Premier's profits flour

Good morning Voornaam,

Hello from London! The weather in the middle of summer is a crisp 13 degrees, so that's as expected. But what is much, much better than expected is that the outskirts of London are filled with pretty little villages and a far more "countryside" feel than I expected. For some reason, I had urban sprawl in my head. Instead, I'm getting loads of car spotting done on fun roads that always seem to be lined by trees. Two burgers, two milkshakes and a chips to share at Five Guys came in at roughly a grand, so our beloved Randelas don't go far. The good news is that Five Guys was delicious and I'm only paying for the next round. I believe that's called a contingent liability. Oh, and a Piggeries Amber Ale isn't delicious, even if the little pub was exactly as you would imagine it.
Fresh out the oven:

Ghost Bites: Premier has given us a masterclass in the power of operating leverage. Renergen is almost ready for the all-important performance test. Accelerate, Delta Property Fund and Heriot all released updates in the property sector. Get all the details in Ghost Bites>>>

There's a brand new Ghost Wrap podcast that I put together just before leaving. You need just five minutes to get up to speed on Capital Appreciation, MultiChoice, Spar and The Foschini Group, thanks to Mazars. Find it here>>>

Elizabeth Magie invented Monopoly in 1903. It just took a long time and a decade-long court case for the world to remember that. This is the story of how Parker Brothers monopolised Monopoly - and how one man took them down. Told by Dominique Olivier, you can read it here>>>

In case you missed it:

There is only one free lunch in investing, as this Ghost Stories episode with Kingsley Williams shows. We had an excellent general conversation about investing. Brought to you by Satrix, you can enjoy it here>>>

Fedgroup thinks differently about portfolio construction and how important elements like yield and inflation protection can be brought in. Michael Field joined me to discuss their approach. Find it here>>>

This year, SA is set to become the tenth-largest solar market in the world. In episode 4 of The Current brought to you by Investec, Iman Rappetti spoke with Investec's Melanie Humphries, Bernard Geldenhuys and De Wet Taljaard from the South African Photovoltaic Industry Association (SAPVIA) to explore SA’s apparent solar boom. Enjoy it here>>>

In Magic Markets, we went back to our roots and covered local topics around the rand, South African bond yields and the state of play for South African consumers. Are we facing coalition politics, or collision politics? The podcast and full transcript are available at this link>>> ​

The only free lunch in investing

Local company news:

Premier shareholders can feel very chuffed about the performance at Millbake, with a proper growth rate in EBITDA despite modest revenue growth. The group is performing well, the balance sheet looks strong and they have made an acquisition.
At Renergen, it's all about the long-awaited performance test. They are right on the cusp of following that process. Either way, I think the share price will react sharply to the outcome.
In the property sector, Accelerate Property Fund got the rights offer done and needed to find a new buyer for Cherry Lane. Delta Property Fund is selling the Lexis Nexis building. And most interestingly, Heriot is taking Thibault private. Thibault is listed on the Cape Town Stock Exchange, where there are only a handful of listings. The delisting isn't good news for the exchange.
These stories are all covered in detail in Ghost Bites at this link>>>

Steal, hustle and lie: the Monopoly story

International business news:

It looks like the Paramount - Skydance deal is dead. Shari Redstone, who controls Paramount, has reportedly ended the discussions. This is after months and months of deal negotiations with a private equity consortium, reminding me once again why working in M&A is such an emotional rollercoaster. You can work on something for an incredibly long time, only to watch it go to zero.
It happened to me many times and is part of the industry, which is why success fees tend to be high. The success fees make allowance for the probability of deals going through.
Where does this leave Paramount? Well, the "Office of the CEO" (with three executives running it) will now execute the strategic plan that was put forward. Redstone must have favoured this plan over the deal.
We covered Foot Locker in Magic Markets Premium last week and our next report is on Lululemon. To get access to this research and the rest of the vast library, subscribe to the platform here.

Macroeconomic Update

The markets are awaiting the release of US inflation data and the Fed's rate decision later today. CPI is expected to be flat at 3.4% year-on-year, while Core CPI is expected to have moderated to 0.2% month-on-month from last month's 0.3% month-on-month. The FOMC is overwhelmingly expected to keep rates unchanged, with a hawkish undertone.
The rand was boosted yesterday with news that the DA's federal council has agreed in principle to the formation of a government of national unity. The market is looking for certainty, particularly with a business-friendly flavour. Emerging market peers are weaker off the back of disappointing Chinese inflation data.
Key indicators: USD/ZAR R18.57; US 10-year 4.41%; Gold $2,312; Platinum ZAR R17,803; Brent Crude $82.27
This macroeconomic update is based on TreasuryONE's morning update.