| Investors appear to have taken a profit warning from Sasol in their stride, with its shares closing higher yesterday after an initial decline. The energy and chemicals group has booked large impairments due to the deteriorating outlook for its businesses and the products they produce, which resulted in big decline in the prices of oil and chemicals in the first half of its financial year. As one analyst put it: the company has 'kitchen-sinked' everything possible in its first-half numbers, which are due out on Monday. Ingham Analytics has sounded a number of cautionary warnings about Sasol and a possible rights issue. If you're a shareholder or thinking of buying shares, you might want to take a look at its latest research, which is listed down below. Meanwhile, another resources company, Exxaro, expects to report a solid first-half performance, supported by strong coal exports and the weaker rand. Higher education group Stadio says its underlying performance was also solid despite Covid-19. More on these stories to follow, along with results from wealth manager Quilter and building and construction materials group Sephaku. I hope you have a good day. Stephen Gunnion Managing Editor, InceConnect
Recent notes of topical interest from Ingham Analytics BHP edged higher on the Australian Stock Exchange yesterday, ending at AUD40.20, up 0.9%. The JSE price is up 3.6% to R420. Iron ore remains buoyant. Ingham Analytics say that there is an element of perfection pricing in BHP but they think there is more juice to squeeze for traders on the dips for two reasons Read their latest thinking in "Iron ore up, all else down". Gold fell below $2,000 per ounce whilst the US Ten-year yield climbed to 0.626%. Could this be a brief sell-off ahead of a new ascent for gold? "Bedazzled" is worth a read to make cents of it all. Sasol issued a trading statement. Ingham Analytics say that the impairments alone of R112 billion knock net asset value by 50% or R180 per share whilst the attributable loss is R90 billion. Their note last week indicated that further impairments were possible with a loss likely for the second half. In "Going, going for a song" Ingham Analytics caution that a dilutive rights issue is a distinct possibility. A price of say R100 per share would require the issue of 350 million shares to raise $2 billion or R35 billion. But given the 2020 result is that enough? | 