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.
Offshore
/ 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
Local
/ 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.
Read more here: https://t.co/Pzft0bs8oi#StatsSA pic.twitter.com/rcjbJcUHdV
— 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this new wave is still early days and is hurting, but so far not as bad as I had feared (occupancy data is a month out of date).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.
Offshore
/ 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
Local
/ 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
Offshore
/ 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
Local
/ 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
[caption id="attachment_29849" align="aligncenter" width="888"] Fini15 ~ weekly[/caption]
Listing on the BEE board of the JSE on 28 May.
No IPO process ahead of that.
R40 listing price.
But trades subject to supply / demand.
I would expect it to boom initially then settle around R40.
No lock-in period, so you can buy / sell as you wish.
This is very much a long-term investment.
Will be ownership of global AB Inbev (JSE code: ANH) shares worth R5.4billion.
AB Inbev market cap is around R1.8trillion. So a small slice of the entire group of less than 1%.
There is debt included, geared about 55% at 70% of prime payable over ten years.
This is a long-term investment option and NOT a get rich quick scheme.
We have also seen some BEE schemes fail spectacularly.
Not all stockbrokers are enabling trading in the shares. SAB have a trading desk, call them on 0861 900 903.
Only BEE qualifying investors can buy the shares.
hmmm, wasn't it just last year Heineken was hating on us so much they was canceling projects and threatening to take their beer and go home ..
— Simon Brown (@SimonPB) May 18, 2021
jjjjj
Special shares usually with high voting rights and often with limited or zero economic rights.
They enable insiders to retain voting control even while they may not actually control the company.
The most well known are the Naspers~N (JSE code: NPN) A shares that give control to a few parties.
Shoprite* (JSE code: SHP) has the same for Christo Wiese which he tried to sell back to the company. But they have zero economic rights and only are votable by Wiese
More recently it surprised many that while Remgro (JSE code: REM) owns a little over 31% of Distell (JSE code: DGH) they ave a pile of B shares that gives them 56% voting control.
In the older days, companies used pyramid structures, but those have long since largely left the JSE and no new ones can be listed.
The challenge is how to know about them? The annual report will detail them.
Generally, they don't matter massively, until they do. And then they matter. Wiese failed to receive the required number of votes to get back onto the Shoprite board in 2018, but then he used his special shares to basically override shareholders.
JSE – The JSE is a registered trademark of the JSE Limited.
JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.
Offshore
/ US inflation
/ Disney results
/ US pipeline shut down due to ransomware attack
/ UK rejects (softly) Bidens plan for global corporate tax rate
/ Chinese industrial production and retail sales due Monday
Local
/ Naspers / Prosus share swap
/ Raubex results
/ Ascendis swaps debt for assets
/ Clicks buys Pick n Pay pharamacy business
/ Cape Town airport has best month since lockdown, still 40% down from 2019
/ Long4Life results and NAV discount
More Naspers shuffles
Naspers (JSE code: NPN) and Prosus (JSE code: PRX) have announced another deal to try and close the discount between themselves and their holding in Tencent (Hong Kong code: 700).
Prosus will acquire up to 45.4% of Naspers shares via a share swap whereby holders of Naspers can get 2.27 new Prosus shares for every one Naspers share.
This will increase Prosus liquidity (in theory) and markedly reduce Naspers weighting in the Top40 and Swix indices. The latter argument makes sense and is likely a part of the reason for the discount that Naspers experiences. The problem is that with the weighting above 20% most funds are not allowed to hold over a certain percentage (lower than the Naspers weighting), so they can not go overweight, or even match index weight, for Naspers and this reduces potential buyers of the stock.
Will it work? Maybe.
They have tried many other tricks, unbundling Prosus and earlier MultiChoice (JSE code: MCG) and that hasn't worked. But the weighing in the indices is a real problem.
Of course, the very easy fix here is to simple unbundle the Tencent holding - but that's not going to happen any time (aside from some sales every three years as we saw recently).
JSE – The JSE is a registered trademark of the JSE Limited.
JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.
Offshore
/ US jobless claims below 500k, lowest since pandemic started. But overall employment slips to 6.1%, up from 6% in March.
/ Janet Yellen says rates will need to rise
/ ECB Official Calls for Accepting Inflation Overshoot
/ Saudi Aramco Q1 profits +30%
/ Gold +$1,800
Local
/ Moodys skips reviewing SA credit rating
/ MTN update
/ Sibanye Stillwater update
/ Kaap Agri results
/ Karooooo results
/ Anglo American gets coal demerger shareholder approval
What an incredible milestone achieved today. Across all platforms & partners we've reached 1 million registrations. @CapitecBankSA @SATRIX_SA @BidvestBankSA @EasyEquities hard to describe how grateful I am to all you #invstr legends that challenge us to rise each day. 🙏🙏🙏
— Charles H Savage (@CharlesHSavage) May 5, 2021
Palladium above US$3,000 (all-time high)
[caption id="attachment_26363" align="aligncenter" width="888"] Palladium weekly chart[/caption]
Platinum above US$1,200 (six-year high)
[caption id="attachment_26365" align="aligncenter" width="888"] Platinum weekly chart[/caption]
Rhodium above US$29,000 (all-time high)
PGMs are considered a 'green' metal in that they help reduce CO2 emissions.
Demand remains above supply.
But the listed miners are languishing nowhere, why?
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JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.
