Profits under pressure

Good Morning Voornaam,

It's a new week, which means there's a brand new episode of Ghost Wrap for you to enjoy. Covering eight companies in under eight minutes, I bring you the latest news and my opinions on AECI, Argent Industrial, Hudaco, PBT Group, Invicta, Hyprop, Advanced Health and the Naspers/Prosus stable. Ghost Wrap is made possible by the support of Mazars. Find it here>>>

For something completely different and extremely important, I recommend checking out the latest podcast with Satrix. This time, we are talking about a topic dear to many of our hearts: investing for our children. Thembeka Khumalo b>joined me to kick off National Savings Month in the right way. If you are a parent, be sure to listen to this podcast>>>

Do Your Own Research (DYOR)

You read Ghost Mail because you want to learn about the world of business and markets. This means that you're already doing your own research, even if you didn't quite realise it.

To understand some of the techniques that are used in researching stocks, you need to listen to Episode 131 of Magic Markets. We touched on a range of research topics and methodologies in a podcast that was jam-packed with insights. Enjoy it here>>>

Another great way to learn is via the Unlock the Stock platform, where you get to be an equity analyst for an hour. The last event featured Attacq and Tharisa, with the recording available here. Unlock the Stock is brought to you by A2X.

Here are a couple of other ways to enhance your investment knowledge:

Margins: heading the wrong way

These inflationary conditions have been a wonderful learning experience. To have lived in a time of such rapidly rising rates and to learn from their effect is a blessing for anyone's investment knowledge, even if you might think I'm crazy for saying that.

For example, we've been able to really separate the best from the worst in terms of pricing power. Companies that can pass pricing increases onto customers have thrived in this environment. Those that can't have faltered.

In G host Bites this morning, the two most important updates (in my opinion) are from Hudaco and PBT Group. In both cases, operating profit growth isn't keeping up with revenue growth. This means that margins are contracting, albeit for different reasons. It is very important to understand why this is happening and what the effects are for shareholders.

There are also updates from Heriot REIT, Impala Platinum and Royal Bafokeng Platinum (with a deal that is finally unconditional), MC Mining, Nampak, Nictus, Primeserv, RMB Holdings and SA Corporate Real Estate.

Click here to read Ghost Bites and the updates on all these companies (and more!)

Yes, we went back above R19.00 - briefly

TreasuryONE kicks us off this morning with inflation data, starting with the Eurozone. Inflation fell from 6.1% in May to 5.5% in June, below expectations of 5.6%. In the US, Core PCE matched market expectations, but the dollar still traded softer post the release.

The rand snuck above R19.00 to the dollar but this was short-lived, concluding the week in the mid-R18.80s. This still puts the rand in a stronger position against the dollar than where we started in June, despite the rand's depreciation of roughly 80 cents against the dollar over the past two weeks.

Th is week, the market will be watching manufacturing data in the US, along with publication of the minutes of the June FOMC meeting. Finally, non-farm payroll data is due at the end of the week.

With that, I wish you a productive start to the week!

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