Local company news:


Ghost Bites is brought to you by Fedgroup.

Sasol isn't on the Christmas card list of a single environmentalist in South Africa, that much I can tell you. The company's AGM is usually the target of protest action, radicalising some people along the way into hardcore environmentalists or haters of such behaviour. My view, as usual, is that somewhere in the middle is the best approach. We always have to recognise the environmental impact. We also can't be blind to social impacts like jobs and the ability for people to feed themselves. We live in a world of tough trade-offs and it's very hard to get people to agree on which negative outcome is the best one. Sasol has won its appeal related to emissions at Secunda Operations for exactly that reason.

Meanwhile, MultiChoice is on a rather fascinating trajectory. The R125/share offer from Canal+ is underway, with a firm intention announcement now released. It's structured as a mandatory offer rather than a scheme, which has important implications for MultiChoice's listed status (read Ghost Bites for more details). Perhaps the more interesting thing is a potential full merger and separate listing with Canal+ down the line. Watch this space.

In other deal news, Goldway declared its offer for MC Mining to be unconditional, as sufficient acceptances were received. That came as quite the surprise, although this tale has been full of twists and turns.

Finally, Sirius has closed some recently announced property deals and has announced a further disposal.

There's a lot of great stuff in here, especially for fans of dealmaking and major corporate activity. Get all the details and my thoughts in Ghost Bites at this link>>>

Check out the most recent episode of the Ghost Wrap podcast, made possible by Mazars. It takes just a few minutes to get the latest on Transaction Capital, Sun International, Thungela and OUTsurance. Get it here>>>
 

Macroeconomic Update

Currency markets are trading sideways in tight ranges ahead of US inflation numbers and the release of Fed FOMC minutes. The strong recent US payroll data is keeping US Treasury yields high and the dollar firm, with the market pushing back the expected timing of cuts by the Fed. Also look out for the ECB meeting on Thursday this week, with analysts expecting rates to be kept on hold with a dovish outlook.

The rand is stuck in a range from R18.50 to R18.80. Although it seems to be building a base around R18.55, a move back to the upper end of the range is possible.

Recent stronger manufacturing PMIs out of the US and China raised hopes that manufacturing data has bottomed, which is great news for base metal prices and PGMs. Demand expectations also support the oil price, as do tensions in the Middle East.

Key indicators: USD/ZAR R18.64; US 10-year 4.41%; Gold $2,344; Platinum ZAR R18,200; Brent Crude $90.58

This macroeconomic update is based on TreasuryONE's morning update.

International company news:


The Ulta Beauty share price has lost around 17.5% in the past month, although most of that action came in the past week. This is another case of the market panicking about growth expectations, which is what happens when you have the US market trading at such high equity multiples in general.

At a JPMorgan conference, the CEO of Ulta commented that sales will grow in the mid-single digits for the year. It shows you how unrealistic the market expectations were that such a comment can drive a precipitous drop in the price. The cosmetics and broader beauty category has been fantastic for retailers, with a combination of high margins and long shelf life. Even this category isn't immune to pressure on consumer budgets, which creates a dangerous situation when paying a high multiple for a retailer like Ulta Beauty.

We cover global giants and interesting smaller opportunities in detail in Magic Markets Premium. As an example of the variety, our most recent report is on energy utility Emera. You can get our entire research library for just R99/month. It pays to know what's going on out there - literally.