CMH: too many brands?

Good morning Voornaam,

Fresh out the oven:

Ghost Bites: CMH is fighting some strong headwinds in new car sales in SA - and the bankers are getting the fruits of that labour. Attacq is buying the rest of Mall of Africa. Gold Fields upset the market with a poor quarter. Read Ghost Bites>>>

Bond ETFs: Improve your understanding of bond ETFs and how they work in a portfolio. Siyabulela Nomoyi of Satrix joined me on a Ghost Stories podcast to unpack this type of investment. Listen to it here>>>

​Sanlam / Grovepoint: Private markets are fascinating, especially private credit. In this podcast featuring two highly experienced professionals (Reginald Labuschagne and Harris Gorre), we unpack the capital allocation and investment considerations. Full transcript included. Don't miss this! Find it here>>>

Unlock the Stock: The recording of the recent presentation by Astoria Investments is available at this link>>>

In case you missed it:

​​​Magic Markets: If you import or export, or move money offshore in your personal capacity, then pay attention. Future Forex joined us on Magic Markets to explain their FinTech-flavoured offering and how it makes international money transfers simpler and cheaper. Listen to it here>>>

Investec: The demographic shift in the world has major impacts on retirement planning. How can structured products help? Read it here>>>

LISTEN: Ghost Wrap
(MTN Nigeria | Datatec | Capital & Regional | Harmony Gold | Astral Foods + Quantum Foods)

Local company news:

CMH is dealing with some significant disruption to the South African new car market. Not only are consumers under a great deal of pressure, but there's a huge onslaught of Chinese brands (and to a lesser extent, Indian cars) that have made a huge dent in the shiny bonnets of European brands and their market share. With a wide footprint and many different brands in the stable, CMH isn't an easy business to run at the moment.
Despite this, they've done a great job of maintaining operating profits. Sadly, with interest costs having gone up so much, the result at HEPS level is well down on the prior year. Working through the difficulties that CMH is facing will help you understand why WeBuyCars is my chosen fighter in this sector.
Speaking of difficulties, Gold Fields released a quarterly update that the market hated. Production has been full of challenges and the outcome is a substantial jump in All-In Sustaining Costs (AISC), which means margins are under pressure. This isn't what the market needed to see at a time when gold prices are doing well. The "physical gold vs. miners" debate rages on.
Finally, Attacq has bought the remaining 20% in Mall of Africa (and it wasn't cheap). The seller is Atterbury. The surprising thing here is that RMB Holdings didn't release a SENS announcement about this, despite the sale of this stake presumably being a pretty important step towards further value unlocks for that group.
Get the details in Ghost Bites at this link>>>
The next Unlock the Stock event is CA Sales Holdings, scheduled for Thursday 9 May at midday. This company has been a superstar on the local market and I highly recommend putting this in your diaries so you can engage with the management team. Attendance is free, but you must register here>>>

LISTEN: Investing in Private Credit
(Reginald Labuschagne, Sanlam Private Wealth |
Harris Gorre, Grovepoint Investment Management)

READ AND LISTEN: The Global Accelerator

READ: Satrix MSCI ACWI - Capturing Opportunities

LISTEN: Cashing in on clean

International business news:

Reddit released its first quarterly result as a listed company and the share price rallied nearly 15% in after-hours trade. You would therefore be forgiven for thinking that there are profits to talk about. Alas, this is firmly still a loss-making group. Revenue jumped 48% year-on-year though, so the market is clearly looking ahead to what the profits might be like when Reddit moves through the inflection point that makes all the difference at platform businesses.
In other social media news, TikTok has sued the US government to try and stop enforcement of the bill passed last month that would force the app's Chinese owner to sell the app or have it banned. I do still find it incredible that the US, that bastion of capitalism, went down this road with TikTok.
Ready to understand more about risks and opportunities in global stocks? Subscribe to Magic Markets Premium for just R99/month. You'll get a subscribers-only weekly report and podcast on global stocks, covering strategy, financials and technical trading indicators.

READ: What tiny pineapples can tell us about our future
(by Dominique Olivier)

Macroeconomic Update

Despite softer payrolls and unemployment data last week, Fed officials continue to focus on inflation numbers and are warning the markets that "higher for longer" is the flavour out there for interest rates.
With renewed concern over the situation in the Middle East, gold is a touch firmer, but gains are being limited by the stronger dollar. Brent Crude is all the way down at $82.70 - quite the drop from over $90 just a few weeks ago!
Key indicators: USD/ZAR R18.54; US 10-year 4.47%; Gold $2,318; Platinum ZAR R18,071; Brent Crude $82.71
This macroeconomic update is based on TreasuryONE's morning update.