Money for jam

Good Morning Voornaam,

Do you have a globally diversified portfolio? The Ghost Stories podcast with Nico Katzke of Satrix is a great discussion on why that is important and how a measured approach is probably best. Listen to it here for some important perspective.

Assuming you want to do a bit of stock picking internationally, Magic Markets is a platform that you need to spend time on. Our weekly free show covers a variety of market concepts and the Premium version is a weekly research report and podcast on a different global stock each week. To give you an idea of the variety, recent Premium shows have included LVMH, Lovesac (which you've likely never heard of but is a great company), Prologis, FedEx and Ulta Beauty (a bit like Clicks in the US but with important differences).

You get access to the entire library plus a new show each week for R99/month. Best of all? We cover global stocks but we price in rand, so your subscription fee doesn't change depending on naval activity in Simon's Town. To top it off, there's no minimum monthly commitment. Subscribe here and learn how to do research on global stocks>>>

And speaking of the free Magic Markets show, the latest epis ode is fresh out the oven. Alexander Weiss of Trive South Africa joined us for the first "Five with Trive" concept show, where we discuss five stocks under a specific theme. Alexander chose Artificial Intelligence (AI) as the theme this week, so there was discussion on Nvidia, AMD, Microsoft, Alphabet and Meta. Enjoy the show here>>>

Money for jam

While SA Inc. has been treated like the strawberries that eventually end up as jam this week, RFG Holdings managed to stand out as one of the very few good news stories. At exactly the right time, the company remin ded the market that a weak rand isn't the worst thing for a food exporter, with the international business doing well. It's nowhere near that simple of course, as performance also depends on many other variables like international selling prices.

The local side of the RFG business is also doing well, with inflationary increases more than making up for volume pressure as South African consumers continue to struggle. RFG closed over 14% higher yesterday, which shows how desperate the market is for good news.

Another fascinating story was Sappi, which closed higher despite releasing horrible numbers. Cyclical businesses are crazy things and the market tends to know about the pain before the results come out, as there are observable international prices for the underlying products and institutions in particular have access to research reports on that data. The rally yesterday was almost certainly due to Sappi's positio n as a rand hedge, as I'm quite sure it had nothing to do with the large drop in EBITDA year-on-year.

We certainly can't forget MTN, a darling of the last couple of years that has come right back down to earth in an environment plagued by load shedding in South Africa and significant cash upstreaming issues in Africa due to lack of availability of foreign currency.

For more details on these important stories as well as news of a mandatory offer at enX, results at Octodec and a valuation update at Trematon, be sure to read Ghost Bites this morning>>>

And remember, if you struggle to get to Ghost Bites every morning, the weekly Ghost Wrap podcast is like a highlights package that needs 8 - 10 minutes of your time to get through. There's a new episode every Monday, brought to you by Mazars. The most recent example covered AB InBev, Famous Brands, Calgro M3, CMH, Astral Foods, Pick n Pay and Santova. Find it here>>>

The DealMakers Q1 league tables are out

For the local corporate finance industry, DealMakers is like a fantasy league. Advisory houses get to see where they've ranked vs. competitors and the fantasy is a juicy bonus at the end of the year if a strong ranking is achieved by the biggest teams in the market. Sometimes th at bonus really is just a fantasy if it's a tough year.

This could be one of those years, with the value of local M&A activity down by a whopping 61% year-on-year. The tables and associated analysis makes for fascinating reading and I recommend checking it out here>>>

You can also enjoy the weekly summaries of local M&A activity and corporate finance activity, or African M&A activi ty. For a much more technical read, there's also a piece on tax considerations when selling business assets rather than shares.

Last and unfortunately least: the rand

I wouldn't blame you for ignoring the news yesterday and letting the negativity miss you entirely. It was rough. The rand traded at levels worse than R19.30, completely blown out of the recent range (R18.00 - R18.50) that TreasuryONE has been highlighting. The culprit? Accusations by the US Ambassador to South Africa that we uploaded ammunition to that Russian ship that strangely spent time in the Simon's Town naval base back in December.

Have we been arming Russia? Considering our milita ry's last great achievement was using a water cannon on joggers during the pandemic, does that say more about us or Russia?

It hardly matters, as the market has spoken. The rand has been crushed and if sanctions do come through for South Africa, we could face a genuine currency crisis as the US is a huge export partner. If you need to discuss forex strategies for your business or for yourself, I highly recommend contacting the team at TreasuryONE.

It's incredible to think that we now have a headline that is more concerning than the electricity being off for half a day. That's one thing about South Africa: we always punch above our weight. Even where we shouldn't.

Try and have a good day today!

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