Info

JSE Direct with Simon Brown

Weekly podcast hosted by Simon Brown covering the JSE and listed companies.
RSS Feed Subscribe in Apple Podcasts
JSE Direct with Simon Brown
2024
July
June
May
April
March
February
January


2023
December
November
October
September
August
July
June
May
April
March
February
January


2022
December
November
October
September
August
July
June
May
April
March
February
January


2021
December
November
October
September
August
July
June
May
April
March
February
January


2020
December
November
October
September
August
July
June
May
April
March
February
January


2019
December
November
October
September
August
July
June
May
April
March
February
January


2018
December
November
October
September
August
July
June
May
April
March
February
January


2017
December
November
October
September
August
July
June
May
April
March
February
January


2016
December
November
October
September
August
July
June
May
April
March
February
January


2015
December
November
October
September
August
July
June
May
April
March
February
January


All Episodes
Archives
Now displaying: Page 1
Jul 17, 2024

SA GDP Growth Prospects
  • IMF's projection: 0.9% GDP for South Africa this year.
  • Potential factors for growth next year:
  • Reduced load shedding could add 1% to GDP.
  • Two-pot system introduction, expected to inject around 40 billion rand into the economy.
  • Potential rate cuts: half a percent by the end of the year, possibly 1% by mid-next year.
  • Inflation targeting at 4.5%.
  • Optimistic outlook with a 60-70% probability of achieving 3% GDP in 2025.

South Africa GDP South Africa GDP

Delistings and Market Movements
  • Bell and Sasfin delisting announcements.
  • Other potential delisting candidates in the small-cap space.
  • Importance of constructing a portfolio that can benefit from economic growth and potential takeouts.

Bell weekly chart Bell weekly chart

Pick n Pay Rights Issue
  • Explanation of the rights issue and its implications.
  • Instructions for shareholders on handling nil paid letters.
  • Simon's perspective on waiting for dust to settle before considering Pick n Pay shares.

 

Property Stocks and Income ETFs
  • Analysis of South African property stocks and their recent performance.
  • Attractive yields in local and international income ETFs.
  • Recommendation to explore defensive income stocks and ETFs for potential investments.
  • Find local ETFs here.
Interest Rate Outlook
  • MPC and FOMC meetings' impact on interest rates.
  • Simon's forecast on rate cuts in South Africa and the US.

Simon Brown


* I hold ungeared positions.

 

Jul 3, 2024
Load Shedding Update
  • Milestone: 100 days of no load shedding by Friday.
  • Factors: New capacity online, Kusile unit 5 (800 MW), upcoming additions from Medupi and Koeberg.

Impact:

  • Reduced GDP loss (previously 1.8% of GDP due to load shedding).
  • Positive effect on inflation and economic stability.

Winners:

  • Retailers: Shoprite*, Pick n Pay, Spar (less expenditure on diesel).
  • Manufacturers: Invicta, Hudaco (benefit from increased customer stability).
  • Real Estate: REITs with shopping centers, reduced generator use.
Interest Rates
  • Jerome Powell's Speech: Potential for a single rate cut in November.
  • Impact on Markets: Minimal immediate impact, with expectations already priced in.
  • Local MPC Meetings: Predictions for rate changes on 19 September and 21 November.
Market Insights
  • Mr Price*: Ex-dividend yet the stock price increased, indicating strong sector performance.
Tesla Analysis
  • Market Share: Decline in second-quarter sales but maintains a significant market share (~50%).

Challenges:

  • Increased competition from other EV manufacturers.
  • Need for cheaper models.
  • Significant share dilution over the years.
  • Stock Performance: Historical highs and current rebound to 231.
  • Future Prospects: Continued relevance in the EV market despite competition.

[caption id="attachment_42560" align="aligncenter" width="849"]Tesla weekly chart | 02 July 2024 Tesla weekly chart | 02 July 2024[/caption]

SARS Tax-Free Changes
RSA Retail Savings Bonds

Simon Brown

* I hold ungeared positions.

All charts by KoyFin | Get 10% off your order

 

Jun 26, 2024

Key Takeaways

  • MultiChoice Trading Opportunity: Potential for profit if the Canal+ deal goes through, despite current low stock prices.
  • Futures Trading: Importance of understanding margin, liquidity, and strategy when trading ALSI and ALMI futures.
  • Market Conditions: Current cheap valuation of SA Inc stocks presents opportunities, pending political stability and cabinet announcements.
MultiChoice Mis-pricing:
  • Discussion on the 125 Rand mandatory offer from Canal+ for MultiChoice.
  • Current stock trading at 102 Rand due to poor financial results.
  • Analysis of Canal+'s offer document, potential deal completion, and possible trading opportunities.
Index Futures - ALSI and ALMI:
  • Detailed overview of trading ALSI (All Share Index) and ALMI (All Share Index Mini) futures.
  • Explanation of points trading, margin requirements, and contract specifics.
  • Tips on trading strategies, including liquidity considerations and handling overnight gaps.
  • Trading as a side hustle, watch the video.
Market and Stock Updates:
  • Cabinet Announcement Awaited: Market reactions and fluctuations in the Rand.
  • Individual Stocks: Analysis of Mr. Price*, Foschini Group*, Nedbank, Spur, and CMH*.
  • Banking Sector: Observations on price to book ratios and the overall market valuation of SA Inc stocks.

