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Good morning Voornaam,

Highlights in this edition of Ghost Mail:

Merafe's production was significantly lower in 2023
Frontier Transport declares a special dividend
US bank earnings were patchy and filled with once-off charges
Dominique Olivier on how the safety culture at Boeing fell apart
TreasuryONE on PPI numbers, US Treasury yields and the latest on oil and gold prices

Local company news:

In Ghost Bites this morning, you'll find all the details behind why this production chart that I made based on Merafe's numbers is important:

You'll also learn about Frontier Transport's special dividend and the substantial rally that this catalysed in the share price on Friday. When companies trade at modest multiples, this is the kind of thing that can happen.

Property investors will be interested in the movement in Schroder European Real Estate's portfolio valuation over the three months to December 2023. Spoiler alert: it went the wrong way.

There's also news of Sappi's closure of the Lanaken Mill in Belgium. This is the unfortunate by-product of the company's decision to focus its operations and reduce excess capacity in the European market.

Finally, I wrote on Tongaat-Hulett's meeting of creditors to vote on the business rescue plan. Although it was a formality with only one bidder left in town, the approval was still important.

Get all the details you need on these stories in Ghost Bites at this link>>>

International company news:

The US "big bank" earnings season has been a patchy story.

For example, sector stalwart JPMorgan Chase saw quarterly earnings fall 15% year-on-year because of a substantial fee related to government seizures of failed regional banks last year. The year was strong overall though, which is why the share price is up 20% over the past year.

The same can't be said for Citigroup, with share price growth of less than 5% in the past year. The group reported a loss for the fourth quarter that was filled with unusual charges, not least of all restructuring costs. The bank is planning to reduce its headcount by 20,000 people! That's a lot of jobs.

The Bank of America share price is down 5% over the past year. The latest results also included various once-off charges, including a large knock related to the transition away from the London Interbank Offered Rate (LIBOR).

And what of Goldman Sachs, the most famous investment bank of all? The share price is up just 8% in the past year, with the bankers having struggled in an environment of lower deal activity and certainly far fewer IPOs than during the pandemic.

When it comes to US banks, I'm very much in the "in Jamie Dimon we trust" camp. That worked out just fine last year, with JPMorgan as the bank you wanted to own.

Speaking of international company news, the Magic Markets podcast is a wonderful way to keep expanding your knowledge. In the latest episode brought to you by data automation specialists B2IT, we covered two brands that might have been a feature of your festive shopping lists: Pandora and Swatch. Although they arguably have similar models at first blush (jewellery / watches direct to consumers), the share price charts couldn't be more different over the past year. To find out why, listen to the show here>>>

READ: Boeing, Boeing, Gone!
(by Dominique Olivier)

With Boeing in the news again for all the wrong reasons, Dominique Olivier shows the dark side of M&A and how the quest to cut costs can lead to tragedies. This is a great article and an important read.

Learn about the injustices and terrible shift in culture at Boeing

Currencies, commodities and rates: TreasuryONE Market Update

US producer price inflation (PPI) was unexpectedly lower, coming in at 1.0% for December vs. an expected 1.1% year-on-year. Along with the report of weak demand for goods, this led to a drop in US Treasury yields. The uninspiring earnings reported by US banks also contributed to this. The yield for two-year US Treasuries dropped to 4.22%, the lowest it has been since May 2023.

The rand traded between R18.60 and R18.67 on the day, as currency markets didn't react as sharply to the PPI update as fixed income markets did.

Looking at commodity prices, oil surged after airstrikes by the US against Houthi rebels in Yemen in response to attacks on shipping routes in the Red Sea. Shipping routes are being heavily impacted as a result of these attacks. Brent Crude neared $80 a barrel as the market considered the potential involvement of Iran in the conflict. Gold also moved above $2,050 as investors sought safe haven exposure.

In a disappointing update from the Dakar, the TreasuryONE team sadly had to withdraw after a valiant fight through technical issues that proved to be too much for the team. The Dakar is one of the toughest races in the world and this is a solid reminder of just how substantial the challenge is.

LISTEN: Magic Markets podcast

In Episode 157 of Magic Markets, we dived into the recent results and strategic drivers at Pandora and Swatch. Although they are effectively adjacent to each other in the speciality retail space, the share price performance couldn't be more different in the past year.

Why is that the case? Find out in this podcast brought to you by international data and automation specialists B2IT.

Listen to Magic Markets Episode 157 here (24 minutes long)

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

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