| Good morning Voornaam, The markets are wild at the moment. When world leaders aren't playing nicely in the sandpit (one of them, in particular), markets get angry. It's very easy to panic in these situations. You might be wondering what I sold yesterday, or what I bought.
The answer is: I did nothing. Absolutely nothing. Why? Because markets pay you to stick around and to be as unemotional as possible, unless you're a trader who needs to make money on volatile days. I'm not a trader, hence I was happy to enjoy the memes about Trump putting tariffs on a colony of penguins.
To help you understand the theory behind this approach, Kingsley Williams at Satrix has written on diversification and how the markets reward your patience over time. A podcast that I recorded with Kingsley is due for release on Monday morning. To whet your appetite and to help you feel better about the long-term prospects of the markets, read the article here>>>
Moving on to company news, Murray & Roberts released its business rescue plan. I cannot stress this enough: there's a very big difference between a business rescue and a shareholder rescue. The focus is on preserving the business (and jobs) in a sustainable manner, while paying back as many creditors as possible. Shareholders often get absolutely nothing out. In finance slang, we like to joke about something being a doughnut - a zero. Nada. Nil. From what I can see in the business rescue plan, that's the likely experience for shareholders. The good news is that there is a buyer for the mining business, so the majority of jobs will be saved.
In deal news, Primary Health Properties is trying to seduce the shareholders of Assura. They are teasing a part-share, part-cash deal. The problem is that it is coming in at a lower implied value than the all-cash alternative that the board of Assura likes. It's hard to see why shareholders in Assura would rather accept less value in exchange for higher deal risk, so I can't see Primary Health becoming the favoured approach here. Speaking of risk, Jubilee Metals needs to make a decision soon about the Large Waste Project in Zambia and they are working hard to de-risk the deal through various mechanisms.
At Orion Minerals, Errol Smart has decided to hand over the reins. Having led the company to the point of releasing the DFS for both major assets, it's time for a new CEO to move forward with funding and building the projects. I'll refrain from making jokes about smart succession plans.
As always, these details and the Nibbles are available in Ghost Bites at this link>>>
For those who love a deeper dive into companies, the latest Unlock the Stock featured Fortress Real Estate Investments. Life-after-REIT looks just fine there, thank you very much. Watch the recording of the management presentation and vibrant Q&A at this link>>>
CA&S (you might recall seeing their recent results here) is the next company joining us on Unlock the Stock. As always, attendance is free! Register for the event on 10th April at this link>>>
Today is Friday, which means the crew from DealMakers have brought you the usual summaries of local M&A, local corporate finance and African deal news. This week's thought leadership pieces are on shareholder activist engagement (now there's a juicy topic), as well as legal tech in M&A transactions in Africa.
By now, if you were interested in learning about VAT's relative impact on rich and poor, as well as how bracket creep hurts South Africans, you've probably already listened to my recent podcast with Tertius Troost of Forvis Mazars in South Africa. But just in case you haven't, this is your final reminder that it's a really worthwhile overview of these key issues. Find it here>>>
Have a great Friday and I'll see you on Sunday for Ghost Mail Weekender! |
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| CAUTION: potholes ahead! - Kingsley Williams, Satrix |
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| | | After a tough first quarter of the year, investors seeing their portfolios decline in value may be questioning whether their current strategy is still right, or if a change is needed.
Kingsley Williams of Satrix shares his insights into diversification and portfolio strategies, including some important evidence of why "time in the market" is something to strive for.
Enjoy it here>>> |
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| GHOST STORIES: VAT strategies, bracket creep and what it means for South Africans |
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| | | With the dust having settled on the Budget Speech and the proposals that parliament will need to vote on, Tertius Troost of Forvis Mazars in South Africa joined me to reflect on the key drivers behind the headlines.
VAT has been the focus area, but is it true that a VAT increase is anti-poor? And is it correct to rebut the “South Africa has a small taxpayer base” argument by pointing out that everyone pays VAT? What is bracket creep and how does it affect middle-class South Africans?
These questions and more are answered in this podcast>>> |
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| GHOST WRAP: Q1 winners on the JSE |
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| In considering how the first few months of the year have played out, some surprising winners have emerged. The performance in gold is simply a case of the sector carrying on where it left off in 2024, but what about platinum? And where did that telecoms rally come from? Also, have retail stocks continued their slide since the previous episode of Ghost Wrap that focused on that issue?
