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Send  Print  Share  RSS  Twitter  22 Nov 2010

The Market Maverick Daily Diary: Mon 22nd Nov

SA Today: Key events to watch, Nov 22

--- Telkom releases interim results.

--- Stats SA releases October liquidations and insolvencies.

--- Stats SA releases September tourist accommodation stats.

--- Stats SA releases September land transport survey.

--- Stats SA releases September food and beverages.

--- Nampak releases annual results.

--- Mine water 2010 conference until Nov 25.

--- African Bank releases annual results.

--- Vukile Property Fund releases interim results.

--- Austro Group releases annual results.

--- Simmer and Jack Mines Sep qtr results.


A busy week lies ahead, with key GDP and inflation data, likely to be the main focus.

Stats SA released third quarter GDP data on Tuesday, consumer inflation data on Wednesday and producer inflation data on Thursday. All data releases are set for 11:30.

Standard Bank economists Adriaan du Toit and Shireen Darmalingam expect GDP growth to accelerate slightly in Q3 2010.

They noted the main drivers of GDP growth in Q2 emanated from the manufacturing and trade sectors - but the decline in mining production weighed on GDP growth.

"The mining sector rebounded in Q3:10 despite industrial action, and while manufacturing production lost some momentum, we expect that GDP growth have accelerated to 3.6% q/q (saar) from 3.2% q/q (saar) in Q2:10," they said.

However Investec Economist Kgotso Radira expects GDP growth of only 2.9% as economic activity continues to be fragile.

"Indications from manufacturing and mining production data is that production was weaker in the quarter. Together mining and manufacturing production account for 20.1% of GDP and a sizeable portion of total employment. The sectors continue to struggle with the volatile strong rand and unevenpace of recovery in key trading partner economies.

"If the outcome for Q3.10's GDP is lower than the SARB's expectation this could support a rate cut in Q1.11," Radira wrote.

Standard Bank economists noted the CPI trough is in sight, if not already recorded. They point out that October is a low-survey month, which might ordinarily have reduced the risk of another downside surprise.

"But the effect of rand strength might still be rolling over to consumer prices, and a 3.2% y/y print seems probable - though Standard Bank's base case is for a slight uptick to 3.3% y/y in October," they noted.

Radira's expectations for CPI is around 3.3% y/y "with more downside risk than up."

Inflation has fallen more than markets expected in the past few months, but in line with our long held view that inflation will decelerate toward the lower end of the target band by Q3.10, Radira noted

"Rand strength and weak demand could push inflation closer to the lower limit of the inflation target band in Q4.10 and keep it within the target band for longer than currently expected."

Radira added that PPI inflation will likely decelerate further, driven by Eskom switching to summer tariffs and continued food price deflation.

Also this week, the Crop Estimates Committee releases Winter: 4th production forecast on Tuesday and the Summer: finalisation of 2009/2010 crop on Thursday.

The earnings season reporting period continues in full swing, with major companies such as Telkom, Nampak, African Bank, Adcock, Kelly, Tiger Brands and Remgro all due to report either interims or annuals.

Electricity utility Eskom is also due to releases its half-year results.


Nov 23: Weekly government bond auction.

Nov 23: Crop Estimates Committee releases Winter: 4th production forecast.

Nov 23: Stats SA releases Q3 2010 GDP.

Nov 23: RMB/BER releases Q4 2010 BCI.

Nov 23: Weekly government bond auction.

Nov 23: UCS releases annual results.

Nov 23: Kelly Group releases annual results.

Nov 23: Eskom releases interim results.

Nov 23: Rainbow Chickens releases interim results.

Nov 23: Adcock Ingram releases annual results.

Nov 23: ELB Group holds AGM.

Nov 23: UCS Group releases annual results.

Nov 24: Stats SA releases October CPI.

Nov 24: Harmony holds AGM.

Nov 24: Massmart holds AGM.

Nov 24: Vox Telecomm releases annual results.

Nov 24: Tiger Brands releases annual results.

Nov 25: Stats SA releases October PPI.

Nov 25: Crop Estimates Committee releases Summer: finalisation of 2009/2010 crop.

Nov 25: Economist conferences hosts Angola Business and Investment summit.

Nov 25: UN Conference on Trade and Development launches the 2010 Least Developed Countries Report.

Nov 25: Ernst and Young releases 2010 festive season retail trends survey.

Nov 25: Santova Logistics releases interim results.

Nov 25: Sallies holds AGM

Nov 25: Remgro releases interim results.

Nov 25: Sasfin holds AGM.

Nov 25: Sun International holds AGM.

Nov 26: Weekly Treasury Bill auction.

Nov 26: DRDGold holds AGM.

Nov 26: Italtile holds AGM.

Nov 26: Aspen Pharmacare holds AGM.

Nov 26: Liberty Holdings releases Q3 operational update.

Nov 26: Sasol holds AGM.

Nov 26: African Brick releases interim results.

Nov 26: Central Energy Fund announces petrol price for December.

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