consumes a major proportion of SA commodity exports. In the local

context, 2015 could likely show a relatively more stable labour environment as miners have locked in a 2 year wage settlement. Hence, this

further supports our view for relatively healthier productivity, off a low base.

Manufacturing production rose by 2.2% y/y in October, from the upwardly revised 8.6% surge in September (revised from 8%), marginally

below expectations of 2.4%. The more mellow tone in manufacturing output was mainly the result of the motor vehicles, parts and

accessories, which surged in September off a low base from a year earlier and contributed 5.8% towards overall manufacturing production

growth in September. In October, this subcomponent contributed 0.9% towards headline production, resulting in the overall slowdown in

manufacturing growth. Production of food and beverages also slowed, while most of the sub-components saw a deceleration in the growth

rates, indicating that that there was a broad slowdown across the manufacturing space.

Manufacturing output is expected to tick higher as local demand slowly rises, albeit marginally in 2015. Similarly with mining, demand from

the US, Europe and UK will likely tick higher, spurring demand for SA exports. This will likely be hampered to some extent by the slowdown

in Asia, although the overall contribution of manufacturing towards local growth is expected to rise off a low base in 2014 (due to industrial

action). Europe remains a swing factor, as SA’s largest trading partner – any decline in demand from this region threatens to adversely

affect overall manufacturing activity and exports. Currently, we remain mildly optimistic that stimulus measures advanced by the ECB will

likely filter through to the real economy, boosting demand as a result.

The SARB is unlikely to hike at the January policy meeting because growth, as evidenced by the weak mining production data, still remains

subdued, while inflation ticks lower due to exogenous factors. The rand does remain a wild-card however, and this poses an upside risk to

the probability of a hike in January.

Mining sector contribution to GDP shrinks

Source: Stats SA, Nedbank

Mining sector trend ticks higher after 2014/H1 slump

Source: Nedbank Group Economic Unit

Manufacturing output ticks higher, as indicated by the Kagiso PMI, after difficult industrial action

Source: I-net, Nedbank



Currencies back to top

Business Banking FX | +27 11 535 4003 | Corporate FX | +2711 535 4002 | Institutional FX | +2711 535 4005

The session opened with the rand appearing vulnerable and with few prospects of positive news. The local data releases were once again

unsurprisingly disappointing but measures from the PBOC to tighten lending criteria, although most likely temporary, brought the dollar

move to a halt. The rand recovered a significant portion of the previous day’s losses, managing to trade below 11.4000 after having touched

11.5735 on the day. This morning the rand is currently trading at 11.4250.

On the international front, after an initial foray below the 1.2300 level the euro traded with a firmer bias and by the time of the close it had

managed a move to 1.2444. However, price action at those levels was unconvincing and this morning it has reverted to trade currently at

1.2392.The dollar continued its decline against the yen and this morning it is currently at 118.90.

After having recovered to above the 1200.00 level yesterday, gold was resurgent and it is currently trading at 1232.15.Local data scheduled

for today CPI and retail sales, from France payrolls and industrial production, from the U.S. mortgage applications and monthly budget data.

Yesterday the markets made use of the events on the day to take some profits on their long dollar positions, but the local focus will be

firmly on the rating review on Friday. Price action has been somewhat tricky as markets realise that the prevailing levels of liquidity are

incommensurate with the volumes currently and this will most likely remain the case going into year end.

