| Yesterday saw a 2% rally in the ALSI. In the past 7 trading days, the local market has increased 6.5% - that's more than a money market fund gives you in a year!
I want to delve into the sectors for the sake of an interesting chart. For all the attention that the resources sector has received this year, plotting the Satrix RESI ETF (a passive tracker of the resources index) against the Satrix FINI ETF (the financials sector) tells a fascinating story:
The resources index is being weighed down by the gold miners. Still, this does show the importance of stock picking vs. blindly buying a theme. The outperformance of the financials index is also thanks to a particularly strong day for the banks yesterday, which must've been somewhat informed by the Nedbank update on Fri day. I must say, I was looking out for strong growth in corporate and business lending, which didn't come through in the update. This makes me think that most growth in balance sheets is being funded by internally generated cash flows rather than new debt.
Is this a hangover from the pandemic that will hamstring growth for the local banks? Are corporates feeling too nervous to maintain their debt:equity ratios, which would entail borrowing in proportion to growth in retained profits? Only time will tell.
You can easily stay up to date with JSE news by reading Ghost Bites every day. In the latest edition, I cover updates from the likes of Bidvest, Adcorp, Momentum Metropolitan, Sygnia, Novus and others. You can find the critical insights at this link.
Those following the daily currency movements will have noticed that the rand strengthened further yesterday. The team from TreasuryONE has been doing a great job of keeping us updated on what has been happening out there. For example, the dollar has been losing some of its attractiveness as investors have weighed the possibility of the Fed not increasing rates as aggressively as previously expected. For more insights and to have a discussion on how the team can help you manage market risk in your business, reach out to TreasuryONE. There's also far more to their business than just forex, as you'll discover on their website.
I want to highlight the library of Unlock the Stock videos. If you are interested in any of these companies, then the videos offer a recording of the company present ation and Q&A session. They are bookmarked to make it easier to find the section you are interested in. Here are the links:
Calgro M3 (27 May 2022)
Mpact and TWK Investments (22 April 2022)
Bell Equipment (31 March 2022)
Astral Foods and Trellidor (18 March 2022)
Afrimat and Spear REIT (24 February 2022)
Get those headphones out, as there are a couple of podcasts that you need to make time for this week.
The first is Episode 77 of Magic Markets, in which Petri Redelinghuys of Herenya Capital Advisors joined Mohammed Nalla and I to talk about survival techniques in bear markets. We also talked about the resources and financials themes in more detail, which is a great way to get more insights into the chart I shared above.
The second is my guest appearance on Honest Money, in which Warren Ingram and I discussed active vs. passive investing in detail.
Knowledge is power in this market. Give yourself a pat on the back for being here and investing in yourself.
Have a wonderful day!
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| | | Bidcorp, Adcorp, Momentum Metropolitan, Sygnia and others released earnings updates into a green day on the market. |
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| Comparing South African infrastructure spend as a percentage of GDP relative to other countries tells an interesting story. |
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| | | With risk mitigation techniques and a solid understanding of the drivers of specific sectors, bear markets can be survived. We discuss this with Petri from Herenya Capital. |
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| | | Active vs. passive investing is a common debate in finance. With Warren Ingram as the host of Honest Money, we discuss fresh perspectives on it. |
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