| Monday 25 October 2021 Good morning Voornaam,
Last week saw plenty of volatility en route to the JSE All Share Index finishing up more or less where it started! The volatility award must go to Wesizwe Platinum though, which entered the week on R0.84 per share and finished at R1.57 after a closing high of R1.97 on Tuesday.
You need a strong stomach to play around in those types of shares, that's for sure.
A mining company that cemented its gains was Merafe, up strongly last week and capping it off with a production report for the nine months to September. Merafe's asset is the Glencore Merafe Chrome Venture and production for this period is up 64.6% vs. the comparative period last year. The company attributes this to lower Covid-19 restrictions and improved plant efficiencies. It was enough to drive the share price up 4.6% on Friday.
Moving on to pharma, Aspen has agreed to sell a portfolio of six products for R1.8 billion to Swiss company Acino Pharma AG. The products generated revenue of R512 million in South Africa in the year ended June 2021. There is also a manufacturing and supply agreement in which Aspen will supply these products to Acino for a period of seven years. The proceeds of the transaction will be used to reduce Aspen's debt.
Naturally, Ascendis shareholders were quick to point to this deal on Twitter as an example of what pharmaceutical assets can be worth (in this case 3.5x revenue). The major news for that company is that CEO Mark Sardi has resigned with effect from 31 December.
As an ex-investment banker, Sardi joined the group to navigate the balance sheet crisis and try to find a way to emerge with part of the business intact. To his credit, the announcement highlights that leverage was reduced by R7.5 billion over this period in a complex debt for assets swap transaction and total normalised EBITDA grew 32% per annum. The share price increased 2.7% on Friday despite this news, so the market seems comfortable that Sardi has done the job he was brought in to do and isn't critical to the story going forward.
Sticking with healthcare, Netcare released a fascinating voluntary trading update that gives excellent insights into the impact that the pandemic had on hospital groups. There are some scary stats in there about the impact on our mental health as well.
My other feature is on Bell, where we finally have some clarity over the offer being made by the controlling family to try and take the business private. At just R10 per share, it's not an offer that the market seems to be taking seriously.
In the latest episode of Magic Markets, the team at Future Forex joins us to discuss the latest crypto regulations and their product improvements in crypto arbitrage. This is an intriguing way to bring a different source of returns into your portfolio, especially since you don't even have to like crypto as an asset. Arbitrage is about taking advantage of pricing inefficiencies and (literally) making a quick buck.
As is customary on a Monday, Chris Gilmour updates us on the macroeconomic and political news that is moving markets worldwide.
Ready for Monday yet? Of course you are, you're an InceConnect reader! Get out there and make it happen.
The Finance Ghost
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Local and Offshore Market News |
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