Goldman sacked

Good Morning Voornaam,

SENS is still very quiet, though there were a couple of updates yesterday that are worth touching on...

Markus Jooste, wherever he may currently be, will not be allowed to be a director or officer of a listed company for a period of 20 years after the JSE decided to censure him and impose penalties for "numerous accounting irregularities" and various associated breaches of the JSE Listings Requirements.

He has also been fined R15 million, which is probably the amount of money that falls out his pocket when walking downstairs.

In case it's not obvious, I think I speak on behalf of everyone when I say that hopefully far greater punishment will be coming his way at some point.

In other news, York Timber received "overwhelming support" for its capital raise and has put R250 million in the bank from shareh olders. A2 Investment didn't need to subscribe for any additional shares under the underwriting agreement.

Goldman sacked

After loads of investment banking jobs were created during the pandemic in response to the huge levels of IPO activity as companies rushed to tap an obviously hot market, things have cooled down considerably. In fact, IPOs have all but disappeared in these difficult markets.

This is how cycles work.

Sadly, this leads to substantial layoffs, as US companies aren't shy to hire and fire with reckless abandon. Goldman Sachs is reported to be letting go of 3,200 employees, which represents around 6.5% of its workforce.

The read-through into a data provider business likes FactSet isn't great at all, with this company providing the system that many investment bankers use. More bums on seats means more licences sold to end-users. The opposite is also true.

The timing of this news is opportune, as we are covering FactSet in Magic Markets Premium this week.

Moving on to crypto land, there are further major staff reductions at Coinbase. The company looks set to cut a fifth of its workforce, a major further move after letting go of around 18% of staff in mid-2022. A lot of people were angry with me when this company listed, which is when I put forward a view that it would be a terrible investment. The share price is down nearly 90% since then.

Is ChatGPT worth $29 billion?

If reports are to be believed, then Microsoft thinks so.

My favourite tech company wants to invest $10 billion in OpenAI, the startup that owns ChatGPT. Based on the stake that Microsoft would take, this would value OpenAI at $29 billion!

Microsoft is the proud(?) owner of Bing, a search engine that I'm convinced people only open by mistake when they use Edge instead of Chrome. Google is the gold standard in search, so Microsoft's strategy with ChatGPT is clearly to take the fight to Google.

Satya Nadella is widely regarded as a strategic genius, so I'm a very happy Microsoft shareholder and I'm not upset to see them having a go at Google.

The dollar is at seven-month lows

Fed Chair Jerome Powell's speech did not touch on any policy changes, and he didn't comment on the economy's current status either. The dollar is on the back foot, with the EUR/USD comfortably above 1.07 and the greenback trading at seven-month lows.

The rand opened stronger yesterday morning but lost ground during the day in line with other emerging markets.

All eyes remain on the US inflation print on Thursday, with political issues in South Africa still lingering over the rand.

To take stock of 2022 and look ahead to 2023, the excellent team from TreasuryONE will be hosting a webinar next week Wednesday at 9am. Space is filling up quickly. Attendance is free, so don't miss the opportuni ty to register at this link>>>

Here's some other stuff to keep you busy:

Have a great day in the markets!