| Good morning Voornaam,
AVI, Cashbuild, Clicks and Woolworths gave us important insights into the state of South African consumers. Netflix has over 260 million subscribers - and is moving into sport. You need just five minutes to get insights on Motus, Attacq, Clicks and Woolworths in the Ghost Wrap podcast brought to you by Mazars. Dominique Olivier explains the history of the UFC>>> Magic Markets brings you the latest on Citigroup and Bank of America in this podcast>>> Interested in setting up a UK - South Africa business? Operating in that space already? Join the next bizval webinar today at midday to learn directly from guest speaker Graham Davies about what it takes to operate a business with an international team, specifically servicing the UK from South Africa. Registration is free at this link>>>
Local company news:
I had a rather popular Tweet / X-sê yesterday. It went a little something like this:
"The South African middle class:
Salary increase: 5%
Woolworths Fashion Beauty Home inflation: 11.4%
Woolworths Food inflation: 9.1%
Clicks inflation: 7.5%
Spot the problem yet?"
You would have to be blind not to see that South African taxpayers are under immense pressure. They are getting hammered from all sides. To the list above, you can easily add private school and medical aid inflation, along with fuel costs.
As The Notorious B.I.G. once told us:
"I don't know what they want from me
It's like the more money we come across
The more problems we see"
The song is called Mo Money Mo Problems. Sound like a familiar story to you?
Now of course, retailers can still make money like this. They just have to offer the right products at the right price points, ensuring that we make space for them in our budgets. We have to sacrifice certain things in order to own other things.
As you'll learn in Ghost Bites, Clicks is clearly getting it right. So is AVI on several product lines. Woolworths? I'm afraid my worries about diminishing pricing power continue, despite the company trying to convince the market that this isn't the case. Believe me: if they could raise prices at or above food inflation, they would. The reality is that they can't do that anymore. With Fashion Beauty and Home having a wobbly in this period, the group story was left exposed. This is hopefully a temporary problem for the Fashion Beauty and Home business. I believe that Woolworths Food faces more structural issues in the market as the South African middle class continues to lose spending power.
Then we get ever-suffering Cashbuild, which continues to compete in a market where people really don't have the money or the desire for major capital projects on their properties.
Rounding out the day's news, there are quarterly earnings from Karooooo as well as numbers from Bowler Metcalf. Check out the Jubilee Metals update as well.
Get everything you need to know on these stories in Ghost Bites>>>
Also be sure to add the Ghost Wrap podcast to your weekly listening regime. This week, you need only five minutes to get the most important insights on Motus, Attacq, Clicks and Woolworths. This podcast is designed for busy people just like you, with thanks to Mazars. You'll find it here>>>
International company news:
Thanks to data and automation specialists B2IT, Magic Markets brings you the highlights (and challenges) of the latest numbers released by US banking giants Citigroup and Bank of America. It's always worth understanding more about the Wall Street players. We make it easy for you in this podcast>>>
It's a big week of earnings results in the US. Today, I opted to focus on a company that everyone knows: Netflix.
The company has added over 13 million subscribers in the latest quarter, taking the tally to over 260 million. Netflix also released numbers that were ahead of consensus revenue estimates. The same can't be said for earnings per share, which narrowly missed estimates.
Thanks to stronger performance and expectations of a weakening dollar, Netflix has increased its 2024 operating margin forecast.
Perhaps more importantly, the company has said that it isn't looking to acquire traditional entertainment companies or "linear assets" - traditional TV networks. They expect consolidation in the market, but it will be mainly among those traditional companies as they try to compete with streaming.
Instead, Netflix will look to optimise its content slate and bring the best possible offering to subscribers. The big news is that Netflix is stepping into live entertainment, starting with WWE Raw. When you think of how well Netflix has done with sport documentaries, live sport has always been the next step.
MultiChoice will have more competition for sports rights in years to come, perhaps making those rights more expensive to acquire?
And with that, I leave you to have a great Wednesday. |
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| LISTEN: Magic Markets podcast |
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| In Episode 158 of Magic Markets, we covered the recent results from Citigroup and Bank of America. It's important to keep an eye on the Wall Street banks, as they tell us a great deal about the broader state of play.
Of course, they also have their own challenges to worry about!
Find out about the opportunities and risks in this podcast brought to you by international data and automation specialists B2IT. |
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| Currencies, commodities and rates: TreasuryONE Market Update The dollar is holding at firmer levels ahead of the US Q4 GDP number and Friday's Personal Consumption Expenditure (PCE). Bets on a March rate cut by the Fed have declined, pushing bond yields higher and underpinning the dollar.
Today is a busy day, with German, UK and US services and manufacturing PMI numbers. Tomorrow, the ECB interest rate decision is due. We also have local CPI numbers today ahead of tomorrow's MPC meeting. CPI is expected to have moderated to 5.2% from the previous month's 5.5% number.
The rand is at R19.04 this morning, Gold is at $2,023 and Brent Crude is at $79. The US 10-year is trading at 4.12%.
As a Ghost Mail reader, you have a wonderful early bird opportunity to register for the 2024 post-budget panel discussion hosted by TreasuryONE, Econometrix and ETM Analytics. I absolutely cannot recommend this enough and I will also be attending to learn from the panel. Get it in your diaries now already by registering at this link>>> |
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| READ: UFC - The Business of Bliksem
(by Dominique Olivier) |
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| With Dricus du Plessis' victory fresh in our minds, Dominique Olivier stepped into the octagon to figure out the history of the UFC.
It's even more interesting than you might imagine! |
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| LISTEN: What to do with those festive savings
with Siyabulela Nomoyi of Satrix |
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| | | Saving and investing over December - January isn't easy. To keep you inspired, Siya joined me to cover a wide range of ETF topics - along with some tips of how to keep those goals going over this period of endless spending! |
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| READ: Letter from the Editor - from Cape to Clarens |
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| | | A roadtrip across South Africa is always a treat. Of course, it's also a way to see what is really going on out there.
I wrote about my experience from Cape Town to Clarens (and back again!) |
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| You should expect us in your inbox Monday – Friday. If you don’t receive an email, please check your spam, or junk folder and “move us” into your primary inbox to ensure you get it each morning.
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Our content is intended to be used and must be used for informational purposes only. You must do your own analysis before executing any investments or strategic decisions, based on your own circumstances. We do not provide personalised recommendations or views as to whether an investment approach or corporate strategy is suited to the needs of a specific individual or entity. You should take independent financial advice from a suitably qualified individual who gives due regard to your personal circumstances.
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