The International Monetary Fund has increased its global growth forecast to 3.9% for 2018 on the back of US Tax cuts that will most likely stimulate growth.
Typically, global growth above 3.5% is a strong catalyst for commodity price growth and emerging markets.
SA is still in a honeymoon phase after Ramaphosa’s election, the Rand strength, other positive economic results have raised the prospect of interest rate cuts later in the year. Inflation is likely to remain constrained in 2018.
We will need to see how long this euphoria lasts, without major change it remains fragile.
The week ahead:
- Local economic data releases: Manufacturing Production and Sales (11/01)
- Results Expected: ADI (25/01), RES (26/01), AVR (31/01), MIX (01/02)
- LDT 23/01: AME, CLS, LEW, NTC and Various NewFunds and Ashburton ETFs
Last week’s movers and shakers…
Other Economic data releases of interest…
- Tuesday: Monetary Policy Statement (JPN)
- Wednesday: Earning’s Index (UK), Crude Oil Inventories (USA), CPI (NZL)
- Thursday: Interest Rate, ECB Press Conference (EU), Retail Sales (CAN)
- Friday: GDP q/q (UK), CPI (CAN), GDP q/q, Durable Goods Orders (USA)
One to Buy
Aspen – Offering good upside below R260
Last year we called a sell/short on Aspen at R310, below R260 its offering exceptional upside potential and could easily go back to that level.
Aspen has been received a backlash after being identified as the potential target of another Viceroy Research report. The company’s shares have fallen 20%, but it’s just speculation ….
Stephen Saad, the CEO has publicly appeared to address the rumors and speculation. He has addressed the major concerns to our satisfaction and stands by their business model and published financials.
It’s currently on a PE of 19.58 times and earnings are expected to increase around 20% in their results to 31 December, to be released in early March. In our view it is highly like the share will move above R300 in the next 4 months ( a return of 25%). .
Buy Aspen below R260.
Long Term Ideas
- Sygnia: Still up 8% after pull back. Hold
- PPC: Up 23%. Hold
- Santova: Buy below R3.00.
- Merafe: Accumulate below R1.55.
- Jubilee: Strong support at 60c. Hold.
- MTN: 13% in the money, still bullish above R130. Hold
- Glencore: Bouncing from R60. Hold
- Wescoal: Long term buy. Add below R1.80
- Naspers: up over 50%, overweight positions should be adjusted. Hold