Woolworths falters

Good morning Voornaam,

Fresh out the oven:

Ghost Bites: Woolworths has run out of turnaround momentum, with a trading statement highlighting problems in apparel. Zeda has declared a maiden dividend. Anglo says no to BHP once more. There's also news from Afine, Capital Appreciation, Delta, Nampak, Old Mutual, Trustco and Zeda as well - a busy and engaging day of updates, all in Ghost Bites>>>

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>>>

This year, South Africa is set to become the tenth-largest solar market in the world. In 2023, R17.5 billion rands of solar