Possible trading range on the day in the rand 11.3500 to 11.5500

*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

YTDUSD trend

GBPUSD 1.57 -0.03 0.22 -5.35 USD weakness

EURUSD 1.24 0.00 -0.47 -10.12 USD strength

USDJPY 118.88 -0.35 0.21 12.94 USD strength

USDAUD 1.20 -0.05 2.24 7.28 USD strength

Rand crosses Last price

%Δ

-1d

%Δ

MTD

%Δ

YTDZAR trend

USDZAR 11.42 -0.23 3.27 8.58 ZAR weakness

GBPZAR 17.91 -0.25 3.48 2.77 ZAR weakness

EURZAR 14.16 -0.22 2.78 -2.41 ZAR weakness

AUDZAR 9.50 -0.20 0.94 1.19 ZAR weakness

ZARJPY 10.40 -0.13 -2.96 4.06 ZAR weakness

African FX Last price

%Δ

-1d

%Δ

MTD

%Δ

YTDZAR trend

ZARMWK (Malaw ian kw acha) 42.67 0.22 -3.96 4.39 ZAR weakness

ZARBWP (Botsw ana pula) 0.83 0.49 -1.02 -0.70 ZAR weakness

ZARKES (Kenyan shilling) 7.92 0.20 -2.77 -3.46 ZAR weakness

ZARMUR (Mauritian rupee) 2.77 0.24 -2.58 -2.95 ZAR weakness

ZARNGN (Nigerian naira) 16.08 0.31 -0.31 5.71 ZAR weakness

ZARGHS (Ghanian cedi) 0.28 0.11 -2.90 24.65 ZAR weakness

ZARZMW (Zambian kw acha) 0.56 0.22 -2.26 5.56 ZAR weakness

Source: Bloomberg & Nedbank Capital T ime

Month

trend

Month

trend

Month

trend

2014/12/10 07:03

USDZAR

Source: Bloomberg, Nedbank

EUR/USD

Source: Bloomberg, Nedbank

$/R (close, high and low)

R 10.90

R 11.00

R 11.10

R 11.20

R 11.30

R 11.40

R 11.50

R 11.60

R 11.70

12/04 12/05 12/08 12/09 12/10

USDZAR $/R HIGH $/R LOW

€/$ (close, high, low)

$1.21

$1.22

$1.22

$1.23

$1.23

$1.24

$1.24

$1.25

$1.25

12/04 12/05 12/08 12/09 12/10

EURUSD EURUSD High EURUSD Low


Precious metals and oils back to top


Bullion surged yesterday, just leading up to the New York session when the price rallied by $20/oz. Overnight, the price managed to sustain

the strength in the Asian session on the back of a generally weak dollar in yesterday’s session. In the medium term, we are likely to see the

price remain downbeat as safe haven and investment demand remain anaemic.

Brent initially rose towards the $67/bbl. but this move was not sustained, and the price declined into the New York session. The supply glut

remains, and is unlikely to change given the increase in US shale oil production. Our target for Brent remains $60/bbl. upon which near term

support is likely to be held.

Commodities Last price

%Δ

-1d

%Δ

MTD

%Δ

YTD

Brent near future ($) 65.99 -1.27 -5.93 -40.44

Gold spot ($) 1 232.13 0.26 5.55 2.25

Platinum spot ($) 1 249.70 0.20 4.07 -9.00


Month

trend

2014/12/10 07:03

Platinum vs Gold

Source: Bloomberg

Brent Crude vs West Texas Intermediate

Source: Bloomberg

Platinum vs. Gold

$1 160.00

$1 170.00

$1 180.00

$1 190.00

$1 200.00

$1 210.00

$1 220.00

$1 230.00

$1 240.00

$1 250.00

$1 260.00

12/04 12/05 12/08 12/09 12/10

PLATINUM GOLD

Brent Crude vs West Texas Intermediate

$58.00

$60.00

$62.00

$64.00

$66.00

$68.00

$70.00

$72.00

12/04 12/05 12/08 12/09 12/10

BRENT WTI



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

SAGBs opened auction day with R186 at 7.82% and quickly trading slightly stronger to print 7.79% before settling there at the time of

auction expiry. National Treasury cleared R750m R2032 at 8.33% , R800m R209 at 8.34% and R800m R2044 at 8.58%.

The R2032 and the R209 cleared at market but the R2044 cleared 4 bps cheaper than market which in turn pushed back-end yields higher

and as a result the back-end of the curve closed the day 3 bps steeper. R186 sold-off to print as weak as 7.86% before attracting demand

and officially closed the day at 7.82%.

ZAR had an extremely volatile day where the weak print was 11.5735 before recovering aggressively on the back of possible FDI flows

regarding SAA, and concluded the day around 11.4000. Weak local mining data also contributed negatively coupled with manufacturing

data which released in line with market expectations.

Today all focus will be on local CPI data due out in mid-morning where we expect 5.8% to print , in line with market consensus and retail

sales data in early afternoon.

