| Good morning Voornaam, Hello from Dubai, where I've already seen a camel. I joked with my little boy before I left about seeing camels. Well, it turns out that they are actually out there, just chilling (or trying to) next to the road on the outskirts of Dubai! I'm confident that it wasn't a mirage, although watching Dune on the plane at least gave me some tips on how to survive 40+ temperatures. It's quite a climate shock from the forests of North London, where I visited the village my dad was born in (Wheathampstead) as part of my last day in the UK. This is my second trip to Dubai, having first visited here roughly 10 years ago. The big difference is that there are trees and birds now, which I'm convinced weren't here previously. I have close family here and I'm staying in the complex where the Emirates pilots live (or at least some of them). This will cap off what has been an excellent and unbelievably insightful trip! Rework your budget and save up for as many international trips as possible. There's nothing better, honestly.
Before we dive into the rest of the market news, pay attention if you are a business owner. In a webinar next Wednesday at 12pm, the bizval team (including yours truly) will be presenting alongside Doug Pudney, a highly experience UK-based professional, on how to prepare a business for exit. Don't miss this! You can register for free here>>
Fresh out the oven: Ghost Bites: Libstar is demonstrating the value of pricing power. Property updates came in from Fortress, Safari Investments and Schroder European Real Estate. We saw financial updates in various forms from Gemfields, STADIO and Zeder. Brait is approaching bondholders for an extension. Last but certainly not least, the TRP has ruled on the Ascendis matter. Get the details in Ghost Bites>>>
Magic Markets: With my travels abroad in the past week and the incredible improvement in sentiment back home, this was the perfect opportunity to focus on the dangers of home country bias in the latest episode of Magic Markets. For offshore vs. SA financial insights (including life on the ground), find it here>>>
Unlock the Stock: Calgro M3 has been quite the story recently. To unpack the performance and prospects, the management team recently joined us on Unlock the Stock. You can watch it here. Next up on Unlock the Stock will be a double-header of Spear REIT and Adcorp on 27 June. You can register for free here.
Dominique Olivier: With my passion for racing clearly contagious, Dominique Olivier decided to dig into the history of Le Mans and how the technology on the racetrack ends up in the cars we drive every day. Read it here>>> |
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| In case you missed it: Ghost Stories with Kingsley Williams of Satrix: There is only one free lunch in investing. Aside from the benefits of diversification, we discussed many other elements of investing. You can enjoy it here>>>
Ghost Stories with Michael Field of Fedgroup: There are different ways to think about portfolio construction and how important elements like yield and inflation protection can be brought in. Learn more here>>>
Ghost Wrap: You need just five minutes to get up to speed on Capital Appreciation, MultiChoice, Spar and The Foschini Group, thanks to Mazars. Find it here>>>
The Current brought to you by Investec: This year, SA is set to become the tenth-largest solar market in the world. In episode 4, Iman Rappetti spoke with Investec's Melanie Humphries, Bernard Geldenhuys and De Wet Taljaard from SAPVIA to explore SA’s apparent solar boom. Enjoy it here>>> |
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| Learn all about Calgro M3 |
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| Calgro M3 is an excellent example of one of the smaller companies on the JSE that has delivered very strong recent share price returns.
To understand why, watch the recording of Unlock the Stock with the Calgro management team, available here. |
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Local company news:
Libstar's growth is being driven by pricing and mix at the moment, which isn't unusual for a business with strong brands. Although it would be good to see volumes heading in the right direction, at least overall revenue growth is positive and so is the trajectory for gross margin.
In the property sector, Fortress, Safari Investments and Schroder European Real Estate all released updates. It's amazing what you can learn about the sector from just three announcements, ranging from demand for logistics properties at Fortress through to valuation pressures at Schroder.
Speaking of valuation pressures, Brait has begun the process of asking bondholders for an extension. There's a partial redemption on the bonds on the table, but an increase in the coupon rate as a sweetener for the extension ruins the fun for ordinary shareholders. Admittedly, draw a chart of Brait and you'll see that there hasn't been any fun anyway.
In regulatory news that caused another flurry of activity on the socials, the TRP has released its findings on the Ascendis complaints. For now, the instruction is for disclosure to be corrected, as Calibre has been found to be a concert party in the potential take-private. More than that, the TRP has left the door open for a further investigation into the parties involved, so that's becoming serious.
As part of a busy day of news (thank goodness for that long wait at Heathrow yesterday that allowed me to work on this), we also saw auction results at Gemfields, an update on student number growth at STADIO and news of a farm disposal at Zeder.
What a day it was, with all the details on these important stories in Ghost Bites at this link>>>
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| Le Mans: The Race to Innovate |
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| Much of the technology in your road car was first proven on the toughest of stages: endurance racing. Specifically, Le Mans.
In the spirit of my first experience watching the race, Dominique Olivier did what she loves most and dug into the trivia. Read it here>>> |
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| The only free lunch in investing |
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| With volatility as the theme in markets in a year of elections, it’s important to keep your head as an equity investor. Take a long-term view and let the market do its job. Easier said than done, of course.
Kingsley Williams joined me to share practical tips and important insights into investing. The podcast and full transcript are available here. |
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International business news:
Retailers looking for value-added services is nothing new, really. This is especially true in lower-growth markets like the UK. Oddly, grocery retailers went down the banking road, literally operating proper banking businesses. If that sounds odd to you, then you're on the right track.
Recently, Tesco (which I see as being similar to Pick n Pay) sold off its banking business to Barclays. The latest example of a very similar deal is NatWest acquiring the banking business of Sainsbury's (closer to Checkers in my view). Sainsbury's will hang on to some elements of the business, specifically the capital-light components that focus on commission revenue.
We covered Stellantis in Magic Markets Premium this week. To get access to this research and the rest of the vast library, subscribe to the platform here. |
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| Macroeconomic Update The rand was below R18.00 earlier this morning but has since moved above that level. Some consolidation in the rand is to be expected after such a strong rally, with optimism around on the GNU on one hand and some caution around whether this is a sustainable situation on the other.
In central bank news, the markets are awaiting the Bank of England decision on interest rates. The People's Bank of China kept its loan prime rate unchanged this morning, with the Bank of England expected to take the same approach.
In data, the release of US jobless claims and the Philadelphia Feds manufacturing index numbers will be closely watched.
Key indicators: USD/ZAR R18.10; US 10-year 4.22%; Gold $2,333; Platinum ZAR R17,698; Brent Crude $85.11
This macroeconomic update is based on TreasuryONE's morning update. |
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