Explorez tous les épisodes du podcast WorldWide Markets with Simon Brown

Vodacom has cut its dividend payout ratio from 75% to 65%, which pushes one of the JSE's dependable income names down the list. Simon Brown runs the Top 40 and the mid-cap screen to find where quality local yield actually sits, and shows how Growthpoint, Nedbank, Coronation and Standard Bank can be combined into a home-built income portfolio yielding roughly seven and a half to eight percent, growing ahead of inflation. He also unpacks Alphabet's record quarter, where two thirds of the profit was unrealised paper gains and free cash flow turned negative for the first time on record, and asks how any investor values Tesla when the CEO has promised self-driving cars every year for a decade.

Topics: Alphabet results, AI capex, circular AI revenue, Vodacom dividend policy, JSE dividend yields, income ETFs, Tesla valuation, Elon Musk, Bid Corp, Clicks, Absa.

WorldWideMarkets is part of JustOneLap.com.

Can you find a real edge in prediction markets? Simon hunts the arbitrage — and calls Netflix cheap.

In this week's WorldWideMarkets:
• 🎲 Prediction markets: where's the edge, and where's the scam?
• 🇧🇷 The Brazil election "two-horse arbitrage" explained
• 📈 Betting SA's 2026 inflation print with a Bayesian model
• 🎬 Netflix halved — Simon says it's now cheap
• 📊 Stocks on the move: Bid Corp, Mr Price, OUTsurance, Vodacom, Absa, Gold Fields

CHAPTERS:
0:00 Introduction
1:20 Prediction markets: where's the edge?
4:35 The Brazil election arbitrage
8:05 Betting SA inflation with a Bayesian model
13:30 Upcoming events
14:25 Oil, Iran & Canada tariffs
16:45 Netflix: cheap for the first time in years
19:50 Stocks on the move

🌐 More at JustOneLap.com

Global bond yields are spiking to multi-decade highs across the US, UK and Japan, and Simon Brown argues this looks a lot like the emerging market debt crises markets usually call doom and gloom.

He unpacks the Pick n Pay sell-down of Boxer shares, the Eastern Cape floods threatening the citrus crop, and the absurd Cerebras IPO trading at 150 times sales.

Plus an update on JustOneLap's institutional-grade research project, results from Calgro M3, WeBuyCars and Astral, the Global Investment Returns Yearbook 2026, and three stocks on the move: British American Tobacco, BHP Group and Clicks.

WorldWideMarkets is part of JustOneLap.com.

• Surge attributed to the formation of a coalition government involving ANC, DA, and IFP.
• Top 40 index rose 3.5%, a significant increase not seen since February 2018.
• The rally, likened to the start of a marathon, suggests potential long-term growth, despite possible volatility.

• RAND trading under 18, affecting resources positively.
• Potential for RAND to strengthen further, possibly reaching 17.

• The coalition's stability is uncertain but critical for long-term market confidence.
• JP Morgan upgraded South Africa from underweight to overweight, signaling positive outlooks.

• Retailers like Shoprite*, Mr. Price*, Foschini Group*, and Truworths hitting 52-week highs.
• ETFs for local investors, focusing on SA Inc..
• Recommendations include avoiding heavy Rand Hedge dual-listed miners in a strong RAND environment.

• Interest rates for RSA Retail Savings Bonds to drop in July.
• Current rates: 11.5% for a 5-year bond, expected to decrease to 10.75%.
• Opportunity to reset bonds before the rate change on the 20th of the month.

• Local CPI stable at 5.2%, within the target band but aiming for 4.5%.
• US FOMC holds rates steady, hinting at a possible future rate cut.
• Prospects for lower local interest rates and their impact on retail stocks and disposable income.

• Interest in retailers and brokers like Purple Group* and PSG Konsult, considering the potential increase in disposable income and trading volumes.
• Positive long-term outlook, but caution against immediate full investment.

Simon Brown

* I hold ungeared positions.

• Core Inflation: Came in at 3.4%, lower than the expected 3.5% and previous 3.6%.
• Impact: Positive market reaction, with US Treasuries under pressure, Rand strengthening, and Dollar weakening.
• FOMC Outlook: Potential rate cuts anticipated towards the end of the year, possibly in November and December.

SPAR:

• Performance: Results were as expected, market responded positively.
• Issues: Challenges in Switzerland, discontinued operations in Poland, and ongoing SAP implementation issues.

Foschini Group:

• Performance: Strong results, market reacted favorably.
• Highlights: Good performance in their online platform Bash and general improvement across brands.
• Foschini Group and Clothing Retailers: Potential growth areas and resistance levels in stock prices.

• Contemporary Amperex Technology Company Limited (CATL):
• Sector: Battery technology for EVs and corporate solutions.
• Market Performance: Positive analyst ratings, promising future prospects.

• Helium Production: Helium is flowing, but further testing is required.
• Challenges: Significant delays and ongoing testing phases, but progress is being made.

• Stock Movement: Changes in buyer and seller dynamics impacting stock price.
• Insights: Importance of identifying market movers in stock trading.

• Coalition Talks: Ongoing with potential for an ANC, DA, IFP coalition.
• Rand Performance: Strengthening in response to political stability and positive US inflation data.

[caption id="attachment_42378" align="aligncenter" width="849"] USDZAR | 12 June 2024[/caption]

Simon Brown

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* I hold ungeared positions.

New Two-Pot Pension System:

• Details on the implementation and implications for retirement savings.
• Kicks in 1 September 2024
• Can take up to R30k immediately, but this will be taxed.
• Thereafter 30% of contribution go into a savings pot your can take out, it will be taxed.
• Only use for an emergency, not holidays.

• Analysis of Rainbow's re-listing after 17 years.
• RCL Foods will be unbundling later in June
• One Rainbow share for every RCL Foods share
• But is Rainbow the best chicken stock on the JSE?

• Members agreed to cut voluntary production cuts
• Oil crashed
• As did Sasol

[caption id="attachment_42315" align="aligncenter" width="849"] Brent oil | weekly | Koyfin

• Negative Q1
• Q2 should be slightly better thanks to reduced load shedding
• But election will have worried investors.

• Buyer at 750c
• Seller at 760c

[caption id="attachment_42316" align="aligncenter" width="849"] Santova daily | 06 May 2024 | Koyfin

• ANC is talking with everybody
• They seem keen on a governmnt of national unity
• Rand volatile

• Three new Global ETFs from FNB with low TERs
• The Power of Commodities with 1nvest: Navigating Trends and Unlocking Portfolio Diversity

Simon Brown

All charts by KoyFin | Get 10% off your order

• Slow ballot counting with three ballots, 18.7% counted.
• CSIR prediction at 5%: ANC 42%, DA 22%, EFF 9%, MK 14%, Patrick Alliance 2%.
• Market concerns about ANC forming a coalition.
• Rand fluctuations: From 18.34 on Tuesday to 18.61 currently.

