In SA, there are no major releases scheduled for this week.
On the corporate actions front, Monday, 12 December 2022, marks the last day to trade Combined Motor Holdings, Investec Property Fund, Grindrod and Mr Price Group shares to receive their latest dividend payments. Monday also marks the last day to trade in Barloworld, for shareholders to partake in the unbundling of Zeda. Zeda will list on the JSE on Tuesday.
Also on Tuesday, EOH will host a general meeting for the company’s shareholders to vote on the proposed rights offer. RCL foods will also host a general meeting for shareholders to vote on the unwinding of its existing BEE transaction.
Earnings releases in the US slow down drastically as the 3Q22 season officially draws to a close. Aggregate earnings across the S&P500 during this period have grown 69.3% y/y, while revenue increased 59.5% y/y. Notably, Adobe will release results next week.
Adobe is expected to report stable growth for the three-month period ended 30 November 2022, with adjusted EPS and revenue set to increase 9.5% and 10.1%, respectively. The software developer’s vast portfolio of digital products, supported by steady enterprise spending, continues to drive meaningful organic growth. This, according to Bloomberg, will persist for at least the next three years.
In Europe, the following companies are on our radar:
Sweden-based clothing retailer H&M has come under severe margin pressure in recent months due to increased shipping and raw material costs (which have not been passed on to customers), as well as an unrelentingly stronger US dollar. For 4Q22, despite an expected increase of 8.8% in revenue, adjusted EPS for the company is set to fall around 36.1%.
In contrast, Zara parent company Inditex will report upbeat 3Q23 results (adjusted EPS: +6.0%, revenue: +8.8%) driven by tight inventory controls and robust demand in the US supported by an online-led expansion.
Earnings releases in the Asia-Pacific region remain limited.
Economics Weekly: A look into 2023 – slowing growth and inflation as policy consolidates efforts
The stronger-than-expected economic growth in the third quarter was encouraging, with the economy showing resilience despite persistent domestic bottlenecks. While the current-year outlook is more optimistic than earlier expectations, headwinds abound. On a global level, the stagflationary environment has become more entrenched, while monetary conditions have tightened to contain runaway inflation. The latest International Monetary Fund (IMF) World Economic Outlook (WEO) shows that the global economy will grow by 2.7% next year compared to the 3.6% that it had expected at the WEO in October last year. Similarly, global inflation is expected to average 6.5% next year compared to the prediction of 3.3% in October 2021. In addition, a third of the global economy could experience a recession this year or next year, with inevitable spillovers. In particular, the anticipated global economic slowdown will have implications for the domestic economy through the export and financial flow channels over the next three to eighteen months. Export market frictions, given a rise in protectionist policies, and continued geopolitical tensions pose additional risks to global activity.
