SOUTH AFRICA MORNING SHEET

Transcription

1 EMERGING MARKETS RESEARCH 1 January 212 SOUTH AFRICA MORNING SHEET South Africa s state-owned power provider, Eskom, yesterday warned that the risks of power outages in the country had increased because of the significant step-up in maintenance to its power plants. According to the utility, around 1% of its total power-plant capacity is currently under maintenance. Eskom has subsequently asked large power users to voluntarily reduce their usage to help ease the load. Other issues such as low coal stockpiles and weather conditions are also putting pressure on the country s electricity system according to the parastatal. Though we remain of the view that it is unlikely that the same magnitude of the electricity crisis of 28 will repeat itself in 212, these comments do little to ease concerns that the country s power management is firmly under control and therefore warrants closer attention in the coming months should the situation worsen. Today is relatively quiet on the South African data calendar, with NAAMSA new vehicle sales statistics for December the most notable release. We highlight caution in reviewing today s headline vehicle sales growth figures given yesterday s announcement that Mercedes Benz sales figures will not be published in the NAAMSA stats for an indefinite period. This suggests a somewhat lower y/y growth trajectory for December 211 sales figures after healthy sales growth of 11.7% in November. Close Change USD/ZAR % EUR/USD % EUR/ZAR % m Jibar 5.6% bp R % 4 bp R % 5 bp All Share 2,775.1% Gold $/oz 1,611.4% Brent $/bbl % Source: Reuters, Bloomberg Markets: After opening the week at R8.15 in relation to the greenback, the rand strengthened on Monday to R8.1, but rand bulls didn t have it all their own way during the day s trade. For most of the day rand bulls were encouraged by improved levels of global risk appetite, after Chancellor Merkel and President Sarkozy vowed to implement a new austere fiscal budget framework for the debt-laden EU region as early as the end of January. Mounting evidence that the Chinese authorities are becoming more accommodative about their lending practices and suggestions that Hungary is becoming more amenable to negotiations over a much needed IMF loan also helped bolster the mood. In the afternoon session the rand temporarily weakened back to R8.19 following warning s from Eskom that SA might experience a renewed wave of load-shedding. However, these concerns proved fleeting and the rand went into the close on a firmer footing. The rand is once again exhibiting a firmer tone this morning, which is in keeping with a positive finish on Wall Street last night, a firmer euro and higher precious metal prices prices. We are not expecting much market reaction from today s local business confidence and vehicle sales data as local developments continue to play second fiddle to global markets. Hence, we still favour a firmer rand and lower yields so long as risk appetite continues to improve. For the South African fixed income market, the main news of the day was that the National Treasury tapped the international bond market on Monday with a $1.5bn issue of 12 USD bonds at a yield of 4.66% (or 27bp over US Treasuries). PLEASE SEE ANALYST CERTIFICATIONS AND IMPORTANT DISCLOSURES STARTING AFTER PAGE 4 Absa Capital is a division of Absa Bank Limited

