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

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* I hold ungeared positions.

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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:

• 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.

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.

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[/caption]

Simon Brown

All charts by KoyFin | Get 10% off your order

* 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.

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

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

Coalition Talks:

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

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Simon Brown

All charts by KoyFin | Get 10% off your order