| A common theme emerging from the current reporting season is the number companies benefitting from geographical diversification due to the weak state of the local economy. Of course, there are a number of cases where it has backfired spectacularly, particularly in the retail sector. For the banking, communications and property sectors, however, offshore expansion appears to have paid off. MTN, Absa and Growthpoint all reported results yesterday and all three have been cushioned by stronger growth outside SA than at home. While the market initially welcomed MTN's annual results, its shares turned around to close lower. The network operator also announced that CEO Rob Shuter wouldn't renew his contract when it expires next year - partly due to the onerous task of managing a company with operations across the continent and into the Middle East. Absa's shares rose on the back of its full-year numbers, recovering some of this year's steep losses. It's not alone: all banks have been pummelled on the JSE over the past few days and have also fallen year-to-date. Since the beginning of January, Absa has declined by close to 20%, Nedbank by 30% and Standard Bank and FirstRand are both down by around 15%. While the latest sell-off in world markets has affected the JSE, there are particular reasons to be especially cautious of South African banks. At the beginning of January, in "Saxo's electrifying message", Ingham Analytics gave forewarning - and that note remains as riveting now, one of the most popular based on downloads. Now, in "2020 budget - backdrop to an outrageous prediction" Ingham Analytics has a chilling analysis of the negative implications for capital markets and bank shares. Follow this link to access the report. Also in your newsletter today, Ascendis Health is pulling out all the stops in its attempts to reduce its debt and Pepkor says it may face a stock shortage later this year due to the impact the coronavirus has had on Chinese factories and supply chains. Finally, if you received shares in UK wealth manager Quilter when it was unbundled by Old Mutual in 2018, you may be affected by an odd-lot offer that will see it repurchasing shares from investors who hold fewer than 100. Read on for more. I hope you have a good day. Stephen Gunnion Managing Editor, InceConnect
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