| Good morning Voornaam, With record highs on the JSE, the rand sitting below R18 to the dollar and the sun shining - in some parts of the country at least, not in Cape Town - it feels like a great time to be South African. Of course, if we went back 10 years to when the rand was just above R10 to the dollar and told people that we would be thrilled to be under R18, they would've been shocked. So shocked, in fact, that they might have called a press release and formed a committee to investigate this. Isn't that what we do around here?
The markets, like most things in life, are about expectations vs. reality. When you are grateful in your life (as opposed to just #grateful on that irritating place LinkedIn), it's because you have managed your expectations vs. your reality. When share prices move sharply, it's because there was a surprise of some kind vs. what the market expected.
Sasol closed 6.5% lower yesterday after releasing numbers. It's probably because there was no final dividend, with the group electing to change its dividend policy going forward. The prerequisite for a dividend is now whether they are below a certain debt threshold - and they aren't. The second change to the policy is that dividends will be based on free cash flow, not HEPS. When investors were expecting a dividend, this is the expectation gap that I'm talking about. Sasol places importance on the Ghost Mail investor community, so the company has placed its results on the platform here.
Of course, I've written about Sasol in Ghost Bites as I always do, along with the latest from Accelerate Property Fund and NEPI Rockcastle. When it comes to underlying retail mall performance, those funds are literally at the opposite ends of the spectrum. Get what you need about these companies and more in Ghost Bites at this link>>>
I'm also very happy to share a new Ghost Wrap podcast with you. I decided to cover Absa and Standard Bank, as the contrast between the two is interesting. I also covered MTN, as the African earnings pressure in the banks is much more severe at the telcos giant. I finished off with NEPI Rockcastle. Thanks to Forvis Mazars, you can enjoy it here>>>
Have a great Wednesday! |
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| FEATURED: The Trader's Handbook Ep 4 |
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| | | IG Markets Episode 4: The markets are as varied as they are beautiful, so it's no surprise that there are various different trading strategies available. Get an overview of the approaches taken by traders in the latest episode at this link>>> |
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| FEATURED: How to Research Stocks |
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| Magic Markets: Everyone talks about researching stocks and the importance of research, but how do you actually go about doing it? In the latest Magic Markets podcast, we talk about our approach to research. Read it here>>> |
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| FEATURED: Unlocking the true value of TFSAs for South Africans |
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| | | Satrix: In an article that I could not agree with more, Duma Mxenge talks about the importance of tax-free savings accounts and why they could be rebranded to make it clearer that this should be the cornerstone of an investment journey. Get his views in this excellent article>>> |
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| FEATURED: The rise of self-directed investing |
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| Investec Podcast: As part of the Investec No Ordinary Wednesday series, you can enjoy Jeremy Maggs in conversation with Tinus Rautenbach, head of Investec's online platform Clarity, as they discuss the rise of self-directed investing. Find it here>>> |
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| Ghost Bites: The latest on Accelerate Property Fund, NEPI Rockcastle and Sasol, along with various Little Bites in Ghost Bites here>>> |
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| | | Ghost Wrap: With thanks to Forvis Mazars, this podcast brings you the latest on Absa vs. Standard Bank, MTN and NEPI Rockcastle, all in just a few minutes in the Ghost Wrap podcast. |
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| Unlock the Stock: In the latest session, Tharisa Plc returned to the platform for an update on the company performance and strategy going forward in PGMs and chrome. You can watch the recording here>>> |
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| Nico Katzke of Satrix: The GNU has driven significant optimism around the South African market. To help us understand where this is playing out and how the carry trade protects the rand, Nico Katzke joined me on Ghost Stories. Find it here>>> |
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| Magic Markets: What is the right way to prepare for a major sell-down in the market, or even a crash? It's all about research and watchlists, as well as having money that is ready to go into those dips. We discuss these concepts in this podcast>>> |
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| International Business Snippet: |
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| The home improvement sector is always an interesting one to watch. The dynamics in a place like the US aren't directly comparable to here, so I would be cautious of taking the trends at the likes of Lowe's and applying them to Italtile or Cashbuild.
Still, I've taken note that Lowe's has cut its full-year forecast, with projections for weaker home improvement spending in the second half of the year. They are expecting comparable sales to fall by 3.5% to 4% vs. the previous forecast of a decline of 2% to 3%. Of course, they may well be sending a message to the Fed to cut rates, which would do wonders for the spending power of Lowe's customers.
We are covering Walmart in Magic Markets Premium this week. For subscribers to Magic Markets Premium, the investment of R99/month is the best investment they can make. |
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| IG Morning Call: daily macroeconomic update |
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| Global benchmarks appear to have paused their recent rally near short term highs, ahead of some key data releases out of the US. This evening sees minutes from the last Federal Open Market Committee (FOMC) meeting, while on Friday we await central bank addresses at the Jackson Hole Symposium.
The dollar index was lower overnight mainly due to strength in the Japanese yen and Swiss franc. The rand has however weakened marginally off its best levels of the year ahead of local CPI inflation data scheduled for release this morning.
The JSE All-Share Index is expected to open flat this morning in line with global markets.
Oil prices have continued to track lower since news that Israel has agreed to discuss issues blocking a ceasefire deal in Gaza.
Gold is flat this morning after trading to new high territory yesterday as it continues its inverse correlation to the US dollar.
Key Indicators: USD/ZAR R17.82/$ | US 10yr 3.80% | Gold $2,515/oz | Platinum $952/oz | Brent Crude $76.61
The macroeconomic update is based on IG's morning call update |
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