2 GLOBAL OVERVIEW Developed Market Equities KEY: Daily Change 5 Day Change Developed Market 1yr Debt (bp) 2.% 1.5% 1.%.5%.% -.5% -1.% -1.5% DOW FTSE DAX NIKKEI AUS US UK DE JP AUS 12,9 5,612 6,17 8,9 4, Emerging Market Equities Emerging Market Debt (bp) 4% % 2% -1% % 1% -2% -% -4% SA Top- 4 BRAZIL MEX TURK POL RUSSIA H KONG MEX 226 BZL 24 TURK 2 RUS 2 SA $ 2 29,22 59,8 6,785 49,87 7,41 1,4 18,866 Commodity Prices 7% 6% 5% 4% % 2% 1% -1% % Opec Basket Source: Bloomberg Brent Future West Med gasoline Singapore gasoline Gold Platinum Baa and EMBI+ Spread 45 4 Baa (lhs) EMBI+ (rhs) Jan 11 Mar 11 May 11 Jul 11 Sep 11 Nov Data Releases and Events Highlights (See weekly calendar for details) Country GMT SA time Data Period Latest Forecast Consensus Events E17 14: 16: E17: European Commissioner for Economic and Monetary Affairs Rehn speaks on Eurobonds US 15: 17: US: San Francisco Fed President Williams (FOMC voter) speaks in Washington US 16:1 18:1 US: Cleveland Fed President Pianalto (FOMC voter) speaks in Ohio US 18: 2: US: Kansas City Fed President George (FOMC non-voter) speaks in Kansas City.25 US 14: 16: US: Atlanta Fed President Lockhart (FOMC non-voter) speaks in Atlanta Data releases France 7: 9: France: BdF industrial business sentiment, index Nov France 7:45 9:45 France: Industrial production, % m/m (y/y) Nov. (1.8) -.1 (-.5).1 SA 9: 11: SA: SACCI business confidence index Dec SA 1: 12: SA: NAAMSA new vehicle sales (%, y/y) Dec US 15: 17: US: Wholesale inventories, % m/m Nov E17 1: 12: E17: Final HICP, % m/m (y/y) Nov (.) P. (.).1 (.) US 1: 15: US: Initial jobless claims, k (4wma) 9-Dec 81 (9) 9 (9) 9 1 January 212 2

3 FOREIGN EXCHANGE Forex Spots Unit $ Change R Change Rand Forwards Term Forward Points Outright Forward cover Forward rate cost (ann.) USD % 1 month % GBP % % months % EUR % % 6 months % JPY % % 9 months % CHF.95.59% % 1 year % AUD % % Source: Bloomberg CAD % % HKD % % Rand Options THB % Option Implied Volatilty Price as a % of Term IDR % $ nominal Change MXN 1.7.1% 1 month 1% 2.7% -2.7% 2.1% -.% BRL % months 21.% 21.7% -.7% 4.2% -.1% TRY % 6 months 22.% 22.4% -.4% 6.2% -.1% PLN.52.57% 9 months 22.4% 22.7% -.4% 7.7% -.1% CZK % 1 year 22.8% 22.8%.% 9.%.% Source: Reuters Source: Bloomberg, all rates are mid rates Nominal Effective Exchange Rate of the Rand (Trade weighted Rand) SA Fuel prices Date Value % YTD Date Value Gauteng 95 Diesel Rands per Litre 1 Jan % 1 month ago Octane.5% 9 Jan % 12 Dec This month Jan % 12 months ago Last Month Jan % 1 Jan Change Jan % End of last year *Average Unit over/(under) recovery (c/l) (2.) Jan % Dec Jan % Note: *A fuel price over recovery indicates that the next price changeis likely Source: SA Reserve Bank to be down and vice versa for an under-recovery MONEY MARKET General SARB Repo Rate Prime Interest Rate Last Previous Date of last 9 Jan 12 6 Jan 12 change 18 Nov Nov 1 Source: CEF Chart: SARB Repo rate and -month Jibar SARB Repo Jibar Johannesburg Interbank Agreed Rates (Jibar) SAFEX Overnight Rate month Jibar month jibar month Jibar year Jibar Negotiable Certificates of Deposit (NCDs) -month NCD month NCD month NCD month NCD Sources: Reuters, Bloomberg International Money market rates: US dollar libor USD Overnight USD 1-month... USD -months USD 6-months USD 9-months USD 1-year Fed Funds target Rate Source: Reuters Jan 1 Apr 1 Jul 1 Oct 1 Jan 11 Apr 11 Jul 11 Oct 11 Jan 12 Chart: Fed Funds Target rate and -month USD Libor.7 Fed Funds Libor Jan 1 Apr 1 Jul 1 Oct 1 Jan 11 Apr 11 Jul 11 Oct 11 Jan 12 1 January 212

