Ghost Bites:

• Anglo American has raised a sustainability-linked loan
• FirstRand put in a solid financial performance, but the share price looks fully valued to me
• Metair will try hard to forget about the latest financial period

For more information on these stories and more (including earnings guidance from City Lodge), read the new and improved Ghost Bites at this link>>>

Competition is a beautiful thing for consumers

The direct-to-consumer (DTC) trend in retail is something that truly fascinates me. Having worked for a short while in a major retailer, I got to know some of the terminology used in the industry and the key pressure points. I also learnt that online sales are almost always at a lower margin than in-store sales.

In fact, if the basket size isn't large enough, the sales are sometimes made at a loss! This is especially true in grocery retail, which has much lower margins than apparel.

In the US, giants like Nikeare actively pursuing this DTC strategy. They want to capture the full margin (wholesale + retail) and they want a direct relationship with customers. For example, I have recently picked up tennis again (the sport I loved so much in high school) and I needed new tennis shoes. A pair of Nike shoes caught my eye and I didn't see them on any of the local online stores. I certainly wasn't about to waste time walking around trying to find them. A quick visit to the Nike online store revealed a ZAR price, a guaranteed cost to land (no nasty surprises in terms of custom duties) and a decent lead time to get them to South Africa. By signing up for a Nike "membership" (which just means giving them my email address), I would also be able to return the shoes for no cost if they didn't fit.

For me as the consumer, I have access to the full Nike range. For Nike, they now know that I play tennis and they are sending me offers on tennis clothes (hence the data is valuable). For local retailers, that is insanely hard to compete with.

It's no different in the US, where Foot Locker is fighting to stay relevant with consumers. It's not just Nike either, as the likes of Adidas and Under Armour are following the same strategy.

In Magic Markets Premium this week, we covered Dick's Sporting Goods. Leaving the unfortunate name aside, it's a fascinating business that would get any sports enthusiast excited. The company is facing the same DTC pressures as Foot Locker, with Nike making up almost a fifth of purchases! This makes it a great stock to debate from a strategic perspective.

If you are taking your investing or trading seriously and you want to learn more about how to unpack a strategy and asse ss the numbers and the valuation, then Magic Markets Premium is where you need to be.

At just R99/month or R990/year it's perhaps the best investment you can make. Click here to subscribe >>>

In the latest free episode of Magic Markets, we discussed the US CPI release and the mayhem that it caused in the market. This also included a discussion on China and Europe, including some South African companies that have European exposure. Listen to Ep93 here>>>

Bloody noses everywhere

I'm afraid that TreasuryONE doesn't have much good news for us this morning, unless you had a short position on the rand. It reached R17.57 to the dollar before looking to close below the R17.50 handle. The Chinese Yuan flirted with 7.00 against the dollar for the first time since Covid.

US Treasuries continued to rise at the prospect of more significant hikes later this year. The 2-year yield rose to 3.841%, with the 10-year and 30-year at 3.43% and 3.48% respectively.

Looking at commodities, gold fell all the way down to $1,665 having broken through a key support level at $1,680. In a silver lining for most of us, Brent Crude fell by 4%.

Unlock the Stock - CA&S Group

This is a great platform for retail investors who usually have zero chance of getting access to management teams of listed companies. I'm really proud of what we've achieved with Unlock the Stock and I'm thrilled that there is another event next week!

The CEO of CA&S Group will be presenting the business and taking your questions. If you ever wanted to learn more about FMCG and retail, this is a wonderful opportunity.

Best of all, attendance is free! The event is next Thursday at 12pm and you need to register to attend at this link>>>

Finish your week off with DealMakers

Every Friday, the team from DealMakers brings us great summaries on the cor porate activity of the week. This is split by the type of announcement (M&A vs. other corporate activity) and there is also a summary of deals in Africa. For those interested in learning more about commercial law, there's also a piece on the validity of guarantees and suretyships.

It's been a busy week with some significant changes to Ghost Mail and Ghost Bites. I hope you've enjoyed them!