Bonds Last price

Δ

1d

Δ

MTD

Δ

YTD

% bps bps bps

R158-0.8 yrs 6.44 11.92 43.92

R203-2.8 yrs 6.75 2.37 34.67 -16.83

R208-6.3 yrs 7.37 1.80 27.20 -27.90

R186-12 yrs 7.80 0.37 20.07 -43.33

R2048-33.2 yrs 8.54 2.64 6.64 -64.96

US 10 yr 2.21 -0.46 4.44 -81.96

UK 10 yr 1.89 -3.72 -1.97 -37.52

German 10 yr 0.69 -3.93 -2.14 -64.49

Japan 10 yr 0.40 -3.58 -4.04 -45.48

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 0.00

SA 3m JIBAR 6.08 0.00 0.00 86.60

SA 3m NCD 6.08 -2.50 5.00 85.00

SA 6m NCD 6.75 0.00 7.50 110.00

SA 12m NCD 7.28 2.50 22.50 126.25

US 3m LIBOR 0.24 0.20 0.40 -0.85

UK 3m LIBOR 0.56 0.09 0.40 3.14

Japan 3m LIBOR 0.09 -0.05 -0.17 -3.81


Month

trend

Month

trend

2014/12/10 07:03

FRAs and Swaps Last price

Δ

1d

Δ

MTD

Δ

YTD

% bps bps bps

3X6 FRA 6.21 -1.00 10.00 85.00

6X9 FRA 6.43 -2.00 23.00 81.00

9X12 FRA 6.57 -3.00 30.00 57.00

18X21 FRA 7.02 0.00 42.00 8.00

SA 2yr Sw ap 6.63 0.30 28.20 51.00

SA 3yr Sw ap 6.85 0.40 34.70 21.50

SA 5yr Sw ap 7.18 -0.50 37.50 -18.00

SA 10yr Sw ap 7.78 -1.00 32.50 -46.00

SA 15yr Sw ap 8.17 0.50 33.00 -56.25

Spreads Last price

Δ

1d

Δ

MTD

Δ

YTD

% bps bps bps

2v10y - 1.15 1.30 -4.30 97.00

3v10y - 0.94 1.40 2.20 67.50

R186-R203 1.07 -1.99 -14.59 -26.49

R2048-R186 0.71 2.26 -13.44 -21.64

5y-R186 - 0.62 -0.87 17.43 25.33

10y-R186 - 0.01 -1.37 12.43 -2.67

15y-R186 0.36 0.13 12.93 -12.92


Month

trend

2014/12/10 07:03

Month

trend


Equities back to top

Cash equities | +2711 294 3221

South Africa

The local market saw a selloff in line with other emerging markets as investors turned risk averse. The Top40 lost 1061 points to close down

-2.4%. All 3 major indices saw losses in excess of 2% with declines in NPN (-4.3%) weighing on the indi25. OML & INP underperforming in

the financial sector.

Gains in gold counters did little to support a weak resource sector. IMP (-0.65%) released a trading update with the miner expecting profits

to be down at least 20%. Also making the news, ATT’s accelerated book build was well received with R640m being placed at R21.60. Value

traded at 5pm was around R19.2bn with the currency at R 11.40 vs. the USD

UK/Europe

European markets took pain in Tuesday’s trade as fears around tighter lending rules in China spooked investors. The Yen strengthened while

gold climbed.

Greek counters lagged in the region as fears of an early election sparked political concerns. Financial counters saw a selloff with Attica Bank

down -26%. Miners weren’t spared with BHP & Petrofac weighing on the FTSE100. Tesco also received no love with the supermarket

company cutting its full year profit forecast.

Weaker export data out of Germany added further pressure with Adidas, Allianz, and Bayer all receiving broker downgrades.

USA

Wall Street opened sharply lower but recovered most of its losses to close slightly in the red, the Nasdaq managed to advance.

After being down as much as 218 points, the Dow closed just 51 points lower (-0.3%) with telecommunication services the hardest hit after

Verizon issued a profit warning. Gains in Apple & Amazon supported the Nasdaq with a stronger gold price lifting Newmont Mining and its

peers. Yum Brands came under pressure after the company said earnings will grow by 10% in 2015 while Krispy Kreme doughnuts dropped

after 3rd qtr results missed estimates.

