One of my very best mates is currently staying at a hotel he hates because the City Lodge was full for his business trip this week. 100% full. No space. Apparently, when he stays at the ones in Cape Town, the breakfasts are packed with people unless you get there pretty early. The food later in the day is also decent. This is one of the things I love most about investing: you can do some due diligence and learn more about a company simply by asking friends about their experiences.
Not so for Vukile unfortunately, unless you have some besties in Portugal. Iberia really is the new hotspot for our local property funds, with Poland having been the target of most of the love in recent years. Vukile is buying three properties in Portugal, adding to the portfolio in Spain and making the annual report sound increasingly like the preview to an important football tournament. Although they note that the deal is fully funded, this isn't stopping them from raising equity to add to the general war chest for acquisitions.
Moving on, AVI is making a great deal of money from selling coffee and biscuits. They aren't doing quite as well from fish, personal care products and shoes. The overall results look good, but the diversification vs. diworsification debate rages on.
Over at Bell, the latest results are food for thought for those hoping for a better buyout offer. TL;DR: they aren't great. Capitec is the palate cleanser though, with immense HEPS growth. In another earnings update for the day, Sun International delivered a decent overall set of numbers, in which it seems that more people are staying at casino resorts even if they aren't actually gambling!
Finally, I covered Trematon and Wesizwe Platinum as well, along with an assortment of Little Bites. Get everything you need in Ghost Bites>>>
Take a break from busy markets and lift your head to responsible investing, a fairly new area of finance that is developing rapidly. To help in this space, Investec Wealth & Investment International has launched a comprehensive guidebook on the topic. In the latest episode of the No Ordinary Wednesday podcast, Jeremy Maggs interviews the authors, Boipelo Rabothata and Maxine Gray. You can enjoy it here>>>
Don't forget to register for free to attend Unlock the Stock this week with CA Sales Holdings!
Have a great day.
PS: you like the Springboks, don't you? Well, if you refer five friends to Ghost Mail, you stand a chance to win 2x tickets to the Argentina game later this month! Made possible by my Ghost Mail partners, you can find the referral link here. |
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FEATURED: The Trader's Handbook Ep 5 |
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| | IG Markets Episode 5: Pairs trading offers a great opportunity to play one stock off against another, a strategy that means you can take short positions even in a more bullish market. Learn all about it at this link>>> |
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FEATURED: Mastering your portfolio with ETFs and single stocks |
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Ghost Stories: Doing your own research is a great concept and all, but how do you actually do it for both ETFs and single stocks? In this podcast with Siyabulela Nomoyi of Satrix, we dug into this topic. Find it here>>> |
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FEATURED: Julius Caesar and the Veblen Effect |
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| | If LinkedIn was around in the days of Julius Caesar, he would've been a pro at it. Self-promotion was a skill he learnt quickly, with a few pirates along the way to add to the story. Dominique Olivier tells the story here>>> |
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FEATURED: Focus on the future - SARB's annual report on organisational resilience |
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Forvis Mazars: Within the banking sector, organisational resilience is becoming increasingly critical in South Africa, as highlighted in the SARB’s Annual Report. Get the Forvis Mazars team's views and client experiences in this article. |
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Add these to your playlist: |
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- Investec Podcast: As part of the Investec No Ordinary Wednesday series, Jeremy Maggs spoke to Boipelo Rabothata and Maxine Gray of Investec Wealth & Investment International about the newly launched comprehensive guidebook on responsible investing. Find it here>>>
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- Ghost Wrap: In this fast-paced podcast, I covered CA Sales Holdings, RCL Foods + Rainbow Chicken, Motus and Bidvest. Made possible by the support of Forvis Mazars, you can find it here>>>
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- Magic Markets: Comparing India to China is fascinating at the moment, with the former going from strength to strength and the latter losing its shine - for now, at least. To understand some of the structural differences between these critical emerging markets, listen to this show>>>
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Ghost Bites - local company news: |
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Ghost Bites: The latest on AVI, Bell, Capitec, Sun International, Trematon, Vukile and Wesizwe Platinum, along with various Little Bites in Ghost Bites here>>> |
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International Business Snippet: |
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When retailers go bankrupt (and believe me they do), it's usually in quite spectacular fashion. Big Lots has over 1,300 stores in the US and offers bargain basement prices on furniture and decor products. Focusing on lower- and middle-income customers, Big Lots is a casualty of the macroeconomic conditions and stubbornly high interest rates.
Of course, they aren't without blame. Inevitably, the balance sheet is part of the problem, as is the lack of a real moat vs. numerous competitors. Retailers with messy assortments and incoherent offerings are most at risk, which is part of why Mohammed Nalla and I are bearish on Dollar Tree in our latest Magic Markets Premium research. It comes out on Thursday for our subscribers.
It's also not surprising to see that a private equity firm is getting its hands on the carcass. It's rare for retailers to disappear completely. Instead, they tend to file for bankruptcy and then be "saved" in renewed form. For a local example, look no further than Edcon. |
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IG Morning Call: daily macroeconomic update |
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US and European Index futures are pointing to a slightly lower start to partially temper yesterday’s rebound in equity markets. Asian indices are however trading off the day's lows despite weaker consumer sentiment data. We are in turn expecting a flat to marginally lower start for the JSE All-Share Index this morning.
The dollar is trading at a three day high. Markets continue to price in a 25 basis points cut in US lending rates next week with a 29% probability of a 50 basis points move instead. The rand remains unchanged against the greenback overnight.
Oil prices remain depressed hovering around their lowest levels in more than a year as falling Chinese crude imports further demand concerns for the commodity.
Gold is marginally lower overnight.
On the international data front, there is little news scheduled for today, although this week traders will want to watch out for US CPI inflation data and the ECB monetary policy meeting for short term direction.
On the local front, Manufacturing PMI data is scheduled for release around midday.
Key Indicators: USD/ZAR R17.86/$ | US 10yr 3.70% | Gold $2,500/oz | Platinum $943/oz | Brent Crude $71.50
The macroeconomic update is based on IG's morning call update |
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