Curro needs more kids

Good morning Voornaam,

Schools are a lovely example of operating leverage. In fact, the term "airline economics" is relevant here as well. You see, the incremental cost of an extra kid in a class (much like an extra passenger on a plane) is very low. The classroom is there anyway and so is the teacher. The incremental benefit of one more sale (in the form of attracting an additional learner) is substantial. It's therefore very important that Curro fills its schools.
Alas, this is proving to be difficult. Learner numbers are down vs. last year and there are a couple of schools that look particularly vulnerable.
De Beers is far more vulnerable, of course. I'm almost bored of mentioning lab-grown diamonds here, so you hopefully understand the risks by now. At least production risks are largely off the table, with Anglo American announcing that the Botswana government has agreed to a multi-year deal. Without that, it would be impossible for De Beers to even try and find a sustainable model for mined diamonds.
In other mining news, African Rainbow Minerals is a victim of the iron ore cycle, with a large drop in earnings. Grindrod is also impacted by commodity prices, albeit indirectly, as it affects volumes at the ports. As things transpired though, it was border disruptions that caused the biggest headache for Grindrod.
Finally, the property sector saw useful updates come in from NEPI Rockcastle and Redefine.
For more on these insights and for the usual assortment of Nibbles, click here and read Ghost Bites>>>
With the end of the tax year upon us, I hope you've maximised your tax-free investment annual allowance. I also hope that you've got a plan for how to maximise it next year. To explain why this structure is so powerful and should never be wasted, Siyabulela Nomoyi of Satrix joined me on this podcast>>>
In the latest No Ordinary Wednesday podcast presented by Investec, Jeremy Maggs and Tinus Rautenbach discussed whether the tech titans in the US can continue to dominate the market this year. Find it here>>>
On the Magic Markets front, leading agricultural economist Wandile Sihlobo joined us to give an on-the-ground account (literally) of the SA commercial agri sector and the sentiment of commercial farmers amidst all the geopolitical noise with the US. Get it here>>>
Have a lovely day!
PS: Afrimat will be presenting on Unlock the Stock this Thursday. Get it in your diaries nice and early and remember to register to attend here>>>

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International Business Snippet:

Home Depot beat earnings in the fourth quarter. More importantly, the group finally turned from red to green in comparable sales, with positive growth after eight quarters of bright red numbers. Interest rates have been a real issue for the group, leading to deferred consumption of its products as homeowners hope that rates will drop. At some point though, it can be deferred no longer. Perhaps they've reached that point in the cycle.
All eyes will be on NVIDIA's results later. If there's any sign whatsoever of a slowdown in demand for chips or AI-related expenditure, you can expect to see a very ugly evening (and possibly week) in tech. Of course, they may also release blockbuster earnings, so it's going to be exciting either way!
Our latest research in Magic Markets Premium is on The Trade Desk, a company that sits right at the heart of the omni-channel advertising space. By connecting agencies with a variety of advertising opportunities for their clients, the company enjoys wonderful growth tailwinds. It also trades at an insane multiple, which makes the analysis harder than you might think. Our subscribers can enjoy our detailed work on this growth stock.

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Macroeconomic indicators

Despite the Dow finishing in positive territory, the S&P 500 and Nasdaq indices retreated, dragged down by weakness in the technology sector. Tesla was a significant underperformer after European sales data revealed a January slump.
European markets ended the day higher, with the euro gaining strength following Germany's election outcome.
Chinese and Hong Kong markets staged a notable recovery on Wednesday as technology stocks rallied amid China's renewed push into artificial intelligence. The financial sector also performed well after analysts highlighted the improving credit risk profile for banks.
On balance we are expecting a slightly firmer start for the JSE All-Share Index this morning.
US Treasury yields and the dollar both declined, reflecting growing concerns about US economic deceleration and uncertainty regarding Trump administration policies.
Oil prices fell significantly overnight as global supply concerns increased, while demand projections weakened following disappointing economic reports from the US and Germany.
Gold prices have begun retreating from record highs despite dollar weakness.
Key Indicators: USD/ZAR R18.45/$ | US 10yr 4.33% | Gold $2,910/oz | Platinum $968/oz | Brent Crude $72.60
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.