[caption id="attachment_42259" align="aligncenter" width="849"] Rand | 1pm 30 May 2024[/caption]

• 9.5% revenue growth.
• 24.5% growth in fintech, now 12% of the business.
• Pepkor sells 7 out of 10 smartphones in South Africa.

• Earnings down 20% for the year ending June.
• Challenges in the clothing segment, further deterioration in footfall and discretionary spend.
• Food segment performing better, but overall market reaction negative.

• Revenue growth of 19%, HEPs up 12.5%, return on equity at 28.5%.
• Surprise 50 cents dividend despite previous year-end dividend expectations.

• BHP walked away from the Anglo-American takeover proposal.
• Speculation about potential offers from Rio Tinto or Glencore.
• Anglo-American's disinvestment plans for De Beers and Anglo Platinum.

• Discussion on Metrofile's challenges with dividend yield falling and pressure on share price.
• SAB Cap Investments' exit from Metrofile.
• South African Reserve Bank MPC rate announcement: No rate changes expected.
• Upcoming central bank meetings: ECB, FOMC, Bank of England, Swiss National Bank.
• Potential for future rate cuts in South Africa if inflation targets are met.

• Insights into gold, PGMs, and copper.
• Mention of the cheaper gold ETF from 1nvest compared to Absa GLD.

Changes in 10X ETFs: Local Dividend Aristocrat and Smart Beta merging into a Top 50 ETF.

* I hold ungeared positions.

Nvidia's Financial Performance

• Nvidia's Q1 Results:
• Revenue up 262% year-on-year to $26 billion.
• Net income up 628% year-on-year to $14.9 billion.
• Gross margins at 78.9%.
• Stock Split: 10-for-1 stock split set for 7 June.
• Market Reaction: Stock traded over $1,000 in the aftermarket.

• BHP's Third Offer: Anglo American rejects BHP's third offer.
• Deal Concerns: Issues with the price and risk of the deal.
• Next Steps: Extended deadline for BHP's offer to 29 May.

• Richemont's Position: Holding steady in a tough luxury market.
• Earnings Growth: Expected around 10% over the next few years.
• Preferred Stock: Richemont favored over LVMH for its focused luxury product line.

• Copper Boom: Strong performance but cautious outlook due to potential price pullbacks.
• Investment Options: Local ETNs and offshore ETFs available for copper investment.

• Educational Video: Power Hour session on structured products by Kevin Swartz from Standard Bank.
• Features: Capital protection and enhanced upside.

• Sales Update: For 52 weeks ending 25 February, bleak results expected.
• Market Reaction: Stock closed 4.5% higher on news of a plan.

• CPI Inflation: 5.2% for April.
• Primary Surplus: Revenue exceeded expenditure (excluding interest).

• Companies Covered: Combined Motor Holdings (CMH), WeBuyCars, Motus, and Zeda.
• WeBuyCars showed strong sales growth.
• Motus and CMH had high dividend yields.
• Zeda focuses on car rentals and mobility as a service.
• CMH preferred for its consistent performance and dividend yield.

• Companies Covered: Calgro M3* and Balwin.
• Balwin struggling with higher-priced units.
• Calgro M3's flexible pricing strategy favored in current market conditions.

[caption id="attachment_42201" align="aligncenter" width="849"] Calgro M3 vs Balwin[/caption]

• Director Sales: Recent director sales not seen as a significant concern.
• Market Impact: Director selling viewed as a neutral action.

JSE Direct is an independent broadcast and is not endorsed or affiliated with JSE Limited. Views expressed are solely those of the presenter.

* I hold ungeared positions.

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• Anglo-American rejects BHP Group's offer, unveils its own restructuring plan.
• Anglo-American to divest De Beers, Anglo-American Platinum, coking coal in Western Australia, and reduce spending on UK fertilizer businesses.
• Focus on high-quality iron ore and copper assets.
• Discusses shareholder likelihood of accepting Anglo-American's plan over BHP Group's offer.
• Discussion on lab-grown diamonds and potential impacts on the market.

• Tencent's positive results impact Naspers and Prosus.
• NASDAQ and S&P close at all-time highs.
• Analysis of South African market trends, influenced by gold stocks, Naspers, Prosus, Richemont, and Rand strength.

[caption id="attachment_42112" align="aligncenter" width="849"] Top40 close 15 May 2024[/caption]

• Discussion on upcoming elections' market impact.
• NHI bill signed, causing sell-off in healthcare stocks.
• US imposing more tariffs on China, strategic implications discussed.

• Positive financial results from Calgro M3* and Raubex.
• Calgro M3 reports good numbers, discusses share buybacks and future prospects.

[caption id="attachment_42113" align="aligncenter" width="849"] Clagro M3 close 15 May 2024[/caption]

• Raubex impresses with strong financial performance, diversification strategies.

Notable events include Richemont*, Palo Alto, Netcare, Astral, Famous Brands, Coronation, UK and US inflation data, FOMC minutes, and Nvidia results.

* I hold ungeared positions.

Simon Brown

Introduction:

• Simon Brown kicks off the episode discussing the current state of the Rand, noting its stability leading up to the elections despite fluctuations.
• Speculation around ANC's momentum in the polls and potential coalition scenarios.
• The impact of the dollar's weakness on the Rand's performance.

• Simon delves into the concept of structured products, which offer capital guarantees and enhanced returns through strategic investment mechanisms like options and bonds.
• Announcement of an upcoming Power Hour with Standard Bank focusing on structured products.
• Brief overview of actively managed certificates, also at next weeks Standard Bank Power Hour.

• FNB's introduction of new Exchange Traded Notes (ETNs), including a variety of indices and US-listed stocks.
• Explanation of Compo and Quanto variations, tailored to currency impacts.
• Highlights of recently launched ETNs, such as Nvidia, Booking Holdings, Eli Lilly, and Palo Alto Networks.

• Simon provides insights into Amazon.co.za's debut in South Africa, discussing initial observations and comparisons with local competitors.
• Discussion on the potential impact of Amazon's entry on brick-and-mortar retailers and existing online platforms.

• Simon poses the question of whether local small caps on the JSE offer value or pose as value traps.
• Definition and implications of value traps in investments, emphasising the importance of dividends and price appreciation.
• Insights from John Biccard of Investec on potential post-election performance in small caps.
• Examination of various small cap stocks, analysing dividend yields, price-to-book ratios, and earnings potential.
• Simon's perspective on the opportunities and challenges presented by small cap investments, urging caution and strategic analysis.

* I hold ungeared positions.

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• Jerome Powell's statement from the FOMC meeting: "Inflation remains too high and the path forward is uncertain."
• No rate cut was announced at the FOMC meeting.
• Speculation on upcoming rate cut possibilities and their impact on the economy.
• Local economic outlook and potential changes due to the upcoming election.

