The market has shrugged off the potential Evergrande crisis in China this week, although one should keep in mind that we are approaching the end of a quarter and fund managers are known for what is called "window dressing" - pushing up prices in the market at the end of a quarter to make performance look better.
The JSE All Share is higher than it was last Friday and the rand has also had a decent week. Still, I'm quite happy with my decision to switch into USD cash with approximately 8% of my portfolio. It's impossible to predict daily or even weekly moves in the market, but you have a decent chance of getting the direction right over say a three-month period. My concerns about the rand remain, notwithstanding the dip and recovery this week.
The mystery on the market yesterday was Massmart, up 7.35% in the absence of any news whatsoever. When this happens, there's usually a SENS announcement on the horizon which some people seem to find out about before the time. If this is the case, it would be insider trading and would be illegal of course.
The problem is that when a stock starts moving, lots of day traders climb in and ride the momentum higher. That isn't insider trading, although one always hopes that the JSE looks at the early trades in the day and considers whether anyone might have done something naughty.
Sasol also had a cracking day, up nearly 7% as investors took a bet that there would be good news at the Capital Markets Day event that the company held at midday. The share price action happened before that event and there was a drop after lunch before it eventually settled for the day.
I was happy to note that Transaction Capital had another excellent day, up 6.57%. I love that c ompany and it's a core compounder in my portfolio - a company I can buy and forget. The latest news on the WeBuyCars relationship earns the feature article today.
Investec Property Fund reported a "stabilisation" of the SA business, with major lease renewals concluded. Distributable income per share for the six months to September 2021 came in at between 51.70 and 52.50 cents per share, growth of 10% - 12% on the comparable period.
Remgro reported a drop in headline earnings per share of 8.9% and declared a dividend of 90 cents per share. The share price has traded at a fairly consistent discount of around 35% to intrinsic net asset value (which increased by 14.8% over the year to June 2020).
Spar released a 48-week trading update which notes a group sales increase of 3.9% for the period. Build it was the clear star, up 27.6% although there was the base effect of the hard lockdown. Sales in that business have slowed in recent months, as the home improvement trend has taken a breather.
Spar's Southern Africa business has been heavily impacted by lockdowns (as TOPS is a major contributor) and the lack of an on-demand offer that can compete with the likes of Checkers Sixty60. Interestingly, Spar Switzerland has performed strongly in lockdown, as the Swiss were forced to support local retailers instead of driving across the border to buy cheaper food in neighbouring countries (yes - the Swiss do that because of the high cost of living!)
So, although we have our problems here, at least we can go into Heritage Day knowing that we can afford to shop at our local grocery stores.
InceConnect takes a break on Friday (hence you'll see that the DealMakers content is a day early this week) and returns on Monday. Have a proper braai tomorrow!
The Finance Ghost
