Chicken crisis

Good Afternoon Voornaam,

Did you have a great weekend? Did watching the Wallabies (and Eddie Jones) lose make up for our defeat at the hands of Ireland? Are you ready to face the Irish again in the final?
Those are the real questions at work today. I'm here to help you get the markets stuff out of the way efficiently so that you have more time for sport.
Lend me your ears
The Ghost Wrap podcast is the perfect example of this, with a bumper edition today. I covered the small cap tech groups (Capital Appreciation, PBT Group and Mustek), Bidvest's acquisition in Australia, Hyprop's outlook vs. Growthpoint, the chicken disaster at Astral Foods and Quantum Foods, terrible numbers at Trellidor and finally, Southern Sun's metrics vs. City Lodge. Thanks to Mazars, you get all of that in just 7 minutes. Find the podcast here>>>
In the latest Magic Markets podcast episode, we looked at global tech giants Adobe and Salesforce. Both of them have great software-as-a-service businesses, with Salesforce as the pioneer of that model. Even more interestingly, both of them have compelling Artificial Intelligence strategies. There's no fluffy stuff here. There are only great insights delivered in a fun format, made possible by data and process automation specialists B2IT. Enjoy the podcast here>>
With a new Ghost Stories podcast scheduled for imminent release, don't fall behind on these insightful and varied podcasts. The most recent episode was a discussion with Nico Katzke of Satrix, where we talked about dividends and capital allocation strategies by companies. You may not know this yet, but dividends can be a red herring! Find out more in this podcast>>>
Lend me your ears again, as well as your eyes
Even though Mark Tobin is Irish, you'll be pleased to know that the Unlock the Stock team enjoyed healthy banter over the weekend rather than a dissolution of our efforts. That's just as well, because Unlock the Stock is incredibly helpful to investors who want to learn more about the companies featured on the platform. The latest such example is Harmony Gold, brought to you by A2X and with the recording available here>>>
Last week's bizval webinar with Sibusiso Mbonambi was a great success. Along with the attendees, we certainly put him through his paces in explaining what a "Search Fund" is and how he attracted a global base of investors to back him to acquire a South African private company. For founders and enthusiasts of private equity alike, this was a stunning conversation. You can watch the recording here>>>
We are going to run out of chicken puns
Hopefully, we aren't going to run out of chicken as well. Every time I read poultry group updates, I can't help but feel worried about what is happening with South Africa's staple protein that tens of millions of people depend on. It really is a perfect storm right now for the industry, with massive bird flu outbreaks making everything even worse. We already know that Astral Foods has been slaughtered by these conditions. Quantum Foods is in the same boat, although we don't know how severe the losses are yet.
Moving on from chicken, I'll cover the last bit of unpleasant news before ending with happier things. Gemfields won't be paying an interim dividend this year, as HEPS has fallen substantially and the company has major investment projects. Although the narrative is all about how last year was a standout and hence the year-on-year comparison isn't fair, the reality is that this result is below 2021 as well, not just 2022. In my view, only the weakness of the rand is supporting this share price.
Ending on a better note, Investec managed to produce some decent growth numbers. The South African business isn't growing quickly enough to offset rand depreciation in a meaningful way, but the UK business is growing strongly. There's also some decent news at Texton for shareholders, with the offshore fund-of-funds capital allocation strategy helping to grow distributable income. I don't like that strategy in terms of the wide discount to NAV that it promotes, but it has propped up earnings this year. And finally, Life Healthcare has renewed the cautionary for a potential Alliance Medical Group deal.
As always, you can get everything you need to know with a single click in Ghost Bites, available at this link>>>
The rand enjoyed an emerging markets rally
As last week drew to a close ahead of the long weekend, the rand enjoyed stronger trading at R18.70 to the dollar. This morning, it is trading at R18.80. TreasuryONE notes that a broad-based recovery in emerging market (and thus risky) assets gave the rand something to smile about on Friday, although this was perhaps attributable to profit taking on the dollar rather than anything specific.
Most commodities also enjoyed a positive end to the week. The same is true for Brent Crude unfortunately, with South Africans taking serious strain at the pumps.
TreasuryONE is publishing a weekly newsletter on LinkedIn and I think it looks great, with snappy insights and useful links. It comes out every Friday and you can find the latest one at this link>>>
Have a great Tuesday!
PS: Singular Systems is still looking for a tax data analyst in Johannesburg. If you enjoy seeing how "big data" really plays out in practice, this could be for you. Find out more here>>>

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