• BHP Group's* proposal to buy parts of Anglo-American, leading to market speculation.
• Complexities of the deal and potential impact on stock prices.
• Analysis of BHP Group's interest in Anglo-American's assets, particularly in copper
• Potential effects of the deal on the Johannesburg Stock Exchange (JSE) and overall market sentiment.
• Historical context of Anglo-American's significance in South Africa's mining industry.

• Overview of China's economic challenges and recent data indicating resilience.
• Discussion on Chinese stock market performance and factors influencing consumer sentiment.

• Analysis of recent fluctuations in oil prices and underlying supply-demand dynamics.
• Impact of US oil production and global economic conditions on oil prices.
• Implications for South African consumers and petrol prices.

• Update on retail bond rates for May and potential changes in June.
• Sygnia's planned changes to ETFs, including the Fourth Industrial Revolution and Fang AI funds.

Clicks Results and Market Analysis

• Analysis of Clicks' performance in the retail sector and future outlook.
• Discussion on Clicks' valuation and potential investment opportunities.

* I hold ungeared positions.

ff

• Simon analyzes Capitec's recent financial results, highlighting strong metrics such as return on equity, active clients, and app usage.
• However, he notes concerns about the bank's expensive valuation compared to its competitors.

Simon discusses the South African Reserve Bank's recent review, indicating a reluctance for rate cuts in the near future due to inflationary pressures and economic uncertainties.

Key takeaway from the bi-annual Monetary Policy Review of the @SAReserveBank:

Don't bet on a domestic interest rate cut this year. https://t.co/mhRS5vKIFQ pic.twitter.com/sc5p9GPcf5

— Adrian Saville (@AdrianSaville) April 24, 2024

• Simon discusses Sasol's poor performance following a production update, expressing skepticism about its future prospects despite its low stock price.

Simon touches on Tencent's positive performance, gold and oil price movements, and the potential impact on global markets

* I hold ungeared positions.

UK and Local Inflation:

• UK inflation surprises at 3.2%, lowest in over two years.
• US Fed unlikely to cut rates soon, waiting for FOMC meetings.
• South Africa's CPI data for March at 5.3%, showing a positive trend.
• Potential for SA rate cuts, depending on US decisions.

[caption id="attachment_41866" align="aligncenter" width="849"] SA Inflation 5.3% for March 2024[/caption]

• China's GDP surpasses expectations at 5.3%, amid concerns over Fitch downgrade.
• Export data reflects overstocking, driving prices down.
• Despite challenges, China's market appears interesting.

[caption id="attachment_41867" align="aligncenter" width="849"] Chinese GDP YearONYear per quarter[/caption]

• Gold remains strong, targeting $2500.
• Recent attack on Israel by Iran affects oil prices.

• Purple Capital swings back to profit, surprising the market.
• Key financial highlights and insights into EasyEquities performance.
• Exploration of new products and their impact on revenue.
• Analysis of client cohort growth and its implications.
• Positive outlook on Purple Capital's performance.
• Expectations of potential price pullback.

Simon Brown

* I hold ungeared positions.

Boxer just posted ShopRite-level operating margins — so why is Pick & Pay, which owns 65% of it, trading at an implied negative enterprise value?

Simon Brown unpacks the R10bn valuation paradox and whether it's a genuine opportunity.

He also walks through his new AI-powered research workflow, using Claude and ChatGPT to produce and fact-check full initiating coverage reports on Balwin Properties and Raubex.

Plus: gold miners Goldfields and AngloGold Ashanti on costs, Meta at its cheapest forward PE since 2022, and Open Router token data that shows xAI running a distant fourth behind Anthropic, Google, and OpenAI.

WorldWideMarkets is part of JustOneLap.com.

kk

• Recap of Sasol's recent developments.
• Minister's agreement to Sasol's appeal regarding emissions at Secunda.
• Stock bounce and support level analysis.
• Target prices discussion and outlook for Sasol.

• Analysis of platinum group metal (PGM) miners' performance.
• Notable increases in stock prices.
• Consideration of factors affecting the industry, including production cuts and demand for catalytic converters.
• Exploration of whether the current uptrend indicates the beginning of a bull market.
• Discussion on supply and demand dynamics in the PGM market.
• Mention of Sibanye Stillwater's* CEO's forecast.
• Reflecting on year-to-date performance of PGMs.
• Insights into the future trajectory of PGM prices and potential risks.

[caption id="attachment_41807" align="aligncenter" width="849"] PGM and miner moves for the month of April up to the 9th[/caption]

• Overview of Fitch's downgrade of China's outlook.
• Analysis of implications for the Chinese economy.
• Examination of the performance of Chinese stocks.
• Commentary on factors contributing to China's economic struggles.
• Exploration of potential effects on global markets.

• Preview of WeBuyCars' upcoming listing.
• Discussion on the valuation and market cap of WeBuyCars.
• Comparison with Transaction Capital.
• Speculation on market demand for second-hand cars and implications for WeBuyCars' growth strategy.
• Evaluation of WeBuyCars' disruptive potential in the automotive industry.

• Analysis of the South African Reserve Bank's inflation targeting strategy.
• Exploration of the history and purpose of inflation targeting.
• Evaluation of the current inflation target and potential for revision.
• Discussion on the process and implications of lowering the inflation target.
• Advocacy for starting the conversation on revising the inflation target to ensure long-term economic stability.

Simon Brown

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* I hold ungeared positions.

• Oil prices are on the rise, currently trading around $89 per barrel, indicating both demand and supply factors at play.
• Factors affecting oil prices include supply disruptions from Russia and Saudi Arabia's production cuts through OPEC+.

• Concerns about inflation are reflected in the rising price of gold, which is currently trading at all-time highs above $2300 per ounce.

• Despite uncertainty, inflation is not expected to decrease soon, especially with increasing energy costs
• Discussion on the delayed rate cuts by the US Federal Reserve and the global outlook on inflation.

• Goldfield's Chilean mine is expected to produce gold at significantly reduced costs in the coming years, potentially impacting global gold supply.
• Analysis of the time taken for new mines to commence production, highlighting the challenge of meeting future demand.

• SARS reports an additional R10 billion in tax receipts, contributing to a total of R1.7 trillion in tax collections.
• While individual tax collections saw an increase of 8.2%, company tax declined by 9%, reflecting challenges faced by various sectors, including retail and mining.

• Top performing ETFs in the first quarter of 2024 include those focused on international markets, particularly in technology and Japanese sectors.
• Conversely, local ETFs, especially those tied to South African markets, experienced declines.
• Analysis of factors influencing the performance of specific ETFs and their compound annual growth rates (CAGRs).