Simon Brown

All charts by KoyFin | Get 10% off your order

* I hold ungeared positions.


dd


 

Jun 19, 2024
Face-Ripping Rally on the JSE:
  • 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 and Resource Stocks:
  • RAND trading under 18, affecting resources positively.
  • Potential for RAND to strengthen further, possibly reaching 17.
Coalition Government and Market Impacts:
  • 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.
SA Inc Stocks and ETFs:
  • 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.
RSA Retail Savings Bonds:
Inflation and Interest Rates:
  • 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.
Market Opportunities:
  • 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.

 

Jun 12, 2024
US Inflation:
  • 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.
Company Results:

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.
Interesting Stock:
  • Contemporary Amperex Technology Company Limited (CATL):
  • Sector: Battery technology for EVs and corporate solutions.
  • Market Performance: Positive analyst ratings, promising future prospects.
Renergen*:
  • Helium Production: Helium is flowing, but further testing is required.
  • Challenges: Significant delays and ongoing testing phases, but progress is being made.
Santova:
  • Stock Movement: Changes in buyer and seller dynamics impacting stock price.
  • Insights: Importance of identifying market movers in stock trading.
Political Developments:
  • 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 USDZAR | 12 June 2024[/caption]

Simon Brown

All charts by KoyFin | Get 10% off your order


* I hold ungeared positions.

Jun 5, 2024

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.
Rainbow's Return to JSE:
  • 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?
OPEC+ Impact on Oil Prices:
  • Members agreed to cut voluntary production cuts
  • Oil crashed
  • As did Sasol

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

Q1 GDP Results:
  • Negative Q1
  • Q2 should be slightly better thanks to reduced load shedding
  • But election will have worried investors.
Santova Stock Analysis: 
  • Buyer at 750c
  • Seller at 760c

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

Coalition Talks:
  • ANC is talking with everybody
  • They seem keen on a governmnt of national unity
  • Rand volatile
Recent uploads onto Just One Lap

Simon Brown

All charts by KoyFin | Get 10% off your order


 

May 30, 2024

 

Election Results Impact on Markets
  • 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 Rand | 1pm 30 May 2024[/caption]

Pepkor Results:
  • 9.5% revenue growth.
  • 24.5% growth in fintech, now 12% of the business.
  • Pepkor sells 7 out of 10 smartphones in South Africa.
Woolies (Woolworths) Update:
  • 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.
Zeda Results:
  • 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 Billiton and Anglo American Merger
  • 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.
Market Insights
  • 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.
Commodity webcast with Johann Erasmus available on Just One Lap.
  • 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.

May 23, 2024

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.

Anglo American and BHP Group
  • 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* Results
  • 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 Market
Structured Products
Pick n Pay's Plan
  • Sales Update: For 52 weeks ending 25 February, bleak results expected.
  • Market Reaction: Stock closed 4.5% higher on news of a plan.
South African Economic Indicators
  • CPI Inflation: 5.2% for April.
  • Primary Surplus: Revenue exceeded expenditure (excluding interest).
Vehicle Sector Analysis
  • 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.
Home Building Sector Analysis
  • 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 Calgro M3 vs Balwin[/caption]

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

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.

All charts by KoyFin | Get 10% off your order


 

May 16, 2024
Anglo-American vs. BHP Group
  • 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.
Market Insights
  • 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 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.
Company Highlights
  • 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 Clagro M3 close 15 May 2024[/caption]

  • Raubex impresses with strong financial performance, diversification strategies.
Preview of forthcoming corporate earnings announcements and economic data releases.

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

May 8, 2024

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.

Structured Products:
FNB's New ETNs:
  • 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.
Amazon.co.za's Arrival:
  • 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.
Exploring Small Caps:
  • 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.

All charts by KoyFin | Get 10% off your order

May 2, 2024
Rate Cuts and Economic Outlook
  • 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 Interest in Anglo-American
  • 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.
Chinese Market and Economic Data
  • Overview of China's economic challenges and recent data indicating resilience.
  • Discussion on Chinese stock market performance and factors influencing consumer sentiment.

