Value shedding at TCP

Good Morning Voornaam,

If you missed the bizval webinar earlier this week on valuation principles and the use of financial data for benchmarking SMEs and valuing them, then the recording is now available at this link>>>

Before I move on from bizval, you should also check out the library of podcasts that I've done with interesting local entrepreneurs. Examples include Vangelis Kyriazis (co-founder and CEO of Syft Analytics) and Murray Clark (the visionary young entrepreneur behind the Neighbourgood brand).

Murder on the dancefloor

So-called "SA Inc." is burning brightly. Well, perhaps not brightly. Having once again gone to sleep in the dark and woken up in the dark, "bright" is a sore point right now. You will not read a single announcement by a JSE-listed company that doesn't feature a detailed discussion on load shedding.

It's bad enough for clothing retailers like The Foschini Group (TFG) who have had to invest heavily in backup power, all while suffering lower-than-expected turnover from the general mood of South Africans and the logistical difficulties of getting around during load shedding. It's especially bad for grocery retailers who need to keep fridges cold for half the day without electricity.

But a t the moment, nobody is taking more pain than Transaction Capital. Another 35% hammering was the order of the day yesterday in response to the release of detailed results. I'm not entirely sure why to be honest, as I thought the management team had done a decent job of telegraphing the horror story ahead of time. That didn't stop the market from leaving the company more battered and dented than one of those old taxis that used to be driven with a wrench back in the day.

The SA Taxi division is being rebranded to Mobalyz. It will take a lot more than a new name to fix this mess, with consumer pressure unlikely to improve matters in the taxi industry anytime soon.

In addition to updates from TFG and Transaction Capital, Ghost Bites this morning has news on Harmony Gold, Lesaka Technologies, Southern Sun and Universal Partners. Spoiler alert: among other things, the last company in that list is reinventing the toilet. This is a nice change from Transaction Capital, which is in the toilet rather than reinventing it. Read Ghost Bites here>>>

And remember, if you're struggling to stay on top of things on the JSE, the weekly Ghost Wrap podcast is a fast-paced update on the most important news of the week. Brought to you by Mazars, the latest episode gets you up to speed on AB InBev, Famous Brands, Calgro M3, CMH, Astral Foods, Pick n Pay and Santova. You can enjoy it here>>>

Local vs. offshore: the timeless debate

Based on the mild desperation in the eyes of practically everyone I meet at the moment, the local vs. offshore debate has never been more relevant. The rand is taking more strain than a pants button after a big Christmas lunch. Equity valuations are under pressure locally, whereas the US market has delivered some monster numbers this year, particularly in the technology sector.

As always, lifting your head and getting out of the noise is a sensible thing to do. The data is useful here, as it a commitment to being diversified rather than chasing the hot money everywhere. For an unbiased, fully objective view on local vs. offshore exposure, I spoke with Nico Katzke of Satrix on a recent Ghost Stories podcast that you'll find here>>>

I have no shortage of offshore exposure myself. I think it would be utterly crazy not to own the world's best companies. Of course, it's not easy to pick stocks at the best of times and especially not in faraway lands where you may not be familiar with them. In Magic Markets Premium, we do hours and hours of work every week that will save you a lot of time in your research process. Each week, we release a detailed research report and podcast on a different global stock, covering everything from bull and bear case through to technical trading indicators and a view on valuation multiples. At just R99/month with no minimum monthly commitment, I would challenge you to find a better way to teach your money about markets with electricity. Give it a try here>>>

Before we move on from Magic Markets, the latest free show (which is very different to Magic Markets Premium in format and approach, in case you wondered) deals with growth vs. value investing and how a company can be appealing to both styles if you look over a long enough timeframe. You'll find it here>>>

Sorry - we have to cover the rand

I know. It's a lot to deal with. But we have to do it.

Unless you were under a rock yesterday (although I would understand doing that by choice), the rand hit R18.90 during the day. It really doesn't help when the news includes gems like SASRIA not wanting to cover riots in a case of grid collapse, or Eskom noting that Koeberg station maintenance will take longer than expected. As TreasuryONE notes, the rand is heavily disconnected from peers at the moment.

This is especially frustrating when the US inflation print was slower in April than in March, which put the dollar under pressure. While other currencies enjoyed some reprieve against the dollar, we continued to slide.

Good luck out there today. I think we need it.

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