Simon Brown

• Surprisingly strong results from Old Mutual.
• Despite stagnant GDP growth and population decline, Old Mutual shows strong growth, indicating market share acquisition.
• Expansion into banking sector questioned due to market saturation.
• Stock analysis: Trading around 1184, showing potential support at 1150 and resistance at 1240-1280.
• Considered cheap with PE ratio around 7.7 and dividend yield over 7%.
• Market consensus predicts an average price target of 14.81.
• Skepticism remains regarding the bank launch and overall upside potential.

• MTN's earnings affected by Naira devaluation in Nigeria.
• Earnings per share down 72%, impacted by tax issues and currency devaluation.
• Stock analysis: Chart showing positive signs, with potential for short-term growth.
• Market consensus includes three strong sells, five holds, and four buys.
• Telco sector struggles due to price pressures and constant capital expenditure.
• Limited upside potential for telco stocks, including MTN.

• ADvTech demonstrates strong operational leverage.
• Operational margins increase due to improved student occupancy rates.
• Revenue up 13%, HEPS up 19%, and dividend per share up 45%.
• Stock analysis: Notably increased in value but still offers potential growth.
• Expectations for around 15% growth in the future.
• Simon Brown expresses satisfaction as a long-term shareholder in ADvTech.

• MPC meeting concludes with no change in rates.
• Governor's hawkish stance indicates possible rate cuts later in the year.
• Inflationary pressures expected to persist due to global factors.
• Delayed rate cuts expected due to inflation concerns.

• Simon Brown attends the SALTA Awards.
• Satrix emerges as the big winner with 10 awards.
• People's Choice Awards highlight popular ETFs, with Satrix Top 40 winning for the seventh consecutive year.
• Introduction of a new award category for foreign ETFs.
• Importance of industry events in highlighting the significance of ETFs and listed trackers.

Simon Brown

* Simon holds ungeared positions.

• Recent news on Markus Jooste's fine and tragic passing prompts reflection on justice and mental health awareness.
• Telkom's sale of its towers business for R6.75 billion highlights strategic shifts and potential opportunities in the telecom sector.
• Ongoing rise in oil prices raises concerns about inflationary pressures and global economic impacts.

• Gold prices hit new all-time highs above $2200, reflecting investor concerns and market sentiment following Jerome Powell's recent statements on inflation and monetary policy.
• Gold mining companies show varied responses, with Pan-African, Goldfields, DRD, and Anglogold Ashanti experiencing gains.

• Powell's announcement of no immediate rate cuts and a projected total of three cuts for the year signals a cautious approach towards inflation.
• Rising interest rates pose challenges for companies with significant debt burdens, while those with ample cash reserves stand to benefit.

• CPI data reflects higher-than-expected inflation rates, prompting speculation about potential rate cuts in South Africa and implications for economic recovery.
• Abenomics, Japan's economic policy experiment, demonstrates the effectiveness of unconventional monetary measures in stimulating growth and combating deflation.

• Remgro's net asset value growth raises questions about the effectiveness of its management strategy, despite trading at a significant discount.

Remgro has grown its NAV per share by 5% p.a. since 2010.
Over the same period, the ALSI TR index has done 12% p.a.
If you expect this underperformance to continue (and nothing in their recent capital allocation decisions indicates otherwise), then a fair discount to NAV is…

— Piet Viljoen (@pietviljoen) March 19, 2024

• Contrasting performance with Sabvest Capital highlights the importance of superior returns and effective capital allocation in investment decisions.

• Strong financial results from Sun International underscore challenges and opportunities in the leisure and hospitality sector, amid shifting consumer behaviors and economic uncertainties.

Retire well, we're chatting with retirees about what they've learnt and any tricks they can pass on.

• US inflation has remained stagnant at 3.2% since June of the previous year, defying expectations.
• Despite initial projections, inflation has not reached the anticipated 4% mark, staying just above 3%.
• Discussion on potential implications for the economy and monetary policy, including the possibility of a mid-year rate cut.

• Review of recent challenges facing Pick n Pay and its impact on property stocks and landlords.
• Analysis of Hyprop's trading update and its implications for the broader property sector.
• Discussion on potential strategies for landlords facing challenges from tenant closures and renegotiations.

• Examination of recent market speculation surrounding Quantum Foods and its stakeholders.
• Evaluation of market reactions to news events and projections for future stock performance.

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• Analysis of ABSA's poor financial results and the broader challenges facing the banking sector.
• Comparison of valuation metrics and performance across various banking stocks.
• Preview of upcoming industry event focusing on financial education and market insights.

• Discusses the recent Shoprite results, emphasising excellent performance against a high base.
• Highlights Shoprite's significant CapEx spending, customer savings, and market share gains.
• Compares market cap of Pick n Pay and Shoprite, pointing out the latter's cash reserves.
• Reflects on the historical revenue comparison between Shoprite and Pick n Pay over the past 20 years.
• Shoprite's Competitive Position and Stock Analysis
• Questions whether Shoprite is always destined to be an expensive stock.
• Analyzes the current PE ratio, forward PE, and 10-year mean, suggesting that the stock may not be as expensive as perceived.
• Shares consensus forecasts and target prices for Shoprite, indicating a potential undervaluation.
• Expresses the belief that Shoprite at ±R270 might not be as expensive as it appears, drawing parallels with the valuation of Nvidia.
• Shoprite's Success Factors and Pick n Pay's Struggles
• Explores the factors contributing to Shoprite's success, including central distribution centers and efficiency.
• Contrasts Shoprite's strategy with Pick n Pay's challenges, noting a decline in consumer satisfaction.
• Mentions Pick n Pay's recent financial struggles, including a rights issue and debt increase.

• Addresses the unusual situation of both gold and Bitcoin reaching all-time highs simultaneously.
• Discusses the fears driving gold prices, such as inflation, interest rates, conflicts, and global elections.
• Highlights gold's potential target of $2,500 and the positive impact on gold mining profits.
• Shares the performance of various gold mining stocks over the past three years.

• Updates listeners on Canal+'s revised offer of R125 per share for MultiChoice, which is currently trading at R113.50.
• Discusses the time value and risk value of the deal, expressing the view that this might be the final offer.

• Examines the increase in net finance costs for Sea Harvest, attributed to higher interest rates.
• Acknowledges the challenges faced by Corporate South Africa, including Eskom issues, logistic challenges, and rising interest rates.
• Assures listeners that some of these challenges may start to fade away in the future.

* Simon holds ungeared positions.

• Historical context: peaked in December 1989, 82% drawdown by March 2009.
• Factors contributing to the 80s crash: Yen protection, low rates, speculative bubble.
• Current challenges: aging population, economic complexities, recent inflation.
• Investment options: Sygnia JP (SYGJP) - JSE-traded, and Investec's structured product.

• Warren Buffett's annual letter to shareholders released.
• AGM scheduled for May 4th, details about screening yet to be announced.
• Historical and informative; available on BerkshireHathaway.com.

