South African stocks are likely to remain strong next week as investors snap up baskets of shares ahead of a futures closeout, while results by Sasol and Discovery could see their shares rise.
"The main highlight of the week would be the futures close out, which should see the market fairly well-supported," Jason Chesters at fund managers Tri-Linear Wealth Managers said.
The bourse hit new heights this week, partly driven by speculators who had taken futures positions and were short of shares. Even more buying is expected across the market's different sectors before the futures closeout on September 15.
Synthetic fuel producer Sasol is due to kick off a slew of company results next week. Sasol, which reports on Monday, has forecast annual headline earnings to leap 80-85 percent thanks to a weaker rand, higher oil prices and one-off items.
"Sasol should see a significant jump in earnings and dividend," Chesters said. "Most of the good news has already been factored in its shares, but Monday should still see a decent day for Sasol on positive sentiment."
Sasol's shares have surged 83 percent so far this year, buoyed partly by the profit forecast in July and the recent rise in oil prices.
The price of oil will itself be a factor, having seen the market rise and fall in contrast to its movement over the week.
Oil prices rose towards $65 a barrel on Friday, after steep losses earlier in the week, as US production recovered more slowly than expected after a battering from Hurricane Katrina. One analyst said resource group BHP Billiton and Sasol, both of which have a significant weighting on the bourse, have tracked the recent rise and fall of the oil price.
"If the oil price rises further, it could boost the likes of Billiton and Sasol. So oil will be a factor next week as we watch the US try to recover after Katrina," the analyst said.
Also likely to affect the market will be the results by the country's largest household goods maker, Steinhoff International, and the country's biggest health insurer, Discovery.
Steinhoff expects year headline earnings per share to rise by as much as 30 percent from a year ago. Headline earnings strip out capital, non-trading and certain extraordinary items.
Although Discovery has said it expected headline earnings to rise by 25 to 35 percent in the year to end-June, analysts were worried about its struggling United States unit, Destiny Health. "Discovery's prospects are good, but it would be of interest to see how far the US business has turned around, whether Discovery has managed to get it up to break even," Jan Meintjes, an analyst at Gryphon Asset Management said.
Meintjes said Discovery's share was buoyant, in anticipation of good news on Discovery's performance and outlook.
Also posting results next week is the country's biggest black-owned mining group African Rainbow Minerals, which has predicted annual headline earnings per share (EPS) to soar to between 165 and 180 cents from 37 cents the previous year, due to strong metal prices.
Headline EPS on the top end at 180 cents would represent an increase of 386 percent, which may positively impact its shares, a trader said.
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