Asia

Losses extended in the region after China’s consumer inflation number eased to a 5 year low with a stronger Yen weighing on the Nikkei .

Australian consumer sentiment weakened sending the ASX -0.23% lower with healthcare counters the laggard on the day after the

government will extend its cap on rebates to June 2018.

Tencent lost ground on news its chairman reduced his stake in the company while a rebound in energy prices did little to lift energy

counters. Markets in Thailand are closed today for a holiday.

Developed Markets Last price

%Δ

-1d

%Δ

MTD

%Δ

YTD

Dow Jones 17 801.20 -0.29 -0.15 7.39

Nasdaq 4 766.47 0.54 -0.53 14.12

S&P 500 2 059.82 -0.02 -0.37 11.44

DJ Eurostoxx 50 3 162.77 -2.62 -2.71 1.73

DAX 9 793.71 -2.21 -1.87 2.53

CAC 4 263.94 -2.55 -2.88 -0.75

FTSE 6 529.47 -2.14 -2.87 -3.25

ASX200 5 268.90 -0.26 -0.83 -1.56

Nikkei 225 17 389.06 -2.38 -0.41 6.74

MSCI World 1 721.97 -0.26 -1.01 3.67

Emerging Markets Last price

%Δ

-1d

%Δ

MTD

%Δ

YTD

Hang Seng 23 446.43 -0.17 -2.26 0.60

Shanghai 2 867.55 0.39 6.89 35.52

Brazil Bovespa 50 193.47 -0.16 -8.28 -2.55

India - NSE 27 785.05 -0.04 -3.17 31.24

Russia Micex 1 475.22 -0.41 -3.81 -1.92

MSCI Emerging 965.41 -1.17 -3.91 -3.72

SA Indices Last price

%Δ

-1d

%Δ

MTD

%Δ

YTD

JSE All Share 48 556.55 -2.08 -2.71 4.97

Top 40 42 911.27 -2.41 -2.93 3.44

Resi 10 41 864.73 -2.15 -5.30 -17.92

Indi 25 60 354.28 -2.39 -2.19 10.78

Fini 15 15 263.29 -2.20 -2.35 19.75


Month

trend

Month

trend

Month

trend

2014/12/10 07:03


Equity derivatives back to top

Equity derivatives | +2711 535 4030

The index market was dominated by small discounts throughout the session as futures selling led the market lower on the day. EFP markets

were quiet as attention turned to the roll markets trading between 355 and 366 in the Dec14/Mar15 ALSI market in the biggest roll market

size we’ve seen this contract so far. Volume on the day of 62 000 Dec14 ALSI futures contracts is decent, even when you strip out the 23 000

rolls traded on the day and leaves open interest in the same contract, lower at 156 000 contracts.

The options session was fairly inactive with market makers focused on managing book risks following the sharp gapping down at the open.

The few prints we saw were all end user. The standouts were index protection plays. Clients rolled outright and put spreads to Mar15. We

also saw ALSI short fences across Mar15, Jun15 and Sep15 expiries.

