Renergen keeps sliding

Good morning Voornaam,

Today is another day where we don't need a full Ghost Bites article. Instead, I'll give you exactly what you need in the body of this mailer. SENS will no doubt pick up again from today!
The news worth talking about on Friday was from Renergen, where the share price looks like it desperately needs an injection of helium to keep it afloat - literally. Sadly, things at Renergen have taken a long time to get going and there have been many wobblies along the way. Normally, it's well-understood that junior mining houses are risky things that need a lot of patience and a strong stomach. I think that the difference with Renergen is that so many retail investors bought into the dream (and the extensive PR campaigns) during the pandemic, which means the share register is full of people who frankly should never have been there as they didn't understand what they were buying.
For some reason, it also seems as though CEO Stefano Marani has some enemies in the media space. I must say that some publications do seem to use Renergen hit pieces as their go-to content on a quiet news day. Unfortunately, the only cure for this is to sweep away the naysayers by delivering on promises. There's just no other way!
On Friday, Renergen released an "announcement regarding share price volatility" - never a good thing to see. Then again, with the share price already down 35% in the space of just a few trading days this year, they are panicking. What didn't help at all was an announcement late in December about the lack of availability of helium containers, putting yet another risk on the table for the business. As is the standard approach in Renergen announcements, the latest such example goes into great detail in reminding the market how difficult helium is to work with and how unpredictable it can be.
Naturally, this doesn't do much to quell fears in the market or stop the slide. In fact, such is the level of concern out there that Renergen explicitly says at the end of the announcement that they have not entered any business rescue discussions!
When you add all this to the pending court action with Springbok Solar, the risks seem to be through the roof and the share price is falling through the floor. I don't have a position in Renergen and I've never held a position in Renergen, as I don't pretend to understand junior mining well enough to have any investments in that sector. I just wish that more investors had understood the risk profile that they were buying into. Alas, many attempts to make that point fell on deaf ears. When the price is climbing, people don't want to hear about the risks.
In news of director dealings from Friday, we saw major on-market dealings at Finbond in which Sean Riskowitz and his associates bought over R4.3 million worth of shares. It appears likely that they were acquired from another director who sold a fairly similar value of shares on the same day. We also saw the Chief Investment Officer of Assura buy shares worth £39k and a director of a major subsidiary of PBT Group buy shares worth R786k.
Moving on, the first Magic Markets episode for the year includes a discussion on the market trends coming into 2025, as well as a sobering discussion on the JSE's performance in 2024 in the context of global markets. There's also some fascinating stuff in there about China and how the geopolitical landscape is playing out. The podcast and transcript are available here>>>

For the qualifying entrepreneurs among you, remember that MIC Khulisani Ventures is looking to provide capital to businesses that are ready to aggressively grow. Applications need to be in by the end of January, with capital expected to flow by March. To fully understand the opportunity, be sure to listen to this podcast>>>
And finally, Dominique Olivier has written a terrific piece this week on the story of DeLorean. Believe me, the car being featured as a time travel machine in Back to the Future isn't even close to the most interesting thing about this company and the founder. From fairy curses to cocaine busts and sneaky accounts in Panama, it's all a bit wild. Find it here>>>
Have a great day!

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International Business Snippet:

Walgreens had a really strong end to last week, with earnings that were ahead of expectations. This sent the share price up nearly 30%, as turnaround stories that show promise are richly rewarded. Those who have followed our Nike research in Magic Markets Premium will know that this type of market behaviour is firmly part of the bull case there as well. Walgreens may be a pharmacy retailer rather than a seller of apparel, but the principles remain the same.
Speaking of Premium, we've decided to cover Walgreens this week to see what the key drivers of the turnaround are and whether there are still decent risk-adjusted gains to be made.
Taiwan Semiconductor Manufacturing Company (commonly called TSMC) achieved record revenue in 2024. You guessed it - AI is the reason, with the world's largest chip manufacturer firmly on the right side of that. They also happen to have some of the largest geopolitical risks in the world given China's constant shadow over Taiwan, so be aware of that.
Magic Markets Premium got 2025 going with Nike, as we are now the closest we've been to taking a long position in the company. Under new CEO Elliott Hill, Nike looks set to get back to its core DNA. There's vast competition in this market, so will that be enough? And is the valuation really cheap enough yet? Subscribers find out this week.

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Macroeconomic indicators

A strong jobs print out of the US on Friday has added to concerns around high borrowing costs and the pace of easing in the world’s largest economy. The resultant effect has been a stronger dollar, higher yields and weakness in equity markets.
Global equity markets have followed suit and in turn we are expecting a softer start for our local bourse the JSE All-Share Index. The rand has softened further in risk-off trade.
There is no high impact data scheduled today, although US CPI inflation data on Wednesday is likely to be a major catalyst for near-term direction.
Oil prices have continued to gain on the suggestion of more US sanctions on Russian exports of the commodity.
Gold prices are slightly lower on the day, although have held up quite well considering US dollar strength, perhaps finding a bid from risk-off trade amidst Trump policy uncertainty.
Key Indicators: USD/ZAR R19.15/$ | US 10yr 4.76% | Gold $2,684/oz | Platinum $964.00/oz | Brent Crude $80.60
As often as practically possible, insights from the IG Markets morning macro update by Shaun Murison will be featured here. Where this isn't possible, only indicators will be provided. If you want to learn more about trading, refer back to The Trader's Handbook, a podcast series that takes you through many of the important principles in trading.