You can find the recording and the transcript (with charts) at this link>>> |
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| GHOST BITES - Making sense of SENS on the local market |
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| | | Murray & Roberts looks like a doughnut. Primary Health Properties is pursuing Assura. Jubilee Metals is refining a Zambian deal. Orion Minerals has a new CEO. Get the details in Ghost Bites>>> |
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| Unlock the Stock - Fortress Real Estate Investments |
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| In the 50th edition of Unlock the Stock, Fortress Real Estate Investments made its debut on the platform to talk about the recent performance and strategic focus areas for the group. The recording of the management presentation and interactive Q&A is available at this link>>> |
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| DOMINIQUE OLIVIER - Hot takes: chillies and the human desire for suffering |
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| | | Curry. Con carne. Arrabbiata. Peri-peri. In almost every corner of this world, you’ll find a dish that’s been given the signature bite of the chilli pepper. As strong as they are small, these pungent peppers have achieved the culinary equivalent of world domination, when all they really wanted to do was to get us to stop eating them. Dominique Olivier explains>>> |
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| INVESTEC PODCAST: Global economy - recession or recovery? |
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| | | Recession risks, inflation pressures, and trade tensions - how is the global economy shaping up in 2025? Investec’s Chief Economists, Phil Shaw (UK) and Annabel Bishop (SA), take stock of the latest trends in No Ordinary Wednesday. From global growth forecasts to the economic outlook for Europe and South Africa, they break down what lies ahead in this podcast>>> |
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| International Business Snippet: |
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| Thanks to Trump doing his very best to impose misery on third world countries that rely on investment by leading brands in manufacturing capabilities to create jobs, European retail stocks nosedived yesterday. When your supply chain has been built around a reasonable set of known parameters and then everything gets thrown into disarray, investors head for the exit.
I'm no expert on Making America Great Again, but I will point out that American company Nike's share price fell 14.5% yesterday and European rival Adidas was down "only" 11%. Hmmm.
Our latest research in Magic Markets Premium is on Chinese giant Alibaba. With Jack Ma back in the spotlight and the share price having rallied strongly, is there reason to believe in this story again? For our subscribers, we dig into how Alibaba is making money and whether we would jump in. |
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| Magic Markets: The art of investing in art |
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| | | Magic Markets: Tristanne Farrell isn’t shy to admit it: she’s mildly obsessed with art. As a Senior Wealth Manager at Investec Wealth & Investment International, her day job is to help clients build diversified, successful portfolios. Thankfully, with art as one of the more interesting (and certainly most visually stimulating) alternative assets out there, she gets to enjoy some overlap between her passion and her career, including hosting the Art in Focus podcast series.
She joined us to talk about art as an investment, bringing a mix of genuine passion and solid insights into this asset class. To learn more, listen to this podcast>>> |
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| Macroeconomic indicators and IG Markets macro update |
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| The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite are poised to end the week in negative territory. The Dow has dropped by 2.5%, while the Nasdaq and S&P 500 have declined by 4% and 3%, respectively, marking their worst weekly performances since September 2024.
President Trump's announcement of significant tariff hikes on imports from over 180 nations has led to a global market sell-off. Asian markets, particularly Japan and South Korea, experienced substantial declines. European markets also saw drops, with the STOXX 600 index falling by 1.6%.
The tariffs have caused widespread market volatility, with many multinational companies experiencing significant declines. Companies heavily reliant on imports, such as Apple and Nike, have been particularly affected.
There are concerns that these tariffs could push the US and global economies into recession, with some analysts estimating a 60% probability of a global recession if the tariffs are fully implemented.
The JSE All-Share Index is expected to open lower this morning once again in line with its global peers.
The dollar has been under pressure due to concerns over US tariffs and their potential impact on economic growth. This has led to a broad-based decline in the dollar's value.
The Rand has weakened since contentious budget negotiations in South Africa, which have raised concerns over economic stability and investor confidence as the state of the Government of National Unity comes under question.
Gold prices have been rising due to geopolitical tensions and economic uncertainties although are slightly weaker today after reaching new all-time highs just yesterday.
Oil prices experienced significant declines following US tariff announcements and OPEC's plans to increase production.
Goldman Sachs has lowered its oil price forecasts due to increased OPEC+ supply and the risks associated with a global trade conflict potentially leading to a recession.
Key Indicators: USD/ZAR R18.87/$ | US 10yr 3.97% | Gold $3,101/oz | Platinum $950/oz | Brent Crude $69.23
As often as practically possible, insights from the IG Markets morning macro update by Shaun Murison will be featured here. Where this isn't possible, only indicators will be provided. If you want to learn more about trading, refer back to The Trader's Handbook, a podcast series that takes you through many of the important principles in trading. |
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