Nota ble Option tra de s

Sa fe x

Vola tility Contra c ts

Va lue of

Pre mium

R 0 0 0 's Ope n inte re st

DEC15 ALSI 43500P 19.30 5 565 166 944 5 565

DEC14 ALSI 47000P 17.24 2 946 104 005 4 634

DEC14 ALSI 45900P 18.37 2 956 71 987 3 371

DEC15 ALSI 52500C 16.78 6 682 40 145 3 341

MAR15 DTOP 9600P 21.78 6 000 15 636 6 000

SEP15 ALSI 43150P 20.04 500 12 723 500

Source : SAFEX

Inde x tra de s Contra c ts

Va lue

R 0 0 0 's Ope n Inte re st

DEC14 ALSI 78 190 33 836 723 153 939

MAR15 ALSI 17 800 7 784 791 17 230

DEC14 DTOP 18 479 1 801 864 167 080

DEC15 ALSI 2 852 1 272 847 6 897

MAR15 DTOP 4 816 475 953 29 807

Source: SAFEX

Single stoc k Future s

Tra de s Spot Contra c ts

Va lue

R 0 0 0 's Ope n Inte re st

DEC14 SOLQ 403.00 2 323 96 315 4 246

MAR15 SOLQ 403.00 1 750 74 134 2 841

DEC14 NPNQ 1 389.00 516 72 287 11 870

DEC14 MTNQ 218.14 3 183 69 858 26 649

DEC14 APNQ 381.50 1 650 64 472 7 070

DEC14 AGLQ 219.00 2 690 59 395 22 228

DEC14 FSRQ 48.75 10 855 53 687 81 168

DEC14 CFRQ 104.55 4 763 51 114 17 379

DEC14 SHPQ 152.00 2 966 45 987 40 493

MAR15 MTNQ 218.14 2 019 45 455 16 236

DEC14 OMLQ 34.20 10 892 37 344 22 195

MAR15 AGLQ 219.00 1 537 34 067 3 520

Source : SAFEX

Nota ble Ope n Inte re st - Inde x

Expiry S trike Ope n 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 43 327 68 136

DEC 14 FINI 15 386 24 49

DEC 14 INDI 61 349 97 192

DEC 14 RESI 41 432 65 132

DEC 14 FINDI 65 578 103 205

DEC 14 DTOP 9 751 16 30

DEC 14 CTOP 23 117 37 73 Source : Nedbank Prime Services

Source : Nedbank Capital Equity Derivat ives

Contra c t StrikeP% of

SpotCa ll/Put Bid % pre m Bid Vola tility

Offe r

Vola tilityOffe r % pre m

DEC14 ALSI 38 600 90% P 0.00% 16.06% 20.56% 0.00%

DEC14 ALSI 40 750 95% P 0.01% 13.87% 18.37% 0.04%

DEC14 ALSI 42 900 100% P 0.65% 11.85% 16.35% 0.93%

DEC14 ALSI 42 900 100% C 0.84% 11.85% 16.35% 1.12%

DEC14 ALSI 45 050 105% C 0.00% 9.90% 14.40% 0.02%

DEC14 ALSI 47 200 110% C 0.00% 9.72% 14.22% 0.00%

Source : Nedbank Capital Equity Derivat ives

-80%

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

120%

140%

0

10000

20000

30000

40000

50000

60000

70000

80000

2014/12/01 2014/12/02 2014/12/03 2014/12/04 2014/12/05 2014/12/08 2014/12/09

DEC14 ALSI

Volume P% Change

153000

154000

155000

156000

157000

158000

159000

160000

161000

162000

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

2014/12/01 2014/12/02 2014/12/03 2014/12/04 2014/12/05 2014/12/08 2014/12/09

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

2014/11/04 2014/11/11 2014/11/18 2014/11/25 2014/12/03

Sav i v s. Vix

VIX (Left Hand Side of the Graph) SAVI (Right Hand Side of the Graph)


Economics back to top


US

Wholesale trade sales and inventories beat expectations, with inventories unchanged at September’s 0.4% m/m, ahead of forecasts of 0.2%.

Sales rose by 0.2% m/m in October, ahead of forecasts of 0.1%. Inventories rose by the most in 7 months as retailers stock up ahead of the

festive season.

Inventories on hand are set to last 1.17 months – the lowest since September 2011, and indicates that retailers need to increase imports

and manufactures in order to keep up with demand.

Inventories of durable goods, cars, furniture and electrical equipment all increased in line with sales. Petroleum inventories also rose as

producers anticipate an uptick in overall consumer demand in the coming months.

Synopsis: Continued economic growth is expected out of the US, with the Fed likely to hike by 2015/Q3. An uptick in consumer spending is

expected to offset the disinflationary pressures emanating from the lower global oil price. This will likely continue to drive growth higher in

2015, supporting expectations for a rate hike by the Fed.

UK

Industrial production in the UK rose by 1.1% y/y in October, from 0.8% in September, below expectations of 1.8%. Manufacturing

production growth eased to 1.7% y/y from 2.2% in September, also significantly below forecasts of 3.2%.

The sub-components that kept production upbeat were oil and gas, and mining and quarrying, while production of textiles, clothing and

footwear, pharmaceuticals, and electrical equipment contracted significantly.

