| Thursday 09 September 2021 Good morning Voornaam, There are two types of people in this world: those who have read Steinhoff SENS announcements and felt confused, and those who will still read the announcements and feel confused.
Unless you are a legal expert, it's very difficult to know what is going on there. It's like a legal drama without any of the juicy love triangles or surprising new characters. Instead, we have "Dutch SoP" this and "Composition Plan" that. All I know is that judges voted in favour of something overseas and the share price climbed 3.8%. That's great, but the key thing to watch is the liquidation proceedings in the Western Cape High Court. It's rather interesting to note that Allan Gray has moved through the 5% mark in Pick n Pay. The retailer's share price is up around 15% this year, miles off Shoprite's climb of 40%. Perhaps that is exactly why Allan Gray is buying, as Shoprite's share price has had a serious run already. The buzz yesterday wasn't over Steinhoff, Pick n Pay or the companies releasing results. Instead, everyone was talking about the FSCA's decision to fine Viceroy R50m for making false and misleading statements about Capitec. This sent shockwaves through the market, although I must be honest that I thought the Viceroy report on Capitec was embarrassingly poor. If it wasn't for their prior success in uncovering the mess at Steinhoff, that Capitec report would've been laughed out the building at the time. Instead, its release sent the share price crashing and could've caused panic over a bank that is systemic to the South African financial system. There are many complex issues here. Short selling must be allowed and in my view is no different to having a bullish view and publishing research to support that view. Where Viceroy went wrong is making really damaging claims that couldn't be substantiated. Capitec's valuation is expensive. I certainly wouldn't buy it, but I've missed out on many gains as a result. There's a massive difference between a stock being expensive and a company being a fraud. Viceroy accused Capitec of the latter, rather than focusing on the former. In doing so, Viceroy banked serious profits. The bigger question is whether the fine will ever be paid. I'm not clear at all how the FSCA actually enforces this fine. Today's feature articles are on Libstar's poor results and York Timber's trading statement. There's also part two of an interview with ESG expert Juana Purchase Hatfield and a daily forex update from Currency Assist. Good luck in the markets today and don't make any silly and unsubstantiated claims of fraud against listed companies - the FSCA will find you and fine you! The Finance Ghost
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