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By Ian Stiglingh on 20 September 2017

World News

Wall Street ticked higher for yet another day ahead of the Fed’s monetary policy meeting today. Markets expect the Fed to hold interest rates unchanged and it will be the dot plots (dates of expected rate hikes) and details on the cutback of quantitative easing that will grab attention. President Trump was back in headlines following his speech at the United Nations General Assembly. The president held to his nationalist views and made comments on several countries including a threat to North Korea where he said that he will wipe out the country if they don’t de-escalate their nuclear programme. Economic data showed a fall in housing starts while building permits rebounded. Elsewhere in the world, UK markets climbed on a rally in retailers and a weaker Pound. In Japan, there was a surge in exports, which affirms the strong global demand.

 

South African News

SA markets recovered near the end of yesterday’s session, helped by a late rally in the gold sector. The ZAR edged lower against the Dollar ahead of the Fed’s rate decision today and the SARB’s rate decision tomorrow. Markets are likely to tread water today as the Fed’s rate decision is announced after market close, posing overnight risk.

 

Company News - Daniel

Remgro Ltd.

The company released a trading statement earlier this month, saying that the company expects headline earnings per share to be between 31 and 35% higher than in the comparative period. It pointed out that the increase in HEPS is mainly due to a positive fair value adjustment of the bond holders exchange option. The company is due to release its results for the period ended June 2017 today. I believe with the JSE ALSI and Top40 trading close to all-time highs, Remgro is one of the company’s that still offers value at the current share price. The share price has not fully recovered from the rights issue it did last year that was supposed to be used in the acquisition of Distell.

 

The Day Ahead

All eyes will be on the Fed tonight as the central bank makes its interest rate decision. The expectation is to see no change in the rate, but the focus will be on the commentary that should include details of an expected reduction in stimulus (or balance sheet unwind) and the expected course for rate hikes over the next two years. Currency markets are likely to be volatile today and post the meeting. Locally we have inflation to look forward to, which could shape views for tomorrow’s rate decision. Market is expecting inflation to climb to 4.9% and anything lower than this could strengthen the case for the SARB to cut rates for the second time this year.

 

Key Results Out Today

SA CPI

US Fed rate decision

 

Quote of the day

“The important thing is this: to be ready at any moment to sacrifice what you are for what you could become.”

-          Charles *****ens