/ PayPal announced plans to buy Japanese "Buy Now, Pay Later" BNPL company Paidy Inc. for $2.7B
/ US judge rule against Apple and in Epic Games favour in antitrust lawsuit; judge says Apple's conduct in enforcing anti-steering restrictions is anticompetitive
/ China Evergrande Group default risk ($300bn)
/ U.S. Senate Democrats float stock buyback tax as part of $3.5 trillion bill
/ The World’s Shippers Are Earning The Most Money Since 2008
/ Local Q2 GDP, we’re 1.4% below pre-pandemic levels
/ SARB governor Lesetja Kganyago suggests we work towards a 3% inflation target, with a 2-4% tolerance range
/ FSCA fines Viceroy R50m
/ Result; Shoprite
/ Results; Momentum
/ Results; Bidvest
/ US jobs data slows. Likely means tapering not just yet even as ECB starts talking tapering.
/ New China restriction, kids gaming limited to one hour a day on Friday, weekend days and public holidays
/ Pfizer has recognized over $10 billion in profits from the COVID-19 vaccine alone, making it the best drug introduction in history.
/ After hurricane Ida oil recovery begins with ports and refineries restarting but most production in the Gulf of Mexico is still shut.
/ Chip shortage holds back German car sales in August
/ SA trade surplus at R37bn July vs R55bn June. YTD R290bn.
/ Mediclinic plans to go green in R2.2bn renewable energy deal
/ Results; Murray & Roberts
/ Results; Discovery
/ Results; Implats
/ Results; Aspen
Is this Woolworths’ attempt at Athleisure ?
Crop Top : R249.99
Leggings : R299.99
I am flattered they think I,their customer, is a 20 year old Instagram Fitness star 🤣🤣 pic.twitter.com/B4xsTJ36ho
— Moms 💖 investing (@mommy_moneyza) September 1, 2021
/ Jackson Hole. Powell says nothing new.
/ TSMC, the world's largest maker of semiconductor chips, says it's raising its prices by about 20%
/ Hurricane Ida heading for the Gulf of Mexico, shutting down oil production.
/ China reportedly weighs ban on U.S. IPOs from domestic tech companies with sensitive data
/ Bonang Mohale and his Serialong trust converts a Purple Group loan into 11.46% shares in the group
/ Unemployment 34.4%
/ South African GDP rebased. The economy is 11% larger than previously measured. It is still the second-largest economy in Africa, after Nigeria.
/ National treasury says KZN July violence will take 0.7%-0.9% off 2021 GDP.
/ Sibanye Stillwater results
/ Woolies results
/ New Zealand going into lockdown, the world is getting vaccinated but the pandemic is far from over.
/ Pfizer expected to get full FDA approval for its covid vaccine this week. A whole new business (covid jabs & mRNA possibilities).
/ Tesla wants to build an AI robot
/ Jackson Hole this week
/ China securities regulator signals willingness to work with the US on audits
/ South Africa inflation lower at 4.6% in July 2021.
/ Sasol results
/ Shoprite / Massmart deal
/ ARB Holdings results
/ Metair results
/ US inflation comes in as expected
/ Britain's GDP grew by 4.8% in the second quarter of this year, leaving the economy just 2.2% below its pre-pandemic level
/ Google employees who work from home could lose money
/ US infrastructure bill moving forward
/ India to unveil US$1.35trillion infrastructure bill
/ 100mw power generation laws gazetted
/ Naspers / Prosus swap is unconditional
/ Strong Merafe results
/ MTN results and Sanlam tie up
/ Nedbank results
/ Exxaro and Thungela results
/ US GDP 6.5% , below expectations but the economy now larger than pre-pandemic
/ US moving forward with an infrastructure bill
/ The U.S. debt ceiling officially became operative again on Sunday after a two-year suspension
/ Amazon results see stock down 7%
/ Alphabet results & $50bn buyback
/ Microsoft results, LinkedIn does +$10bn
/ Tencent woes hit JSE (but all-time closing high on Thursday)
/ Results; Anglo Platinum, Kumba Iron Ore and Anglo American
/ Liberty2Degrees results
/ ArcelorMittal South Africa results
/ Treasury considering access to retirement savings
In both cases, this amounted to a dividend yield (DY) of around 10% at the interim stage.
