Capio Capital Market Overview and Trade Ideas The Nikkei traded flat while the Hang Seng traded lower this morning ahead of Janet Yellen’s 1st monetary policy meeting and as investors awaited for further news from the Crimean region. Strength in the Yen hurt exporters with Tencent in the red ahead of its results scheduled later today. Reports that a real estate firm defaulted hurt the banks. On the earnings front, Samsonite managed to top estimates while Galaxy Entertainment advanced after the casino operator announced a dividend. Gains in Consumer goods & financials helped support the ASX as losses in the mining sector limited gains (BHP -0.65%, Rio -0.85%). US stocks recorded their 2nd day of gains with the S&P near its record highs as housing data boosted confidence and worries over the Crimea region eased. Microsoft led the Dow (+0.5%) on news its Office suite will soon be available on Apple’s mobile devices. Tech stocks were notably strong on the day. HP benefitted from a broker upgrade. Oracle lost all its gains in after hours trade after reporting profit numbers that missed estimates with FutureFuel jumping after profits more than tripled. Shares of Adobe will be under pressure today after reporting 1st Qtr profit numbers that missed analysts’ estimates. Look out for numbers from FedEx & Guess today European markets posted solid gains after President Putin signalled he didn’t want to split Ukraine, helping to ease tensions. Vodafone managed to shrug off a possible ratings downgrade from Fitch to trade up in London with banks & industrials leading the pack. Asos tumbled after the online retailer plans to raise capital expenditure while Sainsbury gained after the company held onto its 16% market share. Initial sanctions against Russia weren’t as tough as initially expected with Investors also digesting a weak German investor confidence number. The Top40 (+0.56%) lacked direction in early trade but was pushed strongly late in the day to close up 237 points after Mr Putin’s comments. Industrials were the outperformer, supporting a negative financial & resource sector. NPN (+4.5%) recovered Monday’s losses with TKG (+3.9%) advancing after the company expects HEPS to be at least 20% higher. A lower gold price after its recent good run saw its respective counters lag (HAR -5.2%, GFI -4.6%, SGL -4.4%) while property counters saw strong buying interest late in the day. News of the day was SHF offering to increase its stake to as much as 98% of JDG (+28%), a 38% premium to JDG’s 5 day VWAP. Value traded at 5pm was around R 18bn with the currency at R 10.71 vs. the USD. Trade Ideas 1) Medium term trade: Long Brait off R46. Stock has support at the R44 level and is R11 off its highs of R57 on 04/12/2013. Target price of R56.50, stoploss at R43. 2) Keep an eye on NPN: Tencents results are being released today. If Tencent misses expectations enter a short on NPN if it beats expectations enter a long. Expectation – HEPS (CNY 8.67) & Rev. (CNY 60.21B)
Posted on: Wed, 19 Mar 2014 07:38:10 +0000