• City Lodge results: Revenue up 10%, dividend up 20%, HEPS up 10%.
• Occupancy at 61%, pricing power at 65%.
• Challenges in margins due to increased focus on food and beverage.
• Comparison with other hospitality stocks: Sun International, Southern Sun.

• Canal+ acquires 35.01% of MultiChoice voting rights, triggering a mandatory offer.
• Takeover Regulation Panel ruling.
• Speculation on Canal+ offer price, potential sweetening of the deal.

• Bitcoin trading around $59,884, near all-time highs.
• Upcoming Bitcoin halving in April and its potential impact.
• Local perspective on Bitcoin and its role in the market.
• Bitcoin in ZAR trading over a million, emphasising its volatility.
• Discussion on Bitcoin's market cap compared to traditional stocks.

• Pick n Pay's disappointing update: debt doubled, sales going backward.
• Market's negative reaction reflected in the stock price.
• Potential exit strategy if weekly close falls below 2022.

* Simon holds ungeared positions.

Budget 2024 panel.

For the last many years AJM Tax has done a post budget panel which includes Simon Brown and this year was no different. Hosted in Cape Town the panel was;

• Karyn Maughan, senior legal journalist at News24
• Dr Albertus Marias, Director AJM Tax
• Azhar Varachhia, Managing director Alpha plus Capital
• Simon Brown, Just one Lap and MonewebNOW

Below is the AJM Tax one pager of budget highlights. 

• Resistance zone around 26, potential to touch 26.70
• Higher highs, higher lows, horizontal resistance
• Target: 30 bucks to fill the gap
• Comments on Pick n Pay's potential under Sean Summers
• No need for a rights issue, potential market spook if it happens
• Simon's position: Started building, considering more
• Current status: Down 1.7%, trading at 25.30

Pick n Pay close 13Feb24 (daily)

• Transaction Capital planning to list WeBuyCars
• Unbundling process expected in March
• Valuation: 7.5 billion rand
• Key information: Founders' put option on Transaction Capital is off the table
• WeBuyCar's strong performance in January with a record 14,000 cars sold
• Market Cap of Transaction Capital: R6.5 billion
• Opportunities and challenges in SA Taxi business
• Overall assessment: Looking not too bad
• Current stock level: 850c
• Expectation of pro rata shares for Transaction Capital holders
• Timing details expected in the circular

• Gold weaker despite US and UK inflation data
• Current gold price and chart analysis
• Simon's position in Anglogold Ashanti*
• Observations on unexpected weakness in gold price after inflation data

Gold daily chart 14Feb24

• MultiChoice facing a 105 rand Canal+ offer
• Market sentiment: Canal+ likely to come back with a better offer
• Current stock price: 104.63
• Speculation on possible offer prices: 120, 135, or even 160
• Market confidence in Canal+ making a mandatory offer

Global Market Trends and Dollar Strength

• Dollar strength in global markets
• DXY trading at 104.87
• Money flowing into the US due to fear and concerns
• Impact on Rand: Trading at 19.07
• Market skepticism about inflation concerns

DXY (US$ index) 14Feb24 (daily chart)

• Recent US and UK inflation data
• Market reaction to inflation numbers
• Central bank concerns about reaching inflation targets
• Jerome Powell's cautious approach and potential rate cuts
• Local inflation expectations and potential rate cuts in South Africa
• The challenge of getting back to the inflation target

* I hold ungeared positions.

Last week's big story was about tech, starting with Disney, a stock recommended here back in September at ±$80.

• Key financials: Linear networks revenue up 9%, Direct-to-consumer up 12%, Parks up 16%
• Direct-to-consumer still incurred a loss of $400 million
• Consumer products, content sales licensing, and ESPN performance discussed
• Overall, not a knockout result but not terrible; I remain a satisfied shareholder

Big move in streaming sports! ⚾️🏀🏈

Disney, Warner Bros., and Fox are joining forces to create the ultimate sports streaming app, merging ESPN, TNT, and Fox Sports (WSJ).

ESPN alone was 18% of Disney's latest quarter revenue.$DIS $FOX $WBD pic.twitter.com/xSPBko0cMO

— App Economy Insights (@EconomyApp) February 6, 2024

• Advertising revenue up 24% year on year to 38.7 billion
• Other segments discussed, including Reality Labs (MetaQuest)
• Net profit $14 billion, up 35%; stock surged 20%
• Mark Zuckerberg's dividend income from the declared 50-cent dividend discussed
• Positive sentiments about Meta's performance, particularly in comparison to other tech giants

• Canal+ made an offer for MultiChoice at 105 Rand per share
• Market reaction, initial excitement, and stock movement
• Simon's caution about potential risks and timing of the deal
• MultiChoice's response: Board concluded the offer significantly undervalues the group
• Canal+ continued to buy MultiChoice shares, now owning 35.1%
• Discussion on the mandatory offer threshold and potential scenarios
• Regulatory considerations: Foreign ownership rules and competition commissions
  • The price of the mandatory offer must be equal to;
    (i) identical to, or where appropriate, similar to the highest consideration paid by the bidder for those acquisitions and
    (ii) accompanied by a cash consideration, at not less than the highest cash consideration paid if the shares that carry 5% or more of the voting rights were acquired for cash.
• Simon's conclusion: Canal+ likely to succeed, potential challenges, and market dynamics

Simon Brown

Hyperscaler results from Microsoft, Amazon and Alphabet produced numbers that almost don't seem real — combined remaining performance obligations of $1.46 trillion and Q1 capex of $112 billion.

Simon unpacks where that money is going, why copper is the quiet beneficiary, and which JSE stocks give exposure.

Berkshire Hathaway is sitting on $380 billion in cash, roughly 38% of its market cap — a meaningful drag while US markets sit at highs.

The memory makers — Samsung, SK Hynix and Micron — are choosing pricing power over capacity, with SK Hynix on a forward PE of 4.5.

Closer to home, the fuel price hike lands tomorrow with Brent back at $114, putting fragile consumer stocks under pressure. Plus an update on using AI for institutional-grade research and the upcoming JustOneLap events.

WorldWideMarkets is part of JustOneLap.com.

• Canal+, French TV business, offers 105 rand per share for MultiChoice minorities.
• Synergies between the two businesses.
• Legal considerations regarding foreign media ownership.
• MultiChoice closed at 75 rand; market likely to respond positively.

• Hyprop reports positive festive trading for its tenants.
• Transaction Capital plans to list WeBuyCars in March; potential value unlock.
• Evergrande declared bankrupt with over 300 billion dollars in debt.
• Hong Kong economy expanded 3.2% in 2023.
• China overtakes Japan as the world's top car exporter.

Richemont*: Luxury brand with potential in a recovering economy.

