My MTN trade worked

Good Morning Voornaam,

Timing the market is hard. If you're a trader, you need to eat what you kill and the pressure is huge. As an investor, I'm just trying to optimise the timing of my entry points in an effort to improve my long-term returns. It's rare for me to engage in swing trading (holding a position for only a few weeks or months) and I don't do any intraday trading.

MTN looked like a sitting duck to me and I wrote about it previously in Ghost Mail. As each of the African subsidiaries released great results, the share price just didn't budge. Even a trading statement from the group company was largely ignored. After doing some fairly basic modelling, a fair value of up to R200 per share looked believable to me. Before releasing its results yesterday, MTN was trading at around R146 per share.

I have become really bullish on MTN's growth story. I can see how distribution of products an d services via smartphones can be highly effective in Africa. I'm certainly not blind to the risks of operating in territories like Nigeria, though I would point out that MTN has significantly derisked its business in the past couple of years.

The share price closed 9% higher yesterday based on the release of interim results. There wasn't even an interim dividend, though MTN did give guidance for a full year dividend.

I'm certainly in no hurry to sell my MTN exposure. It's just a great feeling when a position works the way I hoped it would. Like everyone else, I've had many that haven't.

In addition to the MTN update, there were earnings updates from the likes of Bidcorp, ADvTECH, Italtile and Old Mutual. There was also a really poor example of corporate governance, with data network rain ignoring the Takeover Regulation Panel's directive not to announce its intention to approach the board of Telkom for a merg er. Another critical update came from Sibanye-Stillwater, with a new operational plan released for the US operations in response to shifts in the palladium market. There's a LOT to read today, so head on over to Ghost Bites and get stuck in!

Podcasts

Daily market wrap with TreasuryONE

After this week's lower-than-expected CPI print, the dollar was placed under further pressure with the release of the July PPI number in the US. Producer prices fell 0.5% in July from a month earlier. The rand flirted with the R16.10 level in afternoon trade but returned above R16.20 by the close.

Gold bounced after the inflation print missed the mark (once again confirming that I don't understand this metal AT ALL) and copper was on the front foot as output rose in China. Palladium and platinum both gained around 2% on the day. Brent Crude erased losses from earlier in the week, trading just below the $98 mark.

DealMakers weekly summaries

The team at DealMakers have prepared their usual weekly summaries of M&A activity, corporate finance activity in South Africa and deals in Africa. This week's edition of Thorts is a particularly interesting piece on lessons learnt from Covid in the context of legal clauses found in dealmaking.

With that, I wish you an excellent weekend!