Consumer spending has been supported by consumer savings rather than income/wealth generation in the UK and this has been supporting

growth in the UK. We are likely to see consumer spending remain upbeat, especially since the labour market recovery persists, and an

uptick in incomes are imminent. This could be a supporting factor for future manufacturing growth.

Synopsis: The BOE is expected to continue debating a rate hike as the economy recovers and the labour trajectory improves. We anticipate a

rate hike by 2015/Q3 as the BOE would be mindful of the adverse effects of an overheating market. The key risk to this outlook remains

inflation which is benign in the developed world, and well below the BOE’s target of 2%.

China

Chinese CPI disappointed, falling to 1.4% in November, from 1.6% previously, below forecasts of 1.6%. Prices of food, tobacco, alcohol,

transport, communication and housing all eased in November, reflective of the subdued demand environment. Only prices of clothing

ticked higher.

PPI remained in contraction, falling by 2.7% in November, from -2.2% in October, worse than expectations of -2.4%. Prices of raw materials,

manufactured products, minerals and consumer goods all contracted further in November, weighed by subdued global and local demand as

well as falling oil and other commodity prices.

Synopsis: Downbeat inflation in China indicates consumer demand still remains subdued, in line with lower growth expectations. The PBOC

needs to provide more easing measures in order to spur inflation in the economy.

Japan

Japanese PPI slowed to 2.7% y/y in November from 2.9% previously, beating forecasts of 2.6%.

Prices of manufactured goods eased, while agricultural prices and prices of scrap continued to decline. In contrast, prices of utilities rose in

November, reflected by the slightly higher demand coming through since the start of the third quarter.

Lower energy prices have been the main reason for the decline in PPI, as Japan imports close to 90% of its energy requirements.

Synopsis: The worst of the effects of the sales tax hike seem to have passed, however inflation is far below the BOJ's inflation target of 2%.

The BOJ is expected to keep monetary policy accommodative, with further stimulus measures likely, as the economy struggles to grow.