No share buybacks as Anglo American (JSE code: AGL) own a significant majority of the shares and likely want the dividend back at home.
The question is will other miners be as generous or will they do some share buybacks as well?
If commodity prices stay where they are, we'll see the same again in six months and into 2022?
If prices remain the same to the end of 2022 (big if?) we'll get a 40% return from just dividends?
This is what super profits look like.
/ New closing highs for S&P500 & Nasdaq. But Russel2000 is lagging.
/ Apple delays back to the office to October
/ Twitter and Snap - good results
/ China regulator bars Tencent from exclusive rights in online music
/ Big results due this week; Apple & Amazon. So far reported results have been very strong.
/ Rioting impact, retail about 8% of store space impacted. REITs bigger concern.
/ Local inflation drops
/ Anglo Americana and BHP production updates
/ City lodge sells East African assets
/ Cashbuild update
/ Distell update
Risk is good
I got an email from a listener asking about risk free investments on the JSE. Thing is, there is no risk free on the JSE - and that's a good thing.
Without risk there would be no reward.
When I am looking for investments, I always look for the good things about the business. Margins, growth, product and the like.
But I also dig into the risks, competition, input inflation and the like.
The thing is, I like to see risk, I just want risk that I think the company can manage and ultimately maybe even turn into a benefit. For example, new product is absolutely a risk. But what if they disrupt themselves and create a new product that hits sales of their existing product, but creates an entire new category.
Apple did this with the iPhone, killing off the iPod.
When researching into long-term 'til death do us part' investments
I create a short list of the three main features I like in a stock. But I also create a list of the three main risks and I keep a close eye on both lists.
/ US inflation, again above expectations
/ Delta airline results show travel returning
/ US bank earnings as previsions put back into the income statement
/ Netflix looking into gaming
/ QoQ China's GDP increased 1.3% in Q2, 7.9% YoY
/ Rioting impacts as listed companies report details
/ South African Special Risks Insurance Association (Sasria) will cover claims
/ Standard Bank taking out Liberty Holdings
/ Very strong Richemont update
/ Tongaat results
/ Steinhoff increases settlement offer
So the answer here is fairly simple, South Africa has an SOE that covers riot insurance - South African Special Risks Insurance Association (Sasria).
They repeatedly have clean audits (financials are here).
Assets under management is a little over R8billion.
But they have reinsurance.
Pretty much any property insurance you have will include a line item for Sasria and it is very cheap.
For corporates, it is a larger cost every month and the question is are corporates 10% insured or have they done some self insuring.
/ US ten year back at 1.36% after peaking at +1.72% in March
/ Jeff Bezos has stepped down as Amazon CEO
/ OPEC+ couldn’t reach an agreement
/ Fed minutes tell us nothing new, except inflation is higher/faster than they expected
/ US extends the economic blacklist of Chinese companies
/ China wants pre-IPO review of all new listings that have large user data
/ Imperial delisting offer at 6600c
/ Sibanye Stillwater bearish on palladium, bullish on platinum & rhodium
/ MultiChoice hit with R63billion tax bill in Nigeria
/ Nedbank WFH policy, 60% in office ie: 2 days WFH each week
/ Prosus shareholders approve share swap
Markets are as quiet as the street of Jozi, so this week a list of my favourite podcasts, the focus is offshore. I'll return and look at local in a few weeks.
