Life after REIT

Good Morning Voornaam,

If you're wondering what you can do with less than 30 minutes today, allow me to make a recommendation:

As for the other 2 minutes, perhaps just spend them making something warm to drink while enjoying the podcasts?

Doritos, anyone?

This is nacho ordinary investment newsletter.

Awful dad jokes aside, the latest piece from Trive South Africa puts the focus on PepsiCo as a tremendously resilient FMCG player in a time of inflation. We've also covered this stock before in Magic Markets Premium and arrived at much the same conclusion regarding the str ength of the business. Although we don't see much Pepsi in South Africa, the drink is big globally and the company is exceptionally strong in the chips and snacks aisle.

For Trive's view on this group, including technical and fundamental analysis, read this article>>>

Do you believe in life after REIT?

If the Cher reference just went over your head, then we grew up in slightly different eras. It is what it is.

At one point, Fortress and its management team thought that the music was stopping for the group. Being the first property fund to lose REIT status isn't an accolade that anyone wanted, yet the end result hasn't been nearly as bad as many feared. At the time, I wrote about how the capital flexibility of non-REIT status might not be the worst thing in this environment. Although I have concerns about the yields on the logistics properties, that's an issue that is distinct from REIT status.

As interesting as the Fortress update was, I think Invicta probably stole the show yesterday. The industrials group is performing very nicely in this environment, with solid returns across the divisions. Although cash conversion in working capital doesn't look amazing vs. the prior year, the overall business is enjoying an inflationary environment.

In addition to these updates, look out for news from Crookes Brothers, Mantengu Mining, Nedbank, PPC, Primeserv, RAC and Renergen. You just need one click to go to Ghost Bites to get all these details>>>

Resistance is not futile

The rand tried and failed to break the R18.55 level no fewer than three times yesterday. According to TreasuryONE, this means that R18.55 is a strong level of resistance that the rand will need to overcome before it can test the levels seen last week. With recessionary fears remaining in the market, a general risk-off sentiment has pulled the handbrake on significant moves in emerging markets.

It was a fairly quiet day otherwise, with the markets looking ahead to speeches by ECB President Christine Lag arde and Fed Chair Jerome Powell later this week. After such a chaotic weekend of newsflow though, all eyes are probably on Russia rather than central bankers this week.

With that, I wish you a productive Tuesday!

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