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Tuesday 16 November 2021

Good morning Voornaam,

It was a very busy day on SENS yesterday and there isn't space to cover everything in InceConnect. I decided to focus on the most interesting stories.

Grindrod has entered into an agreement to form a joint venture (JV) with Maersk in South Africa. The venture won't include cold supply chain but will encompass depot and warehousing, inland transportation, container feeder shipping and terminal access for containerised cargoes through the Durban Maydon Wharf facility.

Maersk will contribute its APM Terminals Business at a value of R360 million and Grindrod will contribute businesses worth R756 million. Maersk will hold 51% of the JV, with the value gap addressed with a cash payment to Grindrod. Grindrod expects to make a profit of R299 million on the transaction. The share price ended the day nearly 4% up.

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Vodacom reported interim results for the six months to September 2021. Revenue increased 4.2% and HEPS dropped 5.1%. The interim dividend increased 1.2%. EBITDA margin dropped 30 basis points to 40.3%. If MTN is the wild child in the family, Vodacom is the ultra-conservative uncle. The share price closed 1.13% lower on the day.

Spear REIT has announced the disposal of the DoubleTree by Hilton Hotel in Cape Town. Spear will reduce its loan-to-value by 172 basis points in the process. This disposal is in line with the strategy to exit hospitality assets and eliminate exposure to variable income producing properties. The price is based on the net asset value of the hotel operation, which is R45.7 million.

There will be adjustments based on debt at the time the deal closes, which is expected to be 1 February 2022. Spear has underwritten the risk of operating losses in the first year of the hotel's operations , capped at R13.5 million.

Astral Foods released results for the year ended September 2021. The poultry business recorded revenue growth of 14% and an operating profit decline of 12%, which tells you everything you need to know about the joys of chicken farming. HEPS fell 15% but the group managed to declare a final dividend of 400 cents per share, taking the total dividends this year to 700 cents per share.

Quilter Plc expects the sale of Quilter International to be completed by 30 November 2021. Quilter will receive around GBP480 billion in gross proceeds; a base sale price of GBP460 million and a further GBP20 million of interest since 1 January 2021.

After more than 25% of votes were cast against Northam Platinum's group remuneration policy, the company is now required to engage with dissenting shareholders. In my view, other issues like enormous corporate finance fees and a massive p remium for the stake in Royal Bafokeng Platinum are where shareholders should be asking tough questions.

Today's feature articles are on the Heineken - Distell deal, for which we finally have pricing, as well as Shoprite's exceptionally strong quarterly update. Also look out for an article from Jaltech on cryptocurrency "utility tokens" (like Ether) and from Currency Assist on forex.

Finally, in case you missed it yesterday, Ep 51 of Magic Markets saw us welcome Natale Labia to the show to talk about how foreign investors are thinking about South African bonds, equities and sectors of interest.

Have a good day!

The Finance Ghost

Local and Offshore Market News

Distell goes Dutch After much market speculation, Distell has finally confirmed the pricing and terms of Heineken's offer. It's left some punters in need of a stiff drink. Read More

Shoprite Holdings is flying With core Supermarkets RSA growth of 11.6% and a record quarter for Sixty60, Shoprite Holdings is dominating the market. Read More

InceConnect has partnered with Currency Assist to bring our readers a highly reputable international money transfer solution. We are leveraging this partnership to provide our readers with further value in the way of a high-level summary of the happenings in the market from... Read More

The investment case for cryptocurrencies A common misconception is that all cryptocurrencies are attempting to displace fiat currency. Read More

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