[caption id="attachment_41062" align="aligncenter" width="849"] Richemont weekly chart close 31Jan24[/caption]

Calgro M3*: Debt under control, potential dividend, well-managed company.

[caption id="attachment_41063" align="aligncenter" width="849"] Calgro M3 weekly chart close 31Jan24[/caption]

AngloGold Ashanti*: Gold as insurance; geopolitical concerns.

[caption id="attachment_41061" align="aligncenter" width="849"] Anglogold Ashanti weekly chart close 31Jan24[/caption]

Zeda: New listing, unbundling, potential growth.

[caption id="attachment_41065" align="aligncenter" width="849"] Zeda weekly chart close 31Jan24[/caption]

Mr. Price*: Positioned well in the retail sector, positive trading update.

[caption id="attachment_41064" align="aligncenter" width="849"] Mr Price weekly chart close 31Jan24[/caption]

Reminder to sign up for email alerts before live sessions.

Host: Simon Brown

* Simon holds ungeared positions.

Host: Simon Brown
Date: 1 February 2024

dd

JSE Direct Episode 571 for January 25, hosted by Simon Brown.

Simon introduces the idea of transitioning the podcast to a live format using Riverside, allowing viewers to see charts and interact during recordings.

Richemont*:

• Stock surged 10% on better-than-expected trading update.
• Identified as an opportunity last year when it pulled back to R2,500.
• Trading at R2,653 at the time of the recording.

AVI:

• AVI delivered a strong update, but struggling with I&J.
• AVI focuses on defending margins, willing to lose volumes for profitability.
• Potential sale or listing of INJ discussed.

Woolies*:

• Mixed trading update.
• Struggles in Australia, especially with David Jones, while food segment remains strong.
• Concerns about the performance of the clothing segment.

Clicks:

• Mostly a strong update, struggles in UDP (wholesale drug distribution).
• Selling price inflation averaged 7.5%, higher than the previous period.
• Clicks achieved highest-ever daily sales in late December.

Economic Updates:

• December spending records discussed with BankserveAfrica.
• Expectations for rate announcements from local and European central banks.
• Hawkish tone expected from local governor; questions about Jerome Powell's stance.

All-Time Highs:

• S&P 500, Nasdaq, Dow Jones hit all-time highs.
• Russell 2000 still 20% off its highs, considered in bear market territory.
• India's stock market surpasses Hong Kong, becoming the world's fourth-largest share market.

• Simon reflects on recent data and developments in China.
• Population decrease and aging population noted.
• Speculation on a potential $278 billion spending spree to support the market.
• Concerns about state-directed capitalism and common prosperity policies.
• Recent crackdowns in gaming, education, and potential implications for healthcare.
• China's focus on national defense and potential impacts on Taiwan.
• China's shift towards a more inward-looking and self-focused path.

• Speculation on the impact of China's changes on global growth, commodity prices, and investments.
• Simon announces plans to start recording the podcast live, with notifications on social media and newsletters.
• Acknowledgment of the podcast's longevity (571 episodes) and a request for reviews.

Simon Brown signs off, encourages reviews, and mentions future live recordings.

Reminds listeners to take care of themselves and others.

* Simon holds ungeared positions.

In this episode of JSE Direct, Simon Brown discusses various market topics, including the bleak outlook of the Hang Seng Index due to Chinese GDP results.

Positive news for Grindrod with the Maputo Port Development Company's impressive performance.

The rise in uranium prices driven by increasing demand for nuclear power plants, he found two US listed ETFs benefiing from this trend.

[caption id="attachment_40966" align="aligncenter" width="849"] Spot uranium price[/caption]

The approval of 11 Bitcoin ETFs by the SEC. When does the JSE get a crypto ETF?

Upcoming elections in 2024 across 70 countries. Simon explores the question of whether elections truly matter for investors, emphasising historical examples where market reactions were short-term and highlighting the importance of focusing on long-term investment strategies amid political volatility.

Now for the eleventh year in a row, we kick off the new year with a prediction show.

Marc Ashton, Keith McLachlan and Simon Brown put their heads on the block with three wild and woolly predictions for the markets for 2024 followed by a call on the Top40 and ZAR for the year ahead.

Importantly we start each show with a review of the previous year's predictions and you'll find the 2023 predictions show here.

• Position your portfolio for 2024.
• Top local ETFs for 2023.

• Transaction Capital (JSE code:TCP) results swung into a massive loss, no surprise. SA Taxi loss making but overall H2 was better then H1 in all three divisions.
• Purple Group* (JSE code: PPE) results also swung into a loss. But as a discretionary consumer business, why is everybody so surprised?
  • Average client has 1.45 products. This seems low, very low.
  • Philippines not yet regulated, but they not giving up.
  • Project delays.
• Tigerbrands (JSE code: TBS) show a tough environment and RFG (JSE code: RFG) may offer better value.
• Local Q3 GDP at -0.2%.

• Gold at all-time highs.

Charts by KoyFin. Get 15% off a two-year subscription

* I hold ungeared positions.

Simon Brown

Share buybacks are good right? The company uses their free cash to buyback shares which reduces the number of remaining shares such that each share has a higher claim over future profits which adds to their value.

Further they're tax efficient in that paying dividends results in dividend tax.

BUT;

• Firstly, in cyclical stocks you need to be buying back at lows, not highs and the companies usually have no free cash at lows, so either they don't buy back or they do so at highs when they have the cash. Horrid value destruction.
• Secondly, some companies are buying back but also issuing new shares to staff, at times at a rate faster or similar to what they're buying back. This is then effectively an underhand salary to staff. This is especially an issue with large tech stocks, see examples below.
• Thirdly, new share issues are considered non-cash, but ultimately they are cash as you gave somebody real shares that have future claim on profits.
• Fourthly, often acquisitiosn are done with stock increasing the outstanding shares. Many will see this as a free deal as shares don't cost. But they do cost as they reduce every other shares value and if the company has been buybacks, well then they paid cash for those shares, just indirectly.

Locally we do see buybacks, but share issues are relatively small so the impact is less shares and more value per share.

Using IFRS accounting diluted HEPS uses the share count of all outstanding shares PLUS all promised shares not yet delivered. These are basically options that could become shares and gives a way better reflection of the profit, even thugh not yet issued they will potentially come to makret and be issued.

Apple (Nasdaq code: AAPL) has been buying back shares and as such over the last decade it's outstanding shares is down about 38%.

Apple shares outstanding

Meta (Nasdaq code: META) has also been buying back, but they also issue shares at such a pace that over the last decade shares outstanding is basically flat.