Offshore
/ April a green month for US indices
/ Palladium almost $3k and copper almost $10k
/ Knock out results; Microsoft, Apple, Alphabet & Amazon
/ US Q1 GDP +6.4%
/ Biden 100 days
Local
/ Resi10 the main local index green in April (midCap & Property did well)
/ Gilbertson quits Gemfields
/ Tongaat update, just misses debt reduction targets
/ Steinhoff to list Pepco in Warsaw
/ Astral update
/ AdaptIT needs another week to decide on the two offers
With the Revego listing delayed the money I put into the book build last Thursday has not been seen since. The company was supposed to issue a SENS on Monday and list on Thursday, but we heard nothing until Thursday morning. It has been delayed by a few days.
What struck me was that I was not worried about the chunk of money that I had put into the book build and which I have not see or heard from in a week now. The reason for my lack of concern is the protections the JSE exchange offers.
This of course does not stop crookery from executive teams nor does it stop businesses from going bust.
JSE – The JSE is a registered trademark of the JSE Limited.
JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.
JSE – The JSE is a registered trademark of the JSE Limited.
JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.
Offshore
/ Coinbase lists
/ China Q1 GDP 18.3%
/ Reports Jack Ma will divest from Ant Group
/ Gold looking strong, but miners lagging (Rand strength?)
/ Just more than half of U.S. adults have gotten at least one COVID-19 vaccine dose ~ CDC
Local
/ Rand strength
/ Karoooo lists on Wednesday
/ Capitec results
/ EOH looking better
/ Sasol goes green
/ Local CPI later this week
Two stocks that I own; Purple Group* (JSE code: PPE) and Capitec* (JSE code: CPI). Both with really good results and I'll go into the numbers in detail.
Capitec monthly chart since listing
Purple Group monthly chart since listing
JSE – The JSE is a registered trademark of the JSE Limited.
JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.
Offshore
/ New highs for S&P500 & Nasdaq
/ Yellen wants global minimum corporate tax rate
/ Semi conducter chip shortage continues to hurt production
/ China slaps Alibaba with $2.8 billion fine in anti-monopoly probe
/ Goolge pushes back on WFT, wants staff back in the office from September
Local
/ Prosus sells another 2% of Tencent
/ Purple results
/ IMF says local GDP 3.1% in 2021 and 2% in 2022
/ Anglo exits SA coal by setting up a new JSE-listed miner
/ 650c Cash offer for AdaptIT
/ Pick n Pay update
This is a problem for both traders and investors.
Part of the problem is the thrill of a winner, we've made money and we want to lock in that profit so the thrill doesn't go away, and we sell - but we sell way early.
The bigger issue is what are you trying to achieve?
Analysis of previous winners you exited early. Why did you do exit and what could you have done to stay in longer? What about some you exited at the right profit point?
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JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.
JSE – The JSE is a registered trademark of the JSE Limited.
JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.
Offshore
/ S&P500 closes at all-time high, Nasdaq still 6% off highs
/ US Personal Spending fell 1.0% in February, slightly more than expected, but January spending was revised upward by a full percentage point to 3.4%.
/ Ever Given remains stuck in Suez Canal
/ Intel to build new silicon chip fab plants for $20bn
/ Tencent results
/ WeWork to go public, via a Spac, with $9bn valuation
Local
/ CPI 2.9% for Feb and MPC no change
/ Magda Wierzycka quits as Sygnia CEO
/ AdvTech results
/ Old Mutual results
/ Remgro results overshadowed by 40% discount to NAV
/ Goldman analysts say go long on Russia, South Africa stocks
A small rise in US ten-year treasury yields and a little inflation and suddenly it is the end fo the world for markets.
Inflation is likely to move higher in the US as the stimulus money gets spent. This is different from the stimulus after 2008/9, which went to banks who hoarded it and stuck it into markets. This time money goes directly to consumers who'll send the money.
But the Federal Reserve is happy that structural inflation is not returning and a little inflation in the system isn't the end of the world.
But to listen to many experts here comes hyperinflation and the end of the world as high inflation = high rates and as such money moves into income funds rather than equity.
Further if one digs into Modern Monetary Theory (MMT) government spending is not the end of the world, certainly for the US government. Here's a fun one, to deal with inflation, raise taxes? In fact have an automatic process that removes congress, if inflation heads above say 3%, taxes go up 4%. Above 5% taxes increase 8% and so on.
But back to the panic, stop. Markets never go in a straight line and suddenly getting all bearish because of some selling is going to make sleeping ever again impossible.
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JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.
MidCap index is up about 10% so far in 2021, nice and pretty much exactly what thee Top40 has done. Of course, the Resi10 has done almost 20%, but the winner, small caps up some 20%.
The property index has returned single digits in 2021 so far, but technically it is looking ready to break higher.
We also now have all the large bank results and they were okay. The index is up some 5% and looking tired. There is value here but not sure there is any need to rush.
Property index, daily chart[/caption]
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JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.
Offshore
/ $1.9trillion stimulus bill signed by Biden and on route
/ Tencent on notice as China cracks down on fintech players
/ The tech-heavy Nasdaq has underperformed the Dow for four straight weeks — a first since 2016
/ Friday 1,357,111 people were screened at U.S. airports, marking the highest number of travellers since the pandemic began.
/ U.S. 10 Year Treasury hits 1.625
/ Huawei listed anew as a threat to US national security
Local
/ GDP for 2020 -7%
/ SA records first annual surplus in 2020 (last was 2002)
/ Woolies sells Elizabeth Street Property
/ MTN results (dividend cancelled) and Ambition 2025
/ AfroCentric results
/ Aspen results see more debt slashed