| Good morning Voornaam, Hello from Cape Town, where I am safely home. The first order of business was of course to find an excellent steak and spend the same on it that I was paying for a pretty basic burger and chips overseas. We live a very charmed life in South Africa in terms of what entertainment costs. More than ever before, I plan to take advantage of that!
There are a couple of events this week that you can register for. The first is a bizval webinar on Wednesday at 12pm, with yours truly in a panel discussion on preparing a business for exit (sale). The second is Unlock the Stock on Thursday at 12pm, featuring the management teams of Spear REIT and Adcorp.
Fresh out the oven: Ghost Bites: Coronation achieved a major win against SARS. Motus gave an important strategic update. Insimbi is selling two businesses. Spear is selling a property. At Remgro, recently-acquired Mediclinic is going sideways. At Vunani, they must be wishing they could go sideways. Get the details in Ghost Bites>>>
Magic Markets: With my travels abroad in the past week and the incredible improvement in sentiment back home, this was the perfect opportunity to focus on the dangers of home country bias in the latest episode of Magic Markets. For offshore vs. SA financial insights (including life on the ground), find it here>>>
Dominique Olivier: Sometimes, businesses are here for a good time rather than a long time. For insights into trends that end and what that means for businesses (EskomSePush, anyone?) you can read this article>>> |
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| In case you missed it: Ghost Stories with Kingsley Williams of Satrix: There is only one free lunch in investing. Aside from the benefits of diversification, we discussed many other elements of investing. You can enjoy it here>>>
Ghost Stories with Michael Field of Fedgroup: There are different ways to think about portfolio construction and how important elements like yield and inflation protection can be brought in. Learn more here>>>
Unlock the Stock: Calgro M3 has been quite the story recently. To unpack the performance and prospects, the management team recently joined us on Unlock the Stock. You can watch it here.
The Current brought to you by Investec: This year, SA is set to become the tenth-largest solar market in the world. In episode 4, Iman Rappetti spoke with Investec's Melanie Humphries, Bernard Geldenhuys and De Wet Taljaard from SAPVIA to explore SA’s apparent solar boom. Enjoy it here>>> |
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| Learn all about Calgro M3 |
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| Calgro M3 is an excellent example of one of the smaller companies on the JSE that has delivered very strong recent share price returns.
To understand why, watch the recording of Unlock the Stock with the Calgro management team, available here. |
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Local company news:
Coronation is on the right side of the Constitutional Court judgement for the tax dispute with SARS. This is a big deal not just for Coronation shareholders, but also corporate South Africa as a whole.
Motus has delivered an important strategic update at its capital markets day. The group is focused on building out the annuitised elements of the business, particularly as the core model of selling cars is cyclical.
At Remgro, Mediclinic has only managed flat adjusted earnings despite an increase in revenue. I am still not a fan of the hospital sector.
Insimbi is selling two underperforming businesses and is doing so with a rather innovative approach that is basically the reversal of an asset-for-share deal.
Spear is recycling capital by selling a property to City of Cape Town.
Vunani has suffered a sharp decline in profits, with the insurance and fund management businesses moving firmly in the wrong direction.
All these stories, plus the Little Bites, are available in Ghost Bites at this link>>>
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| Trends that end: businesses with short shelf lives |
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| What happens when a business finds itself offering a solution that no longer seems to have a problem? Can it adapt, or will it die?
With the sudden disappearance of loadshedding, Dominique Olivier dug into this concept. Read it here>>> |
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| The only free lunch in investing |
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| With volatility as the theme in markets in a year of elections, it’s important to keep your head as an equity investor. Take a long-term view and let the market do its job. Easier said than done, of course.
Kingsley Williams joined me to share practical tips and important insights into investing. The podcast and full transcript are available here. |
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International business news:
The Shein IPO has proven to be anything but simple. Understandably, US regulators are nervous. Relations with China aren't great at the moment and Shein comes with quite the reputation around labour and supply chain practices. There are reports of Shein potentially shifting its IPO plans to London, an exchange that is starved for new listings.
Speaking of fashion, CNBC has reported that Forever 21 is looking for rent concessions from landlords. The company has filed for bankruptcy protection once before and seems to be in some trouble once again. Fast fashion is an extremely difficult place to play unless you have a significant cost advantage, which is exactly why Shein is so frightening for many of the established names in developed markets.
We covered Stellantis in Magic Markets Premium this week. To get access to this research and the rest of the vast library, subscribe to the platform here. |
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| Macroeconomic Update The dollar has been boosted by strong manufacturing and services PMI on Friday. The markets are looking ahead to Friday's PCE price index release, with hopes for signs of moderation in US inflation.
With negotiations still underway on the GNU in South Africa, the rand is still hovering around the R18.00 mark. Some consolidation in the rand can be expected given the recent strong run that saw the rand outperform all other currencies.
Key indicators: USD/ZAR R18.02; US 10-year 4.25%; Gold $2,325; Platinum ZAR R17,800; Brent Crude $85.18
This macroeconomic update is based on TreasuryONE's morning update. |
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