Afrimat: large with Lafarge

Good morning Voornaam,

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Afrimat's acquisition of Lafarge has been given the green light by the Competition Tribunal. Ellies has been given the red light by the universe, banished into pending liquidation. MC Mining's independent board has lost the fight against Goldway. Tharisa has achieved consistent PGM output this quarter. Get these updates more in Ghost Bites, brought to you by Fedgroup.

There's a brand new Ghost Wrap podcast that brings you a useful overview of four recent examples of M&A on the local market. I covered MultiChoice / Canal+, Grindrod Shipping / Taylor Maritime, MC Mining / Goldway and the recent Sanlam deals related to Shriram in India. ​Brought to you by Mazars, you can get your fix in this fast-paced podcast.

With a new episode out tomorrow, don't miss out on the Magic Markets podcast and the latest on Accenture and FactSet. These offshore companies have had recent pressure on their share prices.​

Jeremy Maggs is a highly familiar name in local broadcasting and he hosts Investec's No Ordinary Wednesday podcast. The latest episode features award-winning fund managers Barry Shamley and Peter Vogel, bringing you their view on the markets. This podcast is brought to you by Investec and you can (and should) listen to it here>>>

Artificial, or Artificial Intelligence? AI is dominating headlines everywhere, which means opportunities and risks. To discuss this phenomenon, Nico Katzke of Satrix joined me on the latest Ghost Stories podcast. Find it here>>>

​​If you thought the spiders were the most frightening things in Australia, think again. Dominique Olivier brings you the story of emus, guerrila warfare tactics and a battle over wheat fields that gives you an incredible view of the post-WWI and Great Depression hardships. Give yourself the best watercooler story in the office today by reading this excellent article>>>​

Events:

Bell Equipment is up next on Unlock the Stock. With plenty of activity around that stock in recent times, driven by strong earnings on one hand and the lack of a dividend on the other, this is sure to be a fascinating conversation with the management team. Put on your analyst hat and sign up to attend the event where you can pose your questions to the team. Attendance is free but you must register here>>>

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LISTEN: Ghost Wrap - the M&A edition

LISTEN: Artificial, or Artificial Intelligence?
(with Nico Katzke of Satrix)

LISTEN AND READ: The Investec Nikkei 225 Autocall
with Brian McMillan of Investec

READ: Emus with Guerrilla Tactics
(by Dominique Olivier)

Local company news:

Ghost Bites is brought to you by Fedgroup.
Afrimat has quite the dealmaking track record, so the market pays attention when there's an acquisition being made by the group. The deal for Lafarge South Africa gives Afrimat a much larger footprint in construction materials. It won't be easy to get it right, but it should be pretty lucrative if Afrimat's operational efficiencies can be embedded in the target. The Competition Tribunal has approved the deal.
Ellies is dead sadly, with even business rescue serving no purpose. There's no reasonable prospect of saving the company. This is what happens when a company is asleep at the wheel strategically. It doesn't often happen that a listed company goes bankrupt for reasons other than fraud, yet here we are.
At MC Mining, the independent board has had to change its tune. They are now recommending the Goldway offer to shareholders, as the unconditional nature of the offer means that anyone not accepting the offer is now at risk of being stuck in an illiquid private company. It's been quite lovely to witness the art of corporate finance in full flight.
Over at Tharisa, the company has achieved consistent PGM output. The company has also given details on chrome output and commodity pricing, as well as progress at the Karo Platinum Project.
Get the details in Ghost Bites at this link>>>

LISTEN: Magic Markets podcast

Macroeconomic Update

US inflation has both surprised and persisted on the upside for three consecutive months. Expectations for a rate cut have been shifted to November. Treasury yields have spiked to levels seen before the Fed started to talk about cuts. The dollar was further supported by a hawkish tone from last month's FOMC minutes, with members expressing concern over sticky inflation.
The rand saw a significant drop after a new poll indicated declining support for the ANC, hinting at a potential rise for the party backed by former president Jacob Zuma. Markets don't appreciate political uncertainty in any form. We also can't ignore the double-whammy of dollar strenghthening against major currencies on the same day.
Commodities were volatile, with gold and especially PGMs down on the day.
Key indicators: USD/ZAR R18.74; US 10-year 4.53%; Gold $2,342; Platinum ZAR R18,151; Brent Crude $90.59
This macroeconomic update is based on TreasuryONE's morning update.

READ: Dive into your DIY investing adventure
(by Duma Mxenge of Satrix)

International company news:
There are a few things we can learn from the journey of Kraft Heinz. CNBC reports that private equity group 3G Capital quietly got out of its shares in the company at the end of last year, around nine years after driving the merger of Kraft Foods and Heinz. Berkshire Hathaway is the largest shareholder in the company and remains a long-term holder, at least according to the Kraft Heinz statement given to CNBC.
The investment period was plagued by a shift in consumer behaviour towards fresh food. The other major problem is one that I regularly write about: private label (house brand) offerings by retailers. FMCG brands have to be really good to justify a place on the shelves and in trolleys. On top of all this, Kraft Heinz had to deal with an accounting investigation just before the pandemic.
From peaks above $96 a share in 2017, the share price currently trades all the way down at $37. Buying a well-known brand is no guarantee whatsoever of success.
Our latest show in Magic Markets Premium is a detailed recap on Disney, which drove me to sell my shares after the recent rally. Why is that? Subscribers find out by accessing our entire research library for just R99/month. It pays to know what's going on out there - literally.