The Best Bites:

• Prosus has sold more shares in Tencent to fund its repurchase programme, reducing its stake in the Chinese tech giant to 27.99%

• Capitec's HEPS is 15% to 18%higher in the six months to August 2022 - that's nowhere near enough to justify the current valuation, so the share price closed 9.4% lower

• Tongaat Hulett finally released financial information for the year ended March 2022 and it really isn't pretty, with the group fighting for its life by trying to fix the balance sheet and raise capital for working capital requirements

At Transaction Capital, we buy WeBuyCars

WeBuyCars now contributes around half of Transaction Capital's earnin gs. The group holds a 74.9% stake and will be taking this to around 90% as part of the next leg of the deal, leaving the founders with 10%. They have the right (but not the obligation) to sellthat10% to Transaction Capital in years to come.

To make that happen (along with a few other initiatives), Transaction Capital is raising R1 billion through an accelerated bookbuild process. This means that institutional investors would've been contacted yesterday evening and asked to indicate their interest in more shares and at what price. You can expect to see the share price drop a bit this morning.

But, what is happening at SA Taxi?

For me, this is far more interesting.

Transaction Capital has built a business called GoMo that is focused on finance and insurance (F&I) products sold through the WeBuyCars network. For some reason, they have elected to structure this inside the SA Taxi business, even though it seems to have little bearing on the rest of the SA Taxi business. I must also highlight that there are outside shareholders in SA Taxi, notably SANTACO as the B-BBEE partner.

The SA Taxi business has been under pressure, so this is clearly a move to improve that segment's prospects. It just seems a little... odd, to me at least.

You can read more about Transaction Capital,Tongaat Hulett, Capitec, Sanlam and others in Ghost Bites this morning.

DealMakers

It's Friday, which means the team from DealMakers is here to bring you excellent summaries of the week's activity. For example, you could check out the South African M&A activity or the local corporate finance activity.

There is also an insightful article on the impact of macroeconomic volatility on M&A activity in 2022.

Rand on a slippery slope

As TreasuryONE and the broader market expected, the ECB hiked rates by 75 basis points. The initial reaction to the news was muted until ECB President Christine Lagarde spoke and moved the markets by noting that more rate hikes are forthcoming. The hiking of rates combined with high energy costs will cause growth to slow down significantly.

Given the prospect of recession in the eurozone and the positive data out of the US, the market has clearly chosen the US dollar.

As for the rand, the South African Current Account print came in as a deficit as expected. This caused the rand to wobble, driving it to R17.50 when combined with the market's strong appetite for the dollar.

Gold also nosedived based on the strong dollar, trading within touching distance of $1,700 per ounce.

The focus next week will be on the CPI number out of the US.

Finally, there's a new episode of Magic Markets!

Listen to Episode 92 at this link, with Craig Antonie from AnBro Capital Investments joining us to discuss a company called Patria, which is considered to be the Blackstone of Latin America.

Have a lovely weekend!