Good morning Voornaam, Despite regulations that prevent Canal+ from having voting control, the French group wants all of MultiChoice. Hudaco is a lesson in B2C vs. B2B margins. Ferrari, Lewis Hamilton and correlation vs. causation. TreasuryONE on the recent pressures on the US dollar. Recap the clothing retailer updates (The Foschini Group | Mr Price | Truworths | Pepkor) in the Ghost Wrap podcast>>> Magic Markets brings you the latest on Tesla and Volkswagen in this podcast>>> Local company news:
MultiChoice has been struggling. The African business is more cash hungry than a baby in nappies and the local business has suffered an onslaught of streaming competitors, with SuperSport trying hard to keep DStv Premium afloat. There were many reasons to have a short position (betting on the share price continuing to drop), even with Canal+ having been buying up a strategic minority stake. You see, there are laws that prevent a foreign company from controlling a local broadcaster. It doesn't make a lot of sense for a company to invest in only the economic rights of the shares, without the ability to control the business. Canal+ had already moved past that threshold of economic vs. voting percentage, but I wasn't expecting the company to go the whole way. We now know that Canal+ is making an offer to all MultiChoice shareholders at R105 per share, but implementation is going to take a while I think. This is why the share price closed at R94.95, leaving some space for the time value of money and the deal risk involved. A 26.6% jump in the share price was a catastrophe for anyone with a short position. I suspect that a few people learnt some new French swearwords yesterday. Also in Ghost Bites today, you'll find an earnings update from Hudaco. The consumer side of the business has been struggling with margins, as is typical in a B2C operation in tough times. Thankfully, the more engineering focused side of the group (which is a B2B model) has gone the other way, demonstrating pricing power. The net result? A double digit increase in the dividend. Nice. Other news includes a production update from Glencore and numbers from MiX Telematics. Get everything you need to know on MultiChoice, Hudaco, Glencore, Mix Telematics and more in Ghost Bites>>> Also be sure to add the Ghost Wrap podcast to your weekly listening regime. This week, you need only five minutes to recap the clothing retailer updates: The Foschini Group, Mr Price, Truworths and Pepkor. This podcast is designed for busy people just like you, with thanks to Mazars. You'll find it here>>> Although the Stanley cup craze doesn't seem to have found South Africa yet, it probably will. In Dominique Olivier's latest example of business storytelling, she explains how and why people are losing their minds over Stanley cups. This is the exact same behaviour that we see playing out in the stock market over and over again. Prepare yourself for the hype here>>> International company news: Thanks to data and automation specialists B2IT, Magic Markets moves from shoes to cars this week. We tackled the latest earnings from Tesla (always an exciting story, let's face it) as well as how Volkswagen is doing a traditional stalwart in this tough industry. As always, there's much to learn about both companies in this podcast>>> The news broke yesterday that Lewis Hamilton will be driving for Ferrari in 2025. I promise that I'm not lying when I say that I called this move among my friends group - I just wasn't sure of the timing. To me, it was clear that Ferrari is the only team that can possibly afford him. Hamilton is a big brand and that's all that Ferrari really cares about. If Lewis was ever going to move on from Mercedes, it was going to have to be to Maranello. Lewis fans got a bit ahead of themselves though, pointing to the Ferrari share price closing 9.2% higher on the day. As good as Hamilton's track record is (literally), I think this is a classic case of correlation vs. causation. You see, on the very same day, Ferrari released results that capped off a record year of profits. Better yet, the company has guided that 2024 will be another record year, with adjusted EBIT margin of at least 38%. Ferrari is one of the very best luxury brands in the world. The fact that they make cars is almost besides the point. Correlation? Hamilton and the share price. Causation? Earnings and the share price. That's my view, at least. Have a great day! |
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READ: Why are we losing our minds over Stanley cups? (by Dominique Olivier) |
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You’ve heard of an emotional support animal, sure. But why are people all around North America suddenly talking about an “emotional support water bottle”? Is the Stanley cup really the last word in personal hydration – or is this just a sippy cup for adults? Dominique Olivier investigates. |
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Currencies, commodities and rates: TreasuryONE Market Update The Bank of England has kept interest rates on hold, while banks worldwide are navigating a challenging landscape marked by policy pivots and mixed signals about future monetary policy decisions. The BOE's decision was a split vote that hinted at both rates and cuts, which is a more flexible approach than the decisive action we saw from the Federal Reserve last year. A more balanced approach may prove to be a wise decision, avoiding the pitfalls of markets latching onto one direction or the other. The rand has been helped by US data that has pointed towards disinflation. US Q4 2023 numbers and initial jobless claims both contributed to downward pressure on the US dollar, with all eyes on non-farm payrolls today. The rand is at R18.56 this morning, which is stronger than we've seen in a while. Gold is at $2,054, platinum ZAR has dropped below R17,000 and Brent Crude is at $79 a barrel. As a Ghost Mail reader, you have a wonderful early bird opportunity to register for the 2024 post-budget panel discussion hosted by TreasuryONE, Econometrix and ETM Analytics. I absolutely cannot recommend this enough and I will also be attending to learn from the panel. Get it in your diaries now already by registering at this link>>> |
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LISTEN: Magic Markets podcast |
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In Episode 160 of Magic Markets, we put on our driving shoes and got behind the wheels of Tesla and Volkswagen. This is new-age vs. tradition in the world of automotive manufacturing, which is a tough place to make money on a good day. What can we learn from recent earnings updates and the share price trends? Find out in this podcast, brought to you by international data and automation specialists B2IT. |
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LISTEN: What to do with those festive savings with Siyabulela Nomoyi of Satrix |
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| Saving and investing over December - January isn't easy. To keep you inspired, Siya joined me to cover a wide range of ETF topics - along with some tips of how to keep those goals going over this period of endless spending! |
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READ: Letter from the Editor - from Cape to Clarens |
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| A roadtrip across South Africa is always a treat. Of course, it's also a way to see what is really going on out there. I wrote about my experience from Cape Town to Clarens (and back again!) |
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Disclaimer Our content is intended to be used and must be used for informational purposes only. You must do your own analysis before executing any investments or strategic decisions, based on your own circumstances. We do not provide personalised recommendations or views as to whether an investment approach or corporate strategy is suited to the needs of a specific individual or entity. You should take independent financial advice from a suitably qualified individual who gives due regard to your personal circumstances. Whilst every care is taken, we accept no responsibility or liability for any errors or omissions in any of our content. The views, thoughts and opinions expressed in our content belong solely to the author or quoted individuals and/or entities, and not necessarily to the author's employer, organisation, committee or other group or individual, or any of our affiliates or brand partners. |
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