/ US The unemployment rate edged up to 5.9% in June
/ US home prices rose by 14.6% in April, the largest gain in 30 year
/ S&P 500 closes green 7 days in a row, record is 8 days (US markets closed Monday)
/ RobinHood proposed listing ~ $40bn valuation
/ Didi Chuxing lists on NYSE, market cap $69bn & Chinese regulator blocks new accounts
/ Modest Q2 for JSE, TOP0 -1.2% (+11% YTD), Fini15 +6.8% in Q2
/ SARB turned 100 last Wednesday
/ May saw another +R50billion trade surplus tax receipts
/ Invicta results
/ AdaptIT shareholders vote for 700c Volaris delisting offer
/ Etion results. The story is they selling LAWTrust business for R245million when the market cap of the entire company is R22million. CEO says plans to return value and delist
SA recorded another trade surplus in May of R54.6billion. This is the 3rd month in a row that the surplus has been above R50billion.
/ Gold a flat week after the previous weeks sell-off
/ S&P500 and Nasdaq back at all-time highs after the previous week's aggressive sell-off
/ Global shipping remains under severe pressure as Chinese port shut after a covid-19 outbreak
/ US gets an infrastructure bill, but maybe not. It’s messy
/ Omnia results paid special dividend and SARS dispute
/ Growthpoint trading update
/ Old Mutual to spin off third of their Nedbank holding
/ May CPI 5.2% with core inflation at 3.1%
/ +50s can register for vaccines from Thursday
/ Absa’s Q2 2021 Manufacturing Survey shows rising manufacturer confidence
The third wave of the pandemic in South Africa is so are very much a Gauteng issue as it records higher daily new cases above the peaks from the first and second waves.
This is no surprise to anybody. But what was notable is that lockdown restrictions remain very relaxed (albeit rumours that we'll see tougher restrictions soon). I had expected a harder lockdown for the third wave.
Expecting a harder lockdown I was very cautious on local hospitality stocks.
The Yoco small business turnover index shows activity at 78% of the levels pre-lockdown after hitting 128% at the end of May 2021. So even without harder lockdowns, we are being more cautious but this is still well ahead of the 40% odd we saw during the end of the second waves lockdown.
We also have some Stats SA data on occupancy in tourist accommodation. Here we're back at around 30% for the end of April and that's back where we were before the second wave arrived.
Hotels in South Africa recorded an occupancy rate of 26,8% in April 2021, up from 23,2% in March and 17,9% in February.
— Stats SA (@StatsSA) June 21, 2021
Airports Company SA (ACSA) data shows domestic travel picking up to around 60% of pre-pandemic levels. International is at around 15%-20% and regional around 25%-30%.
So in short this new wave is still early days and is hurting, but so far not as bad as I had feared (occupancy data is a month out of date). Certainly ahead of the third wave we were seeing improved tourist activity even if still below the pre-pandemic levels.
So what stocks to look at? I am not rushing in, but they're on a watch list for when we're past this third (and hopefully final) wave.
/ Markets spooked by FOMC statement
/ Gold under pressure
/ Brent crude slips but holding above $70
/ TikTok owner ByteDance reports $2.1bn loss
/ Krispy Kreme returning to market with IPO
/ Adobe results
/ Rand under pressure
/ Capitec expects half-year earnings to rise 292%
/ Sephaku update and PPC results
/ Mediclinic to produce own power
/ Alexander Forbes results, retrenchments almost back to ‘normal’ levels
/ Stricter lockdown
/ U.S. economy added 559K jobs in May and unemployment fell to 5.8%
/ G7 nations set the minimum global corporate tax rate at 15%
/ AMC issues shares above the current share price
/ Biden expands blacklist to 59 Chinese companies
/ Apple staff back to work 3 days a week, starting September
/ Volaris ups offer to AdaptIT to 700c
/ Sibayne Stillwater to buy back 5% of shares
/ SARB selling their stake in African Bank
/ Famous Brands results
/ Prosus to buy Stack Overflow of US$1.8billion
/ Mark Barnes sells up to half his Purple Group shares