Meta shares outstanding

Charts from Koyfin 15% discount for first 2 years

• US October CPI was 3.2%, down from 3.7% in September (after peaking at 9.1% in June 2022) and markets absolutely loved the data. Expectations for Fed rates is now no more raising and cuts starting maybe as soon as the 19-20 March or 30 April - 1 May meeting.
• Shoprite* (JSE code: SHP) trading update shows they still knocking it out of the park and taking market share.
• Woolies* (JSE code: WHL) trading update had more excuses tha a five-year old caught eating all the picnic ice cream.
• Decent Stor-Age* (JSE code: SSS) results with ±10% yield and discount to NAV of ±25%. The yield is nice, but you can get the same in cash right now. But when rates start coming down the yield is more impressive and lower rates could see higher valuations.
• A global luxury ETF

Simon Brown

The problem with telcos

I have long said that telcos such as MTN (JSE code: MTN) and Vodacom (JSE code: VOD) is that they are essentially utilities and should be priced as such.

But actually that statement is wrong.

Sure voice (who still calls using voice?) and data are utilities like water and electricity.

BUT the telcos have a problem, capex.
Yes we're using more and more data but prices keep coming down, I recently bought an effective 80 GB for little over R400. And all that while capex is increasing. They're busy rolling out 5G but as soon as that's done it'll be tine for 6G. It's a never ending tread mill.

• Brent oil is weak and telling us a story about global growth

• Clicks (JSE code: CLS) vs. Dis-Chem (JSE code: DCP) results contrats.

• REITs unloved and cheap, time to buy?

Simon Brown

Updating minister Gordhan's portfolio

Public Enterprises Minister Pravin Gordhan has declared his holdings, we reviewed his portfolio last time in April and there are some interesting changes, he is fairly active in buying and selling. Most notable is the total value is up almost R2million?

• Purple Group* (JSE code: PPE) have introduce a platform fee. Certain behaviours will see the fee waived and I speak to Charles Savage on my MoneywebNOW show Thursday morning.
• Renergen* (JSE code: REN) results show a loss, LNG output for phase 1 ±40% and helium on stream by year end. Phase 2 has been split into two parts and the conditions of the $750million is not a Nasdaq listing but rather a capital raise with a listing for part two of phase 2.
• MTBPS was bleak as expected and we could see some tax hikes in February.
• Gold almost had its highest ever monthly close for October.

* I hold ungeared positions.

US markets hit all-time highs this week even as $166 billion in Trump tariff refunds start processing — a windfall for retailers, but consumers who paid inflated prices at the till won't see a cent back.

Tim Cook is stepping down at Apple with John Ternus taking over, Amazon is spending $11.57 billion to buy Globalstar and build a Starlink rival, and Netflix delivered Q1 results with a $2.8 billion Warner break fee buried in the numbers.

Simon also breaks down the Fed Chair nomination battle, why market recoveries are getting faster, and the sixth anniversary of the day WTI oil went negative.

WorldWideMarkets is part of JustOneLap.com.

Living small, an update

Back in 2017 Simon and his wife down scaled into a small (relative) apartment and also got rid of one of their cars again. As they now move again Simon updates in their experience of living small.

• Famous Brands (JSE code: FBR) results. Revenue up and HEPS lower.
• TigerBrands (JSE code: TBS) loses their CEO and posts a decent trading update.
• Jamie Dimon said central banks' forecasts have been "100% dead wrong".
• Sasol (JSE code: SOL) trading update, lots of movingp arts, but the market not trusting management? That said stock is cheap and we're seeing some upward movement on price.

hh

Renergen* (JSE code: REN), now what?

Late September the price started breaking down and end September a Tweeter started posting about them.

I'm not going to defend every point raised, that's the job of the company and after an initial poor response, Monday saw a more detailed SENS.

Ultimately all research is paid for. Sometimes it is paid for by the company and here the issue is disclosure.

I think the bigger issue is a complete lack of disclosure in our industry. By FinTwit or the fancy analysts, albeit assume the latter is always talking their book, which is fair.

• Know your stock. Like really know it. When I buy a new holding I put together a lis of 3-5 things I like and 3-5 risks. I may be wrong on any of them, but it makes me do the digging and at least have a decent view of both sides of the story.
• Careful of "new" news. It may be accurate (or it may not), but it also often lacks detail which maters. This was mostly the case with the Twitter news on the stock.

• Results next Friday.
• LNG is flowing.
• Helium is not, but company has said they expect the leak repaired this month.
• In short they are in the same place as they were before all this started. BUT.
• They need to do a US capital raise and list in the Nasdaq. A low share price makes this much more dilutive. How this will play out I have no idea.

I hold and continue to hold Renergen*. It was never going to be smooth sailing and the risks are real. Yes they have the gas and helium in the ground, phase one is half working but phase two is large, complex and expensive with real risks.

• Middle East war could get really bad for inflation and rates if oil prices rise markedly.
• Decent Calgro M3* (JSE code: CGR) results.
• Horror Pick n Pay (JSE code: PIK) results.
• Local ETF total returns over the last five years.

* I hold ungeared positions.

There are bold traders. here are old traders. There are no bold and old traders.Bold traders

What is a bold trader and why do they die out?

• Wild swings for the fence
  No position size management
  Stop loss for losers
  Enter outside of system and process

• Famous Brands (JSE code: FBR) trading update, Spur (JSE code: SUR) really has taken the mantel of best QSR/restaurant business on the JSE.

• Very strong US jobs and upward revisions from previous month. But wage inflation only 0.2%. So market was confused but ended happy. Tuesday also saw US 10-year yields moving lower which excited everybody. But I am sceptical, this is only one data point and I think the FOMC hikes at their 31 Oct/01 Nov FOMC meeting.

• Water crisis. This is going to hurt and it not going away any tine soon. Which businesses get hurt most?

• We found a US government bond ETF paying monthly.

Bad news all round (unless you buying).

Almost 40% of US government debt expires in the next four years and will be re-issued at markedly higher rates, 9x higher in some cases.

Money flowing into US bonds for yield.

• This sees less money entering the stock market
• Sees a stronger US$ (check DXY strength, all currncies weaker against US$)

Hits valuations lower as higher rates makes cash worth less in the future, but so far the market has ignored this fact.

• The Top40 closed negative for the year on Tuesday. This after being almost +12% in late January and trading at all-time highs.

• Top40 close 26 September 2023, negative YTD

  Fed and SARB hold rates steady - but very hawkish.

• StatsSA "South African hotels recorded an occupancy rate of 47.3% in July 2023, up from 45.8% in June and 45.5% in May.". But still below the ±50% pre-pandemic occupancy levels.

• Shoprite* (JSE code: SHP) results "2023 was extraordinary".

Chart by Koyfin 15% discount for first 2 years

• Richemont (JSE code: CFR) getting interesting, let's see if support holds.

• [caption id="attachment_40005" align="aligncenter" width="849"] Richemont weekly ~ 07Sep23[/caption]Nampak (JSE code: NPK) nil paid letters are trading, code NPKN. Remember either sell them or take up the rights.
• Calgro M3* (JSE code: CGR) trading statement, HEPS +20% for the first six months ending August.
• The latest PMIs out of Europe all quite weak, not only declining from the previous month, but lower than the preliminary numbers from the middle of last month
• Profit from the Longevity Boom with Healthcare ETFs
• The tax ABCs of buying a property

Simon Brown

* I hold ungeared positions.