4 INTEREST RATES All Bond Index Government Primary Dealer Bonds Bond Details Albi Last BESA m-t-m Change Trading stats for 9-Jan-12 Issuer/coupon rate/maturity weighings 9-Jan-12 (bp) Open High Low Last This Morning R26 RSA 7.5% Jan % R R21 RSA 8.75% Dec 214 % R ES15 Eskom 7.75% Aug % R R157 RSA 1.5% Sep % R WS4 TCTA 12.5% May % R R2 RSA 8.25% Sep % R ES18 Eskom 9.25% Apr % R R24 RSA % Dec % R R27 RSA 7.25% Jan % 95 R HWAY2 SANRAL 9.75% Jul % R214 No Spot Trade DV22 Transnet 9.45% Feb % R28 RSA 6.75% Mar % 8.15 ES2 Eskom 1.% Jan % 8.71 DV2 DBSA 1.% Feb % 9.55 Government Inflation Linked Bonds ES26 Eskom 7.85% Apr % 9.29 Trading stats for 9-Jan-12 Last BESA R186 RSA 1.5% Dec % 8.67 Open High Low Last m-t-m R21 RSA 7.% Feb % 9.55 R ES Eskom 7.5% Sep 2 2.1% R R29 RSA 6.25% Mar % 9.55 R R214 RSA 6.5% Feb % 9.95 R R Albi yield Weighted average MTM yield 1.% R , Bloomberg Albi Total Return Index % Govi Total Return Index -.88.% BarCap/Absa SAGovt. Inflation Linked bond index, latest yields-to-maturity from Reuters % Bond Trading Data Total Non Repo Trades for the main government funding stocks (ZAR mn) BESA day's non-repo trade volumes 9-Jan-12 week-to-date month-to-date year-to-date (R mn) by time R26 R21 R157 R2 R24 R27 R28 R186 R21 R , , ,441 2,89 2,574 2,82 1,8 1,56, ,441 2,89 2,574 2,82 1,8 1,56, : 8: 9: 1: 11: R : Total client trades on BESA (ZAR mn) Bond Exchange Total Volumes Local Clients Foreign Clients Nominal amount traded (ZAR bn) 1: R Daily 9-Jan : R Week to date 1-Jan R Month to date Jan ,95 15: R Year to date , R24 R27 Net Foreign purchases / sales of SA bonds 16: R Daily 9-Jan -1-1,18 R (ZAR mn) latest & Previous 17: R Week to date 1-Jan Bond Exchange Cash Flows R Month to date Jan ,481 R Year to date ,59 5 1, 1,5 Monthly Coupons and Maturities for the next twelve months (ZAR mn) Five Largest Coupon Payments for January 212 (ZAR mn) Month Coupons Redemptions Date Issuer Amount January 6,197 1,287 R27 15 Jan 12 Republic Of South Africa,69 February 4,58 4,82 R26 15 Jan 12 Republic Of South Africa 1,195 March 16,22 11,295 ES2 25 Jan 12 Eskom Holdings Limited 66 April 1,762,725 HWAY2 1 Jan 12 South African National Roads 49 May 2,129 2,89 R212 1 Jan 12 Republic Of South Africa 286 June 11,86 5,97 July 6,19 6,99 Four Largest Maturities for January 212 (ZAR mn) August 4,456 1,62 Date Issuer Amount September 15,17 7,94 MBP11 Jan 12 Mercedes-Benz South Africa 426 October 1,692 5,956 GPT11 29 Jan 12 Growthpoint Properties Limited November 2,16 5,54 FRC1 8 Jan 12 Firstrand Bank Limited 12 December 11,779 4,472 ING12 1 Jan 12 Inguza Investments Proprietary 91 Fras and Swaps South Africa FRAs curve South Africa Swap curve m Jibar 1x4 1 day change (rhs) FRA curve (lhs) 2x5 x6 4x7 5x8 6x9 7x1 8x11 9x12 12x yr 2-yr 1 day change (rhs) Swap curve (lhs) -yr 4-yr 5-yr 6-yr 7-yr 8-yr 9-yr 1-yr January 212 4

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