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The JSE and these Rand Hedges are poised for a rally into year end

by , 13 August 2018
The JSE and these Rand Hedges are poised for a rally into year end
The JSE has remained buoyant after falling due to the ANC's EWC announcement last week. It's been range bound since breaking above its previous consolidation phase.

A rally into year-end is still on the cards thanks to several JSE heavy weights earning significant offshore revenue.

Stronger global growth and a rand that is facing headwinds into next year's elections should see earnings increase after a period of consolidation and contraction.

Rand hedges like GLN, APN, MEI, MTN and NPN are all poised for a rally.

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The week ahead:

Local Data:  Gross and Net Reserves, Manufacturing: Production and sales (07/08); SACCI Business Confidence (08/08); Capital expenditure by the public sector (09/08)
Results Due: NED, NBKP (07/08); GLN, MPT, MTN, QLT, SOH (08/08); ABSP, FFA, RNG (10/08);
EX-Div (07/08): AMS, HDC 

Long Term Ideas
  • Discovery: Up 10.13%. Strong support above 200-day moving average. Hold
  • Coronation: Buy below R60.00 for a move back to R80
  • ARM: Up 6.59%. Buy dips below R110.00.
  • Dischem: Buy below R28.00. Target R33.00
  • Shoprite: Building an uptrend from the R200 long-term support level. Hold.
  • Aspen: Accumulate on weakness below R245.
  • Sygnia: Support building above R10.00. Add
  • Santova: Up over 28%. Move stop loss up R3.40. to lock in gains. Hold.
  • Merafe: Accumulate below R1.55. Big Dividend LDT 28 August
  • Jubilee: Speculative buy below R0.50.       
  • MTN: Accumulate for long term below R110.00. Results due Wednesday 08/08.
  • Glencore: Still bullish. Hold
  • Wescoal: Long term buy. Add below R1.80
  • Naspers: Building Support above R3,200 (200 day moving average), Hold 

Best Performers:  TSX 18.2%, SGL 17.5%, TOR 9.7%, HLM 8.7%, ASR 6.9%
Worst Performers: ADI -16%, SFN -7.6%, IPL -4.2%, CML -4.4%, BAT -4.2%
Other Economic data releases of interest…
  • Tuesday: Interest Rate Statement (AUS)
  • Wednesday: Inflation Expectations (NZL); RBA Gov Lowe Speaks (AUS); Crude Oil Inventories (USA)
  • Thursday: Interest Rate Statement (NZL); PPI (USA)       
  • Friday: CPI (USA); Unemployment Rate (CAN); GDP, Manufacturing Production, Prelim GDP (UK); RBA Monetary Policy Statement (AUS) 

One to Buy – Go long this telecoms company before results are released!
MTN is due to release its results tomorrow. The company hasn’t provided any guidance, but we should see continued improvement with management achieving its target of consistent single digit growth. Investors will be looking for more information on the Cyprus sale and delayed Iranian Fibre Capex.
MTN is typically volatile when results or trading statements are released, and you should try to take advantage of that.
Long MTN at R111.00 for a move to R121.00 but will be looking to take profit above R115.50 if the spike doesn’t hold. Stop loss will be a daily close below R104.00.

Global Market Summary
  • Apple hits US$1 Trillion market cap.
  • US Unemployment drops to 3.9%.
  • Fed improved its view of the economy to “Strong” from “Solid” – Expect an interest rate increase in September.
  • BOE increased rates by 0.25% as expected.
  • Japan will adjust stimulus to be more flexible as growth gains momentum.
  • Nasdaq and S&P bag fourth straight monthly gain and S&P is just 13 trading days away from longest bull market in history.
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The JSE and these Rand Hedges are poised for a rally into year end
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