View in web browser

Good Morning Voornaam,

It's Monday, which means Chris Gilmour got the typewriter out this weekend and wrote something for us.

Ok, he probably did it on something more modern, but his experience in the market goes back so far that he was certainly on a typewriter at some point. This historical context is why his articles are always worth a read, whether he is writing on geopolitical topics or sectors on the JSE.

This week, Chris decided to focus on non-discretionary retailers on the JSE. This includes the three major supermarket groups (Shoprite / Pick n Pay / Spar), food and general merchandise retailer Massmart as well as the two pharmacy groups (Clicks and Dis-Chem). Within that group of course, business models and performance vary wildly.

Interestingly, local retailers have tended to find the strongest support among international investors. Local investors seem to be shy of the sector, perhaps because we are exposed to South Africa's many risks almost every day of our lives.

If you are ready for an excellent overview of this sector on the JSE, be sure to read this feature article.

In local market news, we saw an excellent trading statement out of PBT Group on Friday. This company offers exposure to exciting global tech trends, without demanding the kind of multiples seen on the Nasdaq. Another technology company with a totally different investment thesis is Etion Limited, which has been a value investor's dream.

We also saw updates from two companies that have been wonderful examples of long-term value destruction: Steinhoff and Tongaat. The former has one foot left in the fire and the latter is standing squarely in the middle of it. I would strongly suggest being careful with both.

For these updates and several others, make sure you read Ghost Bites today.

On Friday afternoon, I joined the SABC News team for a live TV discussion on recession risks, the timing of share buybacks, my assessment of local vs. offshore retailers, the way I think about different sectors in this environment and whether I'm selling any shares at the moment. The recording is available on YouTube and I've incl uded the video at this link to help you find it.

Trying to understand the links between inflation, currencies and commodities isn't easy. Luckily, we have daily updates from the team at TreasuryONE to keep us informed. On Friday, the rand traded sideways until University of Michigan CPI data led to them lowering their five- to ten-year inflation forecast to 3.1%, which caused the US dollar to lose some ground. The rand was a benefactor of a weaker dollar, trading down to R15.77 against the US dollar. This data eased the market's anticipation of aggressive hikes, suggesting that a softer landing may be possible. Commodit ies went into the green after the release, including oil trading over $113 per barrel.

Remember, the team at TreasuryONE is ready to talk to you about the impact of these risks on your business and how you can mitigate them to the greatest extent possible.

For a podcast that I'm certain will teach you new things about financial structuring, Episode 81 of Magic Markets a> is a great discussion with the team from Westbrooke Alternative Asset Management about the concept of "hybrid capital" - a combination of debt and equity instruments designed to manage downside risk while achieving upside potential. The only way to move forward in your journey is to learn new things. In Magic Markets, we are proud to offer you a platform to do exactly that.

Have a great Monday!

JSE retailers - where is the value?

In this detailed piece, Chris Gilmour considers the non-discretionary retailers on the JSE and where investors might find value (or not).

Securing portfolio stability during anxious times

While many investors bias their decisions towards higher returns and a search for alpha, diversification and the inclusion of lower risk options remain an important part of the mix.

Ghost Bites Vol 35 (22)

PBT Group released a great trading statement. There are also important earnings updates from Steinhoff and Etion, with news from Tongaat and others as well.

SABC News interview: patience in a bear market

In an SABC News interview, I discussed recession risks, the importance of share buybacks in this environment and whether I am buying or selling at the moment.

Magic Markets Ep81: Hybrid Capital

Hybrid capital investments achieve a return somewhere between debt and equity, with downside protection and upside exposure.

Listen Now

EasyEquities is a product of First World Trader (Pty) Ltd t/a EasyEquities which is an authorized financial services provider (FSP no.2225880) and a registered credit provider (NCRCP12294).

EasyProperties is a juristic representative of the First World Trader (PTY) Ltd t/a EasyEquities which is an authorised financial services provider (FSP) number 22588.

EasyEquities does not act as an FSP when allowing you to buy and sell the EC10 bundle as well as any other cryptocurrencies.

Disclaimer

Our content is intended to be used and must be used for informational purposes only. You must do your own analysis before executing any investments or strategic decisions, based on your own circumstances. We do not provide personalised recommendations or views as to whether an investment approach or corporate strategy is suited to the needs of a specific individual or entity. You should take independent financial advice from a suitably qualified individual who gives due regard to your personal circumstances.

Whilst every care is taken, we accept no responsibility or liability for any errors or omissions in any of our content.

The views, thoughts and opinions expressed in our content belong solely to the author or quoted individuals and/or entities, and not necessarily to the author's employer, organisation, committee or other group or individual, or any of our affiliates or brand partners.