| Good morning Voornaam, Welcome to April, the aftermath of a wild earnings season on the JSE. It's time to take a breather and use this time to enhance your market knowledge and engage deeply with topics, rather than having to absorb loads of information about earnings updates each day.
For example, the latest article from Kingsley Williams at Satrix is an excellent reminder of how the market "pays you" to stick around for a longer period of time. There's a podcast coming in the next few days about diversification and balanced funds. In the meantime, this article will whet your appetite and introduce you to some technical concepts.
The most important company news yesterday came from iOCO, the renamed and restyled EOH. Their strategic initiatives are working, with the company achieving a substantial uptick in margins that definitely exceeded my expectations. Now, if only they could inject some excitement into revenue!
At Kore Potash, it's not a good look that the Summit Consortium is running late with the non-binding funding proposal. Goodness knows they've had enough time to think about the terms, as we've been hearing about this consortium for the longest time.
There's also a Renergen quarterly update, with the usual mix of good and bad news.
As always, these details and the Nibbles are available in Ghost Bites at this link>>>
There was plenty of news yesterday about political jostling and the Budget Speech. Politicians will do what they do and you can be sure that the narrative will change based on who is telling the story. For an objective view on whether VAT is anti-poor and how bracket creep affects South Africans, you can enjoy my recent podcast with Tertius Troost of Forvis Mazars in South Africa. Get it here>>>
The latest Magic Markets episode continues our theme of looking beyond the US to show you what else is out there. This week, we talked about the macroeconomic outlook for African currencies and the South African companies that would benefit if things went well. We also discussed the elements of offshore acquisitions that can make them successes or failures. Get it here>>>
Have a great day! |
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| CAUTION: potholes ahead! - Kingsley Williams, Satrix |
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| | | After a tough first quarter of the year, investors seeing their portfolios decline in value may be questioning whether their current strategy is still right, or if a change is needed.
Kingsley Williams of Satrix shares his insights into diversification and portfolio strategies, including some important evidence of why "time in the market" is something to strive for.
Enjoy it here>>> |
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| GHOST STORIES: VAT strategies, bracket creep and what it means for South Africans |
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| | | With the dust having settled on the Budget Speech and the proposals that parliament will need to vote on, Tertius Troost of Forvis Mazars in South Africa joined me to reflect on the key drivers behind the headlines.
VAT has been the focus area, but is it true that a VAT increase is anti-poor? And is it correct to rebut the “South Africa has a small taxpayer base” argument by pointing out that everyone pays VAT? What is bracket creep and how does it affect middle-class South Africans?
These questions and more are answered in this podcast>>> |
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| GHOST WRAP: Q1 winners on the JSE |
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| In considering how the first few months of the year have played out, some surprising winners have emerged. The performance in gold is simply a case of the sector carrying on where it left off in 2024, but what about platinum? And where did that telecoms rally come from? Also, have retail stocks continued their slide since the previous episode of Ghost Wrap that focused on that issue?
You can find the recording and the transcript (with charts) at this link>>> |
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| GHOST BITES - Making sense of SENS on the local market |
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| | | iOCO (ex-EOH) has made great progress with its margins. Kore Potash has given investors something new to worry about. Renergen released a quarterly report with mixed news. Get the details in Ghost Bites>>> |
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| Unlock the Stock - Homechoice International |
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| In the 49th edition of Unlock the Stock, Homechoice International made its debut on the platform to talk about the interesting mix of retail and fintech businesses in the group. The recording of the management presentation and interactive Q&A is available at this link>>> |
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| DOMINIQUE OLIVIER - Hot takes: chillies and the human desire for suffering |
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| | | Curry. Con carne. Arrabbiata. Peri-peri. In almost every corner of this world, you’ll find a dish that’s been given the signature bite of the chilli pepper. As strong as they are small, these pungent peppers have achieved the culinary equivalent of world domination, when all they really wanted to do was to get us to stop eating them. Dominique Olivier explains>>> |
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| INVESTEC PODCAST: Global economy - recession or recovery? |
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| | | Recession risks, inflation pressures, and trade tensions - how is the global economy shaping up in 2025? Investec’s Chief Economists, Phil Shaw (UK) and Annabel Bishop (SA), take stock of the latest trends in No Ordinary Wednesday. From global growth forecasts to the economic outlook for Europe and South Africa, they break down what lies ahead in this podcast>>> |
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| International Business Snippet: |
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| Sportsman's Warehouse is a name that South Africans will know well. There's an unrelated business in the US with the same name, except it has a hunting rifle as the image that comes up on Google next to its name. This is 'Merica, remember, where hunting is about as common in many places as inviting your mates over for a braai.