• Bidcorp - excellent
• AvdTech* - really good, stock at all-time highs
• Stadio - good student growth
• Motus - poor HEPS, good dividend
• Woolies* - not bad, but wow only got R1.1billion for David Jones
• Sasol - impairments galore
• Adcock Ingram - capacity utilisation is weak
• Aspen - good second half
• KAP - tough out there
• Super Group - strong numbers

* I hold ungeared positions.

Spur and Calgro M3, two stocks I have been watching and both have seen their prices break higher.

• Calgro M3 (JSE code: CGR) builds lower income housing and after a few troube years os back on track.
  • Latest results were for year ending February 2023.
  • PE ±2.5%
  • Cash on hand ±R172million, market cap is ±R440million
  • NAV 951c (including unused land valued at ±30% of NAV) while share price 365c

• Spur (JSE code: SUR) sells fast casual food and the pandemc hurt. Latest results have some base effect as they are for six months ending June 2023.
  • Forward PE ±5x
  • Dividend yield ±14%
  • Spur remains their key brand.

• Thungela (JSE code: TGA) results saw HEPS down 67% which is the same as the price of coal over the last year.
• UBS cuts China's GDP growth forecast for 2023 from 5.2% to 4.8%
• CoreShares ETFs name change to 10X.
• Local inflation for July was 4.7%, a really strong number and better then the market expected, this even as administrative prices kicked in during July. Transport was negative for the period.

Charts by Koyfin 15% discount for first 2 years

Chinese data keeps disappointing, every since the -7.5% export data from April. Expected was a strong rebound after they lifted zero-covid restrictions. But not happening.

Just this week;

• Among 70 Chinese cities, 49 saw a fall in new home prices month-on-month in July from 38 cities the previous month.
• China suspends youth unemployment data after record high.
• Over the last decade they've halved the number of indicators they publish.
• Retail sales lower
• Industrial production lower
• fixed asset investments lower

•  MTN (JSE code: MTN) results had an interesting update on their fintech business. reports were they would list it, but for now Mastercard has taken a stake valuing the business at ±R100billion while MTN market cap is ±R250billion.
• Satrix is shutting down three of the ETFs they got from Absa. They are the Volatility Managed ETFs. They two small and not core to teh Satrix startegy. If you hold them on close 29 September you'll be paid out the NAV. The three are;
  • STXMEQ
  • STXDEQ
  • STXGEQ
• Buying the Nasdaq local or offshore? Which is better?
• Every time is actually different
• How to double your retirement fund

Koyfin 15% discount for first 2 years

US results season opens with Goldman Sachs and Johnson & Johnson both beating expectations — but the more interesting story is what those results don't show yet: the full impact of Middle East conflict and Trump's drug pricing pressure.

Simon also unpacks South Africa's looming fuel crisis and makes the economic case for working from home, a new 100% offshore ETF listing on the JSE from ETFSA, and an ASP Isotopes update for those holding a speculative position.

FNB's FCA-mandated R11.9bn provision for undisclosed UK vehicle finance commissions gets a full breakdown, as does the nuanced reality of the Straits of Hormuz "blockade" — it has T's and C's.

Plus a long-overdue Bitcoin check-in. WorldWideMarkets is part of JustOneLap.com.

Aspen (JSE code: APN) announces a acquisition in Latin America for US$290m on a price/sales of ±3x and PE of ±5x. This is a classic Stephen Saad sort of deal. Strong cash generation to pay down the debt.

After having gone quiet when the balance sheet case under serious pressure (with debt of ±R50billion) Aspen is back?

Chart looking good for a break higher.

Forward PE of ±12x is below 1 standard deviation over last twenty years and looking cheap.

Charts by KoyFin, click here for 15% off a two year subscription.

• FOMC raised 0.25% as expected last week. In the press conference Powell suggested no recession coming and with inflation for June at 3% has the fed successfully threaded the inflation needle without any serious repercussions (so far)?
• MTN (JSE code: MTN) trading update, 169c cost for 'currency moves' likely the Nigerian Naira devaluation.
• Prosus (JSE code: PRX) agrees to sell part of PayU to Rapyd for $610m. They'll keep the Indian market part of the business.
• How is your crypto taxed?
• Nominal vs effective interest rate, know the difference.

Central bakers have very few tools to achieve their mandates around inflation (and in some cases also protecting a currency and aiding GDP growth). Interest rates have a blunt lagged effect and their only other tool is what they say and we need to understand this central banker speak.

Last week it was the South African Reserve Bank MPC rate announcement that left prime unchanged for the first time since November 2021. The vote was close and the governor spent a lot of time saying they had not finished hiking, this was just a pause.

The Federal Reserve FOMC has been saying the same about pausing before more hikes.

But any hikes will surely be data dependent which is what they always say. So the threat of more hikes is central bak speak for don't get too excited.

• Shoprite* (JSE code: SHP) trading update shows just why they are the best food retailer in South Africa, even probably the world. This as they had to spend R1.1billion on diesel for the 52 weeks. This will hurt margins, but they're still profitable.
• The Rand is on a tear, and this time it is not US$ weakness nor commodities booming. It's just good old fashioned people buying our Rand.
• Global luxury ETF, better than buying the watch
• Reducing tax on interest earned

* I hold ungeared positions.

As expected Local CPI for June came in at 5.4%, lowest in twenty months and well within the 3%-6% target range from the South African Reserve Bank. Yes base effect as June last year was the first +7% inflation print of this cycle. 

When do we start talking rate cuts? Truthfully not yet, a pause would be nice eve as the gov always targets 4.5% not the range.

• MPC is Thursday, I expect no raise and can we start talking about rate cuts yet?
• USDZAR currency forecasts from Goldman Sachs:
  • End 2024: 16.00
  • End 2025: 15.00
  • End 2026: 14.00
• Decent UK inflation as it dropped to 7.9% for June vs. expected 8.2%. But still highest in Europe. Italy 6.9%, Germany 6.4%, Netherlands 5.7%, Euro area 5.5%, France 4.5% & Spain 1.9%.
• Pick n Pay (JSE code: PIK) very poor update. "SA sales declined 0.3% (0.0% like-for-like)" while "internal selling price inflation" was 9.5%, so they went backwards at a fairly alarming rate
• ArcelorMittal South Africa (JSE code: ACL). Monday CFO quit after just two weeks and then Tuesday a horror update.
• Transnet selects a private port operator to run the container terminal in Durban.
• Koyfin 15% discount for first 2 years
• The Indian Nifty 50 at all time highs and we have an ETF for that.