JSE performance back to top

Susan Correia | [email protected] | +27 11 295 8227

Top40 constituents Last price

%Δ

-1d

%Δ

MTD

%Δ

YTD

AGL : Anglo American Plc 219.00 -2.15 -4.30 -4.37

AMS : Anglo American Platinum Ltd 339.50 -1.11 -8.86 -13.81

ANG : Anglogold Ashanti Ltd 101.24 3.00 2.48 -17.64

APN : Aspen Pharmacare Holdings Lt 381.50 -2.83 -4.63 41.97

ASR : Assore Ltd 149.61 -3.77 -17.08 -56.08

BGA : Barclays Africa Group Ltd 178.50 -1.65 0.06 34.97

BIL : Bhp Billiton Plc 253.58 -2.50 -3.25 -21.71

BTI : British American Tobacco Plc 646.36 -2.86 -0.62 15.39

BVT : Bidvest Group Ltd 288.55 -1.01 -1.53 7.53

CCO : Capital & Counties Propertie 64.37 -2.10 -1.12 13.93

CFR : Financiere Richemont-Dep Rec 104.55 -2.66 1.33 -0.03

DSY : Discovery Ltd 108.00 -2.22 -3.14 27.81

EXX : Exxaro Resources Ltd 105.00 -1.81 -5.71 -28.31

FSR : Firstrand Ltd 48.75 -1.87 -1.91 35.83

GRT : Grow thpoint Properties Ltd 26.00 -1.63 -6.10 7.08

IMP : Impala Platinum Holdings Ltd 77.00 -0.65 -4.55 -37.40

INL : Investec Ltd 96.60 -3.40 -6.20 29.66

INP : Investec Plc 96.25 -3.75 -5.92 27.37

IPL : Imperial Holdings Ltd 180.45 -4.62 -9.78 -10.94

ITU : Intu Properties Plc 60.11 -3.36 -2.16 21.58

KIO : Kumba Iron Ore Ltd 242.74 -3.11 -5.81 -45.26

LHC : Life Healthcare Group Holdin 40.50 -2.17 -3.11 -3.25

MDC : Mediclinic International Ltd 93.30 -0.53 -0.84 22.76

MND : Mondi Ltd 187.79 -2.55 -0.11 4.50

MNP : Mondi Plc 188.22 -3.26 -0.53 3.88

MPC : Mr Price Group Ltd 216.88 0.05 -8.17 32.45

MTN : Mtn Group Ltd 218.14 -1.41 -0.01 0.52

NED : Nedbank Group Ltd 235.77 -1.83 -2.96 12.27

NPN : Naspers Ltd-N Shs 1 389.00 -4.29 -3.14 26.73

OML : Old Mutual Plc 34.20 -2.79 -1.24 4.30

REI : Reinet Investments Sa-Dr 25.16 -2.63 -2.29 24.62

REM : Remgro Ltd 235.00 -2.74 -7.06 13.08

RMH : Rmb Holdings Ltd 60.28 -3.18 -3.75 24.67

SAB : Sabmiller Plc 593.00 -2.12 -2.90 11.31

SBK : Standard Bank Group Ltd 139.50 -2.11 2.42 7.79

SHF : Steinhoff Intl Holdings Ltd 58.80 -2.24 1.03 31.55

SHP : Shoprite Holdings Ltd 152.00 -1.94 -10.33 -7.32

SLM : Sanlam Ltd 68.76 -1.41 -6.07 29.15

SOL : Sasol Ltd 403.00 -3.45 -12.76 -21.67

TBS : Tiger Brands Ltd 361.61 -0.93 -6.44 35.47

VOD : Vodacom Group Ltd 127.11 -1.82 -4.41 -4.43

WHL : Woolw orths Holdings Ltd 76.50 -0.34 -4.08 7.63


Month

trend

2014/12/10 07:03



Last day to trade back to top

Susan Correia | [email protected] | +27 11 295 8227

Share code Share name Dividend / interest rate

11 December 2014

CND Conduit Capital Ltd dividend @ 5cps

TCP Transaction Capital Ltd dividend @ 10cps

VKE Vukile Prop Fund Ltd dividend @ 59.086cps

Source: JSE

Economic calendar back to top


Time Country Event Survey Actual Prior Revised

09-Dec

01:50 JN Money Stock M3 YoY Nov 2.60% 2.90% 2.60% --

11:30 SA Mining Production YoY Oct 2.10% -1.10% 5.30% 5.00%

11:30 UK Industrial Production YoY Oct 1.80% 1.10% 1.50% 0.80%

11:30 UK Manufacturing Production YoY Oct 3.20% 1.70% 2.90% 2.20%

13:00 SA Manufacturing Prod NSA YoY Oct 1.00% 2.20% 8.00% 8.60%

17:00 US Wholesale Inventories MoM Oct 0.10% 0.40% 0.30% 0.40%

17:00 US Wholesale Trade Sales MoM Oct -- 0.20% 0.20% 0.00%

10-Dec

01:50 JN PPI YoY Nov 2.70% 2.70% 2.90% --

03:30 CH PPI YoY Nov -2.40% -2.70% -2.20% --

03:30 CH CPI YoY Nov 1.60% 1.40% 1.60% --

07:00 JN Consumer Confidence Index Nov 39.5 -- 38.9 --

10:00 SA CPI YoY Nov 5.80% -- 5.90% --

10:00 SA CPI MoM Nov 0.00% -- 0.20% --

10:00 SA CPI Core YoY Nov 5.70% -- 5.70% --

10:00 SA CPI Core MoM Nov 0.20% -- 0.30% --

11:30 UK Visible Trade Balance GBP/Mn Oct -£9580 -- -£9821 --

11:30 UK Trade Balance Oct -£2350 -- -£2838 --

13:00 SA Retail Sales Constant YoY Oct 2.10% -- 2.30% --

14:00 US MBA Mortgage Applications 05-Dec -- -- -7.30% --

21:00 US Monthly Budget Statement Nov -$79.5B -- -- --

15-Dec CH New Yuan Loans Nov 660.0B -- 548.3B --

15-Dec CH Aggregate Financing RMB Nov 895.0B -- 662.7B --

15-Dec CH Money Supply M0 YoY Nov 4.00% -- 3.80% --



Source: Bloomberg




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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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Daily market commentary 10122014

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Transcript of Daily market commentary 10122014