Bucking the retail trend, the company released earnings that reflected a profit rather than the loss that the market expected. Although same store sales were down slightly, the drop was far less severe than in the comparable period. Quarterly trends are on the up here, at exactly the same time that most retailers are having a tough time.
The outdoor and leisure apparel market has been terribly overstocked in the aftermath of the pandemic. Perhaps this has finally worked its way out of the system. Of course, what investors really want to see is a proper shift into the green, not just a "less bad than before" narrative.
Of course, Magic Markets Premium is where you'll find the research that drives my watchlist. This week, we covered BMW as part of our efforts to look at opportunities beyond the US. For our subscribers, the report on BMW drives home the point of how severe the Chinese disruption really is. |
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| Magic Markets: The art of investing in art |
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| | | Magic Markets: Tristanne Farrell isn’t shy to admit it: she’s mildly obsessed with art. As a Senior Wealth Manager at Investec Wealth & Investment International, her day job is to help clients build diversified, successful portfolios. Thankfully, with art as one of the more interesting (and certainly most visually stimulating) alternative assets out there, she gets to enjoy some overlap between her passion and her career, including hosting the Art in Focus podcast series.
She joined us to talk about art as an investment, bringing a mix of genuine passion and solid insights into this asset class. To learn more, listen to this podcast>>> |
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| Macroeconomic indicators and IG Markets macro update |
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| Global investors remain on edge as they await President Trump's tariff announcement scheduled for today. This heightened uncertainty has resulted in mixed performance across US stock markets, though futures have managed slight gains overnight.
Market volatility has increased as traders speculate about the scope and immediate impact of these tariffs, which are expected to take effect without delay and could significantly disrupt established global trade patterns.
Despite widespread concerns that these tariffs might trigger a global economic slowdown, European markets have demonstrated surprising resilience. This strength is partially attributed to Germany's recently announced fiscal package and growing expectations that US economic growth may decelerate, potentially leading to more accommodative monetary policy.
Investors are maintaining a cautious outlook regarding the long-term implications for European markets. Goldman Sachs has already downgraded its forecast for the European benchmark index in anticipation of negative impacts from the impending tariffs.
Asian markets showed mixed results today, with Japan's Nikkei 225 edging slightly lower while Australia's S&P/ASX 200 gained 0.2%. Hong Kong's Hang Seng Index experienced a more significant decline of 0.9%, reflecting regional concerns about potential trade disruptions.
In currency markets, the US dollar continues to face downward pressure amid growing economic uncertainty and evolving trade policy dynamics. This weakness has contributed to gold's ongoing rally, with prices climbing to new heights as investors seek safe-haven assets. The primary drivers behind gold's impressive performance include geopolitical tensions, economic slowdown concerns, inflation worries, anticipated interest rate cuts, and the weakening dollar.
South Africa's Government of National Unity faces internal tension after ANC and IFP members supported an ActionSA recommendation during a finance committee meeting, despite ActionSA not being part of the coalition. The proposal calls for cancelling the planned 0.5% VAT increase for 2025/26 and requires the National Treasury to find alternative funding within 30 days. Though ActionSA claims victory, their recommendation isn't binding, and the finance committee report still includes the VAT increase. The DA has criticised the move, warning it could lead to a larger 1% VAT increase over two years instead. This has resulted in further weakening of the rand against the majors. The JSE All-Share Index is now also expected to open slightly lower this morning.
Oil markets have stabilized after yesterday's decline, as traders balance tariff concerns against other factors affecting global energy dynamics. Additional complexity comes from threats of secondary tariffs on Russian oil and increased sanctions on Iran, further influencing price movements in the energy sector.
Key Indicators: USD/ZAR R18.58/$ | US 10yr 4.19% | Gold $3,116/oz | Platinum $1,002/oz | Brent Crude $74.51
As often as practically possible, insights from the IG Markets morning macro update by Shaun Murison will be featured here. Where this isn't possible, only indicators will be provided. If you want to learn more about trading, refer back to The Trader's Handbook, a podcast series that takes you through many of the important principles in trading. |
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