Debt first, divi later

Good Morning Voornaam,

For those of you who love digging into specific local stocks, I have two excellent ways for you to upskill yourself this morning:

And of course, no portfolio is complete without the inclusion of ETFs for broad market exposure. In this piece, Satrix digs into the 30-year history of the ETF as a financial innovation tool that genuinely changed the game for investors.

Podcasts to get you through the day

There's a bit of everything for you this morning. Get those earphones out and enjoy a selection of podcasts:

The market is impatient with Zeda

The price action in mobility group Zeda was interesting to watch yesterday. Having been unbundled from Barloworld at the end of December, the share price has been a significant disappointment thus far. An unbundling regularly sees some forced selling, as there are shareholders who have been given an asset they never wanted. But even then, it really has been one-way traffic and Zeda is now trading on a very modest annualised multiple.

What could be the reason?

The year-on-year numbers probably aren't to blame, as the core business is doing well against what was admittedly a Covid-infested base period. The likely issues relate to the balance sheet and lack of dividend, with substantial net finance costs that have eaten up operating profit growth. Conc erns about margin pressure in the used car market aren't helping either.

A company emerging from such difficulties is Adcorp, with the value unlock strategy starting to pay dividends. Literally.Large ones.

For these updates and news from Brikor, Exemplar, Redefine, Steinhoff (an ongoing soap opera) and Transcend Residential Property Fund, be sure to read your Ghost Bites this morning>>>

A quiet day in currency markets

With the US and UK markets out of action yesterday, the market traded sideways in line w ith expectations. TreasuryONE notes that the rand held firm in a tight range between R19.60 and R19.70. The dollar is being supported by the US debt ceiling debacle almost reaching a conclusion and all eyes are the non-farm payroll number due on Friday.

I highly recommend subscribing to the TreasuryONE YouTube channel for regular updates on the rand and the markets.

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