British American Tobacco: out of puff

Good morning Voornaam,

Happy Valentine's Day! Roses are red and so was your portfolio yesterday if you held British American Tobacco, which closed 8% lower for the day in response to the release of earnings. The appeal of this company remains a mystery for me, as I explain in Ghost Bites today.

Barloworld's shareholders won't be getting any extra chocolates from the consortium looking to take the company private. The R120/share price is final, which means Silchester now needs to decide how serious they are about their "minimum" requirement of R130/share. Those prices aren't terribly far apart and if you've ever shown a carrot to a donkey at one of those farmyard petting zoos, you'll know how shareholders tend to look at a cash premium.
Caxton, iOCO (formerly EOH - I'm going to stop reminding you of that soon) and Italtile all released trading statements, so there's plenty to read up on here. South32 came out with earnings and they reflect a mining group that is in a strong position. I used that as an excuse to show you how incremental revenue "drops to the bottom line" in a business with fixed costs.
Oh yes, and Neal Froneman is retiring from Sibanye. That's big news in the sector.
Get these details and the Nibbles in Ghost Bites this morning>>>
How much do you know about alternative assets? Westbrooke has been operating in this space for a long time, which means Dino Zuccollo is perfectly positioned to explain the level of adoption in this space among both investors and companies seeking capital. Operating across the capital stack (which means the full spectrum from debt to equity), Westbrooke has plenty of insights to share. The latest Magic Markets episode is a lovely way to learn more about this asset class. Find it here>>>
The Budget Speech is looming and that's always an important time of the year for South Africans. To help you understand what to expect and what to look out for, Investec's latest episode of No Ordinary Wednesday features Annabel Bishop, Tertia Jacobs and Chris Holdsworth in conversation with media stalwart Jeremy Maggs. You need to invest just over 20 minutes of your time to make sure you are well prepared for Finance Minister Enoch Godongwana's big day. Enjoy it here>>>
DealMakers is back with their Friday goodies for us. Aside from the usual summaries of local corporate finance and local M&A, you have a couple of specialist pieces to choose from. One is from the team at Bravura about Namibia's potential as a trust administration powerhouse, while the other is from Webber Wentzel on Statement 102 of the B-BBEE framework. Enjoy!
If you're doing anything special today (as I am), have a great time!

INVESTEC: International Opportunities Limited - a Chinese equity structured product

SATRIX: 2025 kick-off and fresh views on rent vs. buy

GHOST WRAP: Retailers on sale on the JSE - a review of the first few weeks of 2025

GHOST BITES - Making sense of SENS on the local market

DOMINIQUE OLIVIER - Spotify: mafia tactics that work!

Budget 2025 - what to expect

International Business Snippet:

Well, all the worries about Airbnb prioritising its hosts over its guests certainly weren't reflected in a 14% jump in the share price in after-hours trade. Revenue and earnings beat estimates, with a particularly strong beat on earnings. Revenue was up 12% year-on-year and net income swung from a loss into a meaty profit. There were no fewer than 111 million nights and experiences booked, a truly remarkable statistic. This rally in the share price took it close to 52-week highs.
Coinbase reported revenue and earnings that were way ahead of expectations, yet the share price only popped by 8.5%. Admittedly, it's up 86% in the past year, so that's important context for these results. Interestingly, crypto trading makes up 68.5% of the group's total revenue, so they've been working hard on annuity revenue sources.
Our latest research in Magic Markets Premium is on ASML, the company in the semiconductor industry that you've never heard of. This is because they sit further up the value chain, supplying the machines that actually manufacture the chips! They even have a monopoly in certain technologies. Our subscribers can enjoy our detailed work on this company as an alternative way to play the AI theme.

Magic Markets: Tariff Tantrum

Macroeconomic indicators

Global equity markets continue their upward momentum as investors react positively to signs of flexibility in Trump's tariff negotiations. US markets closed at session highs, while European futures hold steady following yesterday's gains.
Asian markets are broadly positive, with the Hang Seng Index leading the advance, boosted by both the global market optimism and ongoing strength in the region's AI-driven technology sector.
The US dollar has weakened alongside Treasury yields as expectations grow for monetary easing in the US economy.
The rand is in turn firmer and we are expecting a positive start for the JSE All-Share Index this morning.
Crude oil prices have edged higher after JP Morgan reported improvements in global demand conditions.
Meanwhile, gold continues to trade at record levels, supported by multiple factors including dollar weakness, sustained central bank purchases, and investors seeking protection against trade-related uncertainties.
Market participants should watch for the release of US retail sales data later today, which could influence trading sentiment.
Key Indicators: USD/ZAR R18.47/$ | US 10yr 4.53% | Gold $2,934/oz | Platinum $1,045/oz | Brent Crude $75.17
As often as practically possible, insights from the IG Markets morning macro update by Shaun Murison will be featured here. Where this isn't possible, only indicators will be provided. If you want to learn more about trading, refer back to The Trader's Handbook, a podcast series that takes you through many of the important principles in trading.