After all the excitement around the Pick n Pay capital raise and the Ackerman family taking a step back from the group to let independent management give it their best shot, we've now reached the most important stage: the actual turnaround. It's not going to be easy, that's for sure. Shoprite will make sure of that, along with Woolworths and Spar in their respective markets.
People tend to underestimate just how tough a retail turnaround is. Load shedding may be gone, but Pick n Pay was forced to reinvest those savings in promotions in order to be competitive. Shoprite is so strong that they will keep putting the squeeze on. There's a python and an impala in this situation and Pick n Pay sure ain't the python.
There's a lot of other important stuff in Ghost Bites this morning. BHP shows us what a cycle looks like. Master Drilling reminds us of the risks in a capex-heavy business. Stor-Age still looks solid but trades at a demanding valuation. Redefine has given deep insights into the portfolio at a capital markets day. Brimstone and Sea Harvest both released numbers. WBHO gave us an earnings guide as well. Sasfin has managed to meet the maximum acceptances condition for the take-private offer.
And that's before we consider the Little Bites, of which there were many! There's only one place to get all of this in one click: Ghost Bites. Find it here>>>
The next episode of The Trader's Handbook releases today. If you want to start from Episode 1, then you can find the episodes and detailed transcripts here. Also be sure to check out the IG Markets South Africa academy, which is just full of great pieces on trading and quizzes to test your understanding. For example, you can learn about position trading here>>>
There's a lot of other new content coming this week as well. Make sure you're up to date, including on Magic Markets. The most recent episode featured Craig Antonie of AnBro and a great discussion on portfolio management concepts and how to build a portfolio to an investment objective or theme. Get ready to learn and enjoy it here>>>
Happy Wednesday! |
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FEATURED: The Trader's Handbook Ep 4 |
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| | IG Markets Episode 4: The markets are as varied as they are beautiful, so it's no surprise that there are various different trading strategies available. Get an overview of the approaches taken by traders in the latest episode at this link>>> |
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FEATURED: Portfolio Construction with AnBro |
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Magic Markets: Picking stocks is great, but what about the portfolio that they belong in? How do you get the position sizing right, or create a coherent strategy? We explore this topic in the latest Magic Markets podcast and transcript. Find it here>>> |
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FEATURED: Unlocking the true value of TFSAs for South Africans |
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| | Satrix: In an article that I could not agree with more, Duma Mxenge talks about the importance of tax-free savings accounts and why they could be rebranded to make it clearer that this should be the cornerstone of an investment journey. Get his views in this excellent article>>> |
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FEATURED: Viral Words for Viral Brands |
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Dominique Olivier: Social media means that anyone can be a creator. Brands are having to adapt to this by following viral trends, not just trying to create them. For two recent examples, you'll learn a lot about social media marketing from this article>>> |
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Ghost Bites: The latest on BHP, Brimstone, Master Drilling, Pick n Pay, Redefine, Sasfin, Sea Harvest, Stor-Age and WBHO, along with various Little Bites in Ghost Bites here>>> |
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| | Ghost Wrap: With thanks to Forvis Mazars, this podcast brings you the latest on Absa vs. Standard Bank, MTN and NEPI Rockcastle, all in just a few minutes in the Ghost Wrap podcast. |
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Unlock the Stock: In the latest session, Tharisa Plc returned to the platform for an update on the company performance and strategy going forward in PGMs and chrome. You can watch the recording here>>> |
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- Investec Podcast: As part of the Investec No Ordinary Wednesday series, you can enjoy Jeremy Maggs in conversation with Tinus Rautenbach, head of Investec's online platform Clarity, as they discuss the rise of self-directed investing. Find it here>>>
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- Nico Katzke of Satrix: The GNU has driven significant optimism around the South African market. To help us understand where this is playing out and how the carry trade protects the rand, Nico Katzke joined me on Ghost Stories. Find it here>>>
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- Magic Markets: What is the right way to prepare for a major sell-down in the market, or even a crash? It's all about research and watchlists, as well as having money that is ready to go into those dips. We discuss these concepts in this podcast>>>
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International Business Snippet: |
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Sport is big business everywhere and especially in the US. The NFL is now allowing private equity firms to own up to 10% in a team, with big names like Blackstone and Carlyle Group lining up. Aside from the financial returns, it's not hard to see how this will be used to entertain, impress and therefore secure new partners for these firms. Being taken to the big game to iron out a few terms is an old strategy.
Although inflation has showed down and even moved into deflationary territory in certain retail categories, there's no such trend in US home prices. In June, the S&P CoreLogic Case-Shiller US National Home Price Index measured record prices, up 5.4% year-on-year. When rates do start dropping, it's logical that prices should get another bump. In markets where rates are structurally low and prices go up like that, property makes a world of sense as an investment.
Finally, Eli Lilly has released a new form of its weight loss drug Zepbound for half the usual price. Novo Nordisk will presumably take a knock here as some consumers move off the expensive Ozempic treatment to give this a try.
If you want to see the US inflation story playing out, our recent research on retail trio Costco, Walmart and Target will be really useful. Best of all, you can get those reports plus so much more for just R99/month, a wonderful investment to make in yourself. |
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IG Morning Call: daily macroeconomic update |
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We have seen marginal moves in US and European equity markets yesterday, and from index futures this morning, although major benchmarks do continue to hover around short term highs. The Shanghai Composite and Hang Seng indices are trading lower amidst weaker than expected company results out of China.
The JSE All-Share Index is expected to open flat in line with its US and European peers this morning.
The dollar is marginally firmer and the rand is slightly weaker in early trade.
Oil prices are tracking lower, ending their recent rebound from oversold territory.
Gold is slightly lower on the back of a marginally firmer dollar.
There is no high impact data scheduled for today, although traders will want to look out for US PCE inflation data out on Friday as the major economic event of the week.
Key Indicators: USD/ZAR R17.77/$ | US 10yr 3.82% | Gold $2,508/oz | Platinum $951/oz | Brent Crude $78.61
The macroeconomic update is based on IG's morning call update |
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