View in web browser

Good morning Voornaam,

The Foschini Group released a pretty average looking sales update (aside from local online sales), yet the market celebrated.
Tesla's margins have halved and growth is slowing down.
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>>>

Local company news:

It's been a busy week of retail updates. If you've been reading Ghost Bites, you'll already know how things have been going at the likes of Clicks and Woolworths.

The Foschini Group has now added its name to the list, releasing a third quarter trading update. The market initially loved it (or someone got properly short squeezed), before the rally washed away over the course of the day to close 3.3% higher.

Group turnover wasn't an exciting story at all, other than online turnover growth in TFG Africa. Consolidating the brands under online platform Bash is clearly working. As for the rest, growth was either slow (rest of TFG Africa) or non-existent in constant currency (negative in TFG London and TFG Australia). The weak rand saved the reported result of the offshore segments.

Did the market spot something else? Were the vague comments about gross margin enough to drive the rally?

Along with these thoughts and all the important numbers on The Foschini Group, Ghost Bites includes the latest from UK asset and wealth management group Quilter. The firm is listed on the JSE, so this is a perfect example of a rand hedge. It's also a great example of the power of distribution in that game.

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>>>

Love him or hate him, there's no doubt that Elon Musk has built an impressive business at Tesla. The Model Y achieved over 1.2 million deliveries in 2023, making it the best-selling vehicle on the planet. Well, on earth at least. Many still question which planet Elon and some of his people are from.

Volumes are great, but revenue is what pays the bills. Fourth quarter automotive revenue was up just 1% year-on-year, so the impact of price cuts is clear to see. Gross margin fell by a whopping 612 basis points to 17.6%. That's a very big negative move from 23.8% a year ago. Operating margin nearly halved: down from 16% to 8.2%.

Deliveries up 20% and revenue up just 1% isn't a happy combination. The impact of competition is real and EVs needed to become more price competitive. To add to the market's worries, the outlook for 2024 is that vehicle volume growth may be "notably lower" than in 2023. Unless they can ramp up pricing, this suggests a potentially poor year ahead for earnings as Tesla works on launching the next generation vehicle.

One thing's for sure: Tesla is never boring.

Have a lovely day!

LISTEN: Magic Markets podcast

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.

Listen to Magic Markets Episode 158 here (26 minutes long)

Currencies, commodities and rates: TreasuryONE Market Update

The dollar lost ground as markets took a skeptical view on US data to be released for the rest of the week. Risk-off sentiment is the norm ahead of such events, with the added potential explanation here of the market trimming long dollar positions after the recent strength.

Locally, headline inflation was 5.1% year-on-year for December, slightly better than markets anticipated. Lower fuel prices helped and food and beverage inflation decelerated for the first time in many months. The MPC meeting later today will offer an all-important inflation outlook for 2024.

The rand is at R18.91 this morning. Gold is trading at $2,015. We are going to start referencing the rand platinum price as well, as PGMs are so important to the local market. It trades at R17,023 this morning.

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>>>

READ: UFC - The Business of Bliksem
(by Dominique Olivier)

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!

Learn about the commercial history of the UFC in this article

LISTEN: What to do with those festive savings with Siyabulela Nomoyi of Satrix

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!

Listen to the Ghost Stories podcast here (38 minutes long)

READ: Letter from the Editor - from Cape to Clarens

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!)

Read about my roadtrip and observations in this article

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.

Disclaimer

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.

Whilst every care is taken, we accept no responsibility or liability for any errors or omissions in any of our content.

The views, thoughts and opinions expressed in our content belong solely to the author or quoted individuals and/or entities, and not necessarily to the author's employer, organisation, committee or other group or individual, or any of our affiliates or brand partners.