Spar somehow got worse

Good morning Voornaam,

Fresh out the oven:

Ghost Bites: Spar has managed to go backwards again, despite all the troubles at Pick n Pay and the slowdown in load shedding in early 2024. MultiChoice is struggling with the naira and Showmax start-up costs. Copper 360 has a lot of excuses about its revenue. And finally, Gemfields has a gold project you might not know about. This is all in Ghost Bites>>>

There is only one free lunch in investing, as this great new Ghost Stories episode with Kingsley Williams shows. Kingsley brought his wealth of experience in the markets to a great conversation about investing in general. Brought to you by Satrix, you can enjoy it here>>>

DealMakers is back this week, with summaries on local M&A, local corporate finance and deals in Africa. They've also published pieces on infrastructure investment in South Africa and the rise of AI investment on the broader African continent.

Fedgroup thinks differently about portfolio construction and how important elements like yield and inflation protection can be brought in. Michael Field joined me to discuss their approach, including being one of the largest beekeepers in the country. Podcast and transcript available here>>>

In Magic Markets, we went back to our roots and covered local topics around the rand, South African bond yields and the state of play for South African consumers. Are we facing coalition politics, or collision politics? The podcast and full transcript are available at this link>>>

We are about to enter a busy period for Unlock the Stock. The next event features Oceana, with management ready to engage with you at 12pm on 13 June. You simply need to register here>>>

In case you missed it:

This year, SA is set to become the tenth-largest solar market in the world. In episode 4 of The Current brought to you by Investec, Iman Rappetti spoke with Investec's Melanie Humphries, Bernard Geldenhuys and De Wet Taljaard from the South African Photovoltaic Industry Association (SAPVIA) to explore SA’s apparent solar boom. Enjoy it here>>>

Over in Paris, the locals are planning a rather revolting protest against upcoming Olympics, Even that isn't the weirdest story to come from this event that is steeped in history. That honour surely goes to the Men's Marathon at the 1904 Olympics, with enough characters to justify an entire TV series. Dominique Olivier entertains you with this story here>>>

​Ghost Wrap: Enjoy a brand new episode covering Balwin, Quantum Foods, De Beers, Tiger Brands and Bidcorp, brought to you by Mazars. Listen to it here>>>​

The only free lunch in investing

Local company news:

Spar just can't get it right. The company should be feasting off Pick n Pay's troubles, yet here we are with earnings having gone backwards for the six months to March - and Poland isn't the reason, as that's now a discontinued operation. One of the reasons is that the disastrous SAP implementation at the KZN distribution centre still isn't sorted.
Over at MultiChoice, profitability is a thriller that is starting to look more like a horror. At least the investment in Showmax is a good reason for this, as streaming losses in the initial years are a well-trodden path globally. The Nigerian naira is a bigger issue. Canal+ is willing to play the long game here and if I was a shareholder, I would happily accept their offer to take MultiChoice off my hands. The combination of streaming and volatile African currencies is no joke.
Copper 360 rounds out our trio of disappointments today, with much effort put into explaining why they missed revenue forecasts by a country mile. Things will hopefully improve going forward.
And finally, Gemfields has a gold project in Mozambique that they are spending a bit of money on.
These stories are all covered in detail in Ghost Bites at this link>>>

Olympic fever and other ailments

Ghost Wrap: Balwin | Quantum | De Beers | Tiger Brands | Bidcorp

International business news:

There's a pretty interesting article on CNBC about how Walmart has turned Bentonville, Arkansas into a "boomtown" - surely aided by the company's recent decision to ask remote workers to move to the home office. If you're curious about how small towns become big towns around a specific employer, this is for you.
And perhaps retail isn't such a bad option, with a recent report suggesting that the tech sector lost the most jobs of any sector in the first quarter of 2024. Headlines suggest another round of job cuts at Microsoft and Alphabet in recent days. Oddly, it seems to focus on Google Cloud (a growth area) at Alphabet and on Azure and HoloLens (also growth areas) at Microsoft.
We just covered Foot Locker in Magic Markets Premium and next week we will be covering Lululemon. To get access to this research and the rest of the vast library, subscribe to the platform here.

Macroeconomic Update

The ANC NEC has decided to proceed with a Government of National Unity. The rand is still cautious though, as there isn't much clarity yet on what this will mean and which parties will be involved. Some large export orders kept the rand just under R19.00.
Markets are quiet in general this morning in anticipation of today's non-farm payroll unemployment numbers.
The ECB cut interest rates by 25 basis points as expected yesterday, but has lifted its inflation outlook which could delay further cuts until later in the year.
Gold has rallied on rate cut hopes. Brent Crude has regained the $80 level after Saudi Arabia and Russia gave assurances that current production cut agreements would be adhered to and possibly even increased.
Key indicators: USD/ZAR R18.89; US 10-year 4.30%; Gold $2,386; Platinum ZAR R19,073; Brent Crude $80.06
This macroeconomic update is based on TreasuryONE's morning update.