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

• 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

• 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.

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. 

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)

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

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)

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.

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

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

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

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[/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]

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