Oil Market Dynamics
  • 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.

Retail Bonds and Sygnia ETF Changes

Clicks Results and Market Analysis

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

* I hold ungeared positions.

 

Apr 24, 2024

ff


Capitec Results:
  • 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.
SARB Monetary Policy Review:

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.

 

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

Other Market Updates:

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

* I hold ungeared positions.

 

Apr 17, 2024

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 SA Inflation 5.3% for March 2024[/caption]

China and Commodities:
  • 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 Chinese GDP YearONYear per quarter[/caption]

PGMs, oil, gold, and other commodities.
  • Gold remains strong, targeting $2500.
  • Recent attack on Israel by Iran affects oil prices.
WeBuyCars listing and potential market impact.
Transaction Capital analysis and investor considerations.

Purple Capital* Results:
  • 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.

 

Apr 10, 2024

kk


Sasol Secunda Reprieve
  • 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.

PGM Miners' Performance
  • 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 PGM and miner moves for the month of April up to the 9th[/caption]

Fitch Cuts China's Outlook to Negative
  • 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.

WeBuyCars Listing
  • 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.
Inflation Targeting Discussion
  • 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

Charts by KoyFin, use this link for 10% off your first order.

* I hold ungeared positions.

 

Apr 3, 2024
Commodity Market Analysis
  • 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.
Implications of Goldfield's Chilean Mine Production
  • 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.
Tax Collection Insights from SARS
  • 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.
Performance Review of ETFs (full list here)
  • 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



 

Mar 28, 2024

 

Old Mutual Results:
  • 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 Results and Analysis:
  • 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* Results and Operational Leverage:
  • 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.
Monetary Policy Committee (MPC) Meeting Insights:
  • 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.
SALTA Awards Highlights (full details here):
  • 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.


 

Mar 22, 2024
Market Updates:
  • 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.

Market Analysis and Insights:
Gold's Surge:
  • 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.
Interest Rates and Economic Outlook:
  • 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.
Inflation and Monetary Policy:
  • 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.
Company Updates and Reflections:
Remgro Results:
  • Remgro's net asset value growth raises questions about the effectiveness of its management strategy, despite trading at a significant discount.

 

  • Contrasting performance with Sabvest Capital highlights the importance of superior returns and effective capital allocation in investment decisions.
Sun International:
  • Strong financial results from Sun International underscore challenges and opportunities in the leisure and hospitality sector, amid shifting consumer behaviors and economic uncertainties.

Mar 14, 2024

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


US Inflation Trends:
  • 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.

US CPI 

Local Property Market Concerns:
  • 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.
Quantum Food and Market Speculation:
  • Examination of recent market speculation surrounding Quantum Foods and its stakeholders.
  • Evaluation of market reactions to news events and projections for future stock performance.

Get 10% off your first KoyFin order

Financial Sector Insights:
  • 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.

 

Mar 7, 2024

 

Shoprite* Results and Market Comparison
  • 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.
Gold and Bitcoin at All-Time Highs
  • 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.
Canal+ Offer for MultiChoice
  • 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.
Finance Costs and Corporate South Africa
  • 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.

Feb 28, 2024
Nikkei 225 reached a new all-time high after 35 years
  • 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
City Lodge Results
  • 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.
MultiChoice Canal+ Offer
  • 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 and Bitcoin Halving
  • 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* Update
  • 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.

 

Feb 22, 2024

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.AJM Tax budget 2024 

Feb 14, 2024
Pick n Pay* Chart Analysis
  • 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) Pick n Pay close 13Feb24 (daily)

Transaction Capital and WeBuyCars
  • 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 Price Movement
  • 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 Gold daily chart 14Feb24

Canal+ Offer for MultiChoice
  • 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) DXY (US$ index) 14Feb24 (daily chart)

Inflation Analysis
  • 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.

Feb 7, 2024
Disney results:

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

 

Meta (formerly Facebook) Earnings:
  • 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+ Offer for MultiChoice:
  • 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

Feb 1, 2024
Breaking News: Canal+ Offer for MultiChoice:
  • 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.
Market Updates:
  • 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.
Cristal Challenge Stock Picks:

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

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

Closing Remarks:

Reminder to sign up for email alerts before live sessions.

Host: Simon Brown

* Simon holds ungeared positions.

Host: Simon Brown
Date: 1 February 2024

Jan 25, 2024

dd


Introduction:

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.

Market Updates:

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.
Global Market Highlights:

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.
China in trouble, is it over? Should we be worried?
  • 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.
Conclusion:
  • 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.
Closing:

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

Reminds listeners to take care of themselves and others.

* Simon holds ungeared positions.

 

1 2 3 4 5 6 7 Next » 21