| Wednesday 26 January 2022 Good morning Voornaam,
ArcelorMittal jumped 16% yesterday after releasing a monster trading statement. HEPS for the year ended December 2021 is expected to swing from a R1.90 loss per share to a profit of between R6.00 and R6.30 per share. With a share price of R10.52 at close of trade, the business is trading like a cyclical company at the very top of its cycle. The share price has increased...wait for it...685% in the past year!
As I frequently write in InceConnect, some director dealings announcements are far more important than others. PPC shareholders should note that Value Capital Partners (VCP), a strategic investor since August 2017, has reduced its stake in the company to the tune of over R215 million. This comes through as a director dealings announcement because VCP has representation on the board.
Although there was a 6.7% sell-off in PPC yesterday, shareholders should note that VCP still holds a 13.75% stake in the business. The rationale for the sale is that PPC had become a disproportionately large exposure for VCP, so it needed to be trimmed as part of the overall asset allocation strategy. This makes sense to me.
The unwinding of the relationship between Dis-Chem and its founders has taken another important step. Dis-Chem is acquiring its distribution centres from the Saltzman family and related business associates. The total net asset value of the properties is R249 million. BDO has already provided an independent expert opinion that the deal is fair to Dis-Chem shareholders.
Sasol investors should note that the company has released its production and sales metrics for the six months ended December 2021. The period has been characterised by higher crude oil prices and margins across its products, combined with increased demand as the pandemic has subsided. The blemish has been the coal operations in Secunda, which has fa ced challenges in coal availability and quality. There are some downward revisions of forecasts in the update. Regardless, the share price closed 3.7% higher.
Reinet Investments has now released its net asset value (NAV) per share, which has come in at EUR27.98 at 31 December, up 7.5% in 12 months. In rand terms, this is a NAV per share of R482. The current share price of R292 reflects a discount to NAV of just under 40%, which is on the high side for a JSE-listed investment holding company.
Speaking of investment holding companies, Sabvest Capital has committed shareholder loan funding of R199 million and financial guarantees of R24.5 million to a subsidiary of Masimong Group Holdings. Sabvest holds 10% of the group company and now also holds a 49.9% equity interest in the subsidiary, obtained for a nominal amount. This entity has been set up to execute industrial and service investments. The value of financial com mitments represents 9.2% of Sabvest's market cap. Shareholders will look forward to further details on potential acquisitions by this entity.
Trencor climbed over 4.5% on the news that the company has swung from a net loss to break-even or at least very close. The headline loss per share for the year to December 2021 will be between 0 and 2 cents vs. a loss of 22 cents the prior year.
Technology small cap PBT Group is the latest company to take advantage of a free listing on A2X, a secondary listing venue for companies with a primary listing on another exchange (like the JSE). A2X is splitting the primary listing economics (issuer regulation in exchange for various fees) from secondary listing economics (trading systems and associated fees). PBT Group is a small cap that generally behaves like a big cap in conducting its affairs, so I'm not surprised to see this.
In today's feature articles, I take a look at important trading updates from Motus (with hints of an interim dividend), Cashbuild (an update the market didn't like) and AVI which is gently trading sideways.
The markets have been wild the past few days. If you're looking for investment returns that are uncorrelated with the market, Westbrooke Alternative Asset Management has a number of alternative investment products ranging from private equity to venture capital. In the latest episode of Magic Markets, we unpacked an overview of the business and why uncorrelated returns are so helpful. Listen to the show here.
Have a great day!
The Finance Ghost
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Local and Offshore Market News |
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| | | Cashbuild cools off Cashbuild has reported a significant drop in volumes, driven partly by delays in reopening stores after the riots. Read More |
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