Vodacom's pyramid scheme

Good morning Voornaam,

Local company news:

Vodacom is finding it difficult to achieving meaningful growth in South Africa, an economy that even Ronwen Williams would find tough to save. We might manage to overachieve on the sports field on a regular basis (with Bafana Bafana as the 2024 achievement that nobody had on their bingo cards), but the economic facts are the facts. They aren't pretty.
This has driven our telcos into their own version of AFCON for years now, seeking opportunity in African countries with much faster growth than ours. For a telco to achieve anything, it needs (1) more people and (2) more activity. This is because they are on a constant treadmill of the products becoming cheaper. I don't know about you, but I spend less on my Vodacom phone contract today than 10 years ago - and that's without adjusting for inflation.
As the latest results in Ghost Bites show, the recent acquisition in Egypt does seem to be a bright spot of growth. This is a pyramid scheme that the market can get behind! Goodness knows Vodacom needs to inject some love into a share price that has lost 24% in the past 12 months. The market sees it as a low growth cash cow (dividend yield 6.8%), so any efforts to change that could pay off. For now though, the SA story is still too hard for me.
Sanlam has been keeping its M&A team extremely busy lately. There's a small deal in Morocco but that's just a sideshow to yesterday's main event: the potential acquisition of Assupol. It's hard to see how the deal won't be approved by Assupol shareholders, as this is a most welcome liquidity event at a juicy premium to the last traded price. Such is the problem of companies trading at a discount that Sanlam will still be getting it below embedded value despite paying a premium.
Also look out for news from British American Tobacco, MC Mining and Pan African Resources, all available 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>>>
In news from Satrix, the ETF giant has launched the Satrix JSE Global Equity ETF. In this article featuring commentary from Chief Investment Officer Kingsley Williams, Satrix explains how this product will have a higher weighting towards companies that have their primary listings offshore.
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>>>
Brace yourself: Meta has officially initiated a quarterly dividend! After the market had written off Zuckerberg's tech giant out of fear that he had lost his marbles once and for all, those who took the risk have been handsomely rewarded.
Some of this has been helped by general market sentiment (and a clever PR pivot of "Metaverse" into "AI" in every company communication). A lot of it is thanks to initiatives around the numbers, with revenue up 25% in Q4 and costs down 8% over the same period. You don't need to be a maths genius to know what that combination does for profitability.
Meta's share price is up a ridiculous 155% over the past 12 months. The jury is still out on whether Zuckerberg will still take us to the Metaverse. There is no debate on whether he has taken shareholders to the moon.
Have a great day!

READ: Satrix launches Satrix JSE Global Equity ETF

Currencies, commodities and rates: TreasuryONE Market Update

In a major surprise on Friday, US non-farm payroll data showed 353,000 new jobs vs. an expected 180,000. The unemployment rate stayed at 3.7% despite expectations of it moving to 3.8%. Other labour data told a very different story in the build up to this release, so the dollar really got the wind in its sails from this.
On top of this, average hourly earnings increased 0.6% vs. expected 0.3%. All of this points to continued inflationary pressures in the US, adding support to Fed Chair Jerome Powell's comments that the Fed might not cut rates as soon as the market would like.
The rand is at R18.94 this morning, the US 10-year yield moved back above 4% and gold is at $2,031. Despite the rand weakness, platinum ZAR is still below R17,000.
Looking ahead to this week, there isn't much in the way of data due to be released in the US. The next big event is the US CPI print for January, due on 13th February.
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>>>

LISTEN: Magic Markets podcast

READ: Why are we losing our minds over Stanley cups?
(by Dominique Olivier)

LISTEN: What to do with those festive savings
with Siyabulela Nomoyi of Satrix