Retail apocalypse

Good Morning Voornaam,

The volatility in single stocks at the moment is quite something to witness. You need a very strong stomach to watch your positions get thrown around like a cheeky scrumhalf who found himself on the wrong part of the field. A technique often used by investors is to combine a solid underpin of ETF exposure with positions in individual stocks, smoothing out portfolio performance and giving broad market exposure in a cost-effective way. I discussed this approach with Duma Mxenge (Business Development Manager at Satrix), along with a multitude of other insights into ETFs. Listen to the Ghost Stories show here>>>

To complement the view on broad exposure, give the Ghost Wrap p odcast a listen for recent news on Pan African Resources, HCI, Southern Sun, Datatec, Astral, Quantum Foods, Lewis Group and Trematon. As always, this podcast is brought to you by Mazars.

I love the fact that you can also take a much deeper dive into just one stock, with Trive South Africa's article on Renergen. It includes both fundamental and technical analysis in their signature style, which gives you a really good idea of how market professionals tend to assess trading opportunities. Read it here>>>

As your research journey intensifies, a wonderful platform is Unlock the Stock. On these webinars, management teams of local companies present their recent results and participate in a vibrant Q&A. I am so proud of what has been built here alongside my partners in this initiative. The latest recording was of Calgro M3's presentation, with the company having a lot to smile about in the recent numbers.

For the deepest research in my ecosystem of all, you should be a subscriber to Magic Markets Premium. For just R99/month (which I learnt yesterday barely buys you a sausage roll in some parts of Cape Town), you get access to a wonderful research library of over 80 reports and podcasts on global stocks. Alongside my highly experienced partner Mohammed Nalla, w e deliver proper analysis and views on the companies that are relevant to your global portfolio ambitions. There's no minimum obligation beyond the first month, so why not give it a try? Subscribe here>>>

With those examples of the research funnel in Ghost Mail out of the way, let's move on.

An update on Grovest's green energy fund

You may recall that Jeff Miller (CEO of Grovest) joined me on a Ghost Stories podcast a couple of months ago to talk about the Twelve B Energy Fund. The tea m has given us an update in the form of this article, noting the capital deployed to date and the types of solar projects that they are investing in.

The Grim Reaper visits Spar

There's a meme that gets used frequently on FinTwit, with the Grim Reaper knocking on one door at a time down the passage and leaving a trail of blood behind it. The joke on Twitter is that the name on the doors is changed, reflecting a sequence of companies that have been hammered by a particular theme and giving a view on which company might be next in line.

Local retail certainly fits that meme right now, with a combination of load shedding, input costs and consumer pressure that is making the Grim Reaper's job far too easy. Spar was next in line, being slashed by 15% after releasing numbers. The worst part is that it's not obvious how the situation improves in the second half of 2023 for any of these companies. I remain very bearish on the sector.

I must also highlight Huge Group, which now puts itself forward as an investment holding company. This means that the net asset value (NAV) per share is theoretically the right valuation metric, based on the director valuations of the underlying assets. When the traded discount to NAV is absolutely enormous, the market is trying to send a message about how much faith it puts in the company's view on its NAV. I decided to dig into the valuation inputs in the latest results and immediately found why the market isn't buying that story.

Aside from various small caps that released results on a super busy day, I covered the following updates in detail: Afine, Capital Appreciation, Copper 360, Fairvest, Impala Platinum, Mahube Infrastructure, Nampak, Sirius and Tongaat Hulett. Of course, Spar and Huge feature prominently. It's all just one click away in Ghost Bites>>>

Looking for something different?

In a world far away from South African retailers being slaughtered by load shedding, we find a way to make money that is linked to crypto without taking a view on the price direction of crypto. Harry Scherzer of Future Fo rex has been on Magic Markets several times and there is a long list of happy clients who have contacted us in subsequent months to confirm the quality of the service offering. The arbitrage trade requires a lot of execution skill, something that Harry discusses with us in the latest episode of Magic Markets. We also talked about the evolution of the Future Forex business model. Find it here>>>

Slipping towards R20

TreasuryONE points out that the rand seems to be weakening slightly almost every day, trading close to R19.80 yesterday after open ing at R19.70. It doesn't help that some Fed speakers remain hawkish as we approach the June Fed meeting, with a 25 basis points hike expected. The JOLTS number out of the US surprised to the upside, supporting hawkishness.

The US economy still looks strong on paper, something the non-farm payrolls number will possibly confirm on Friday. The rand remains highly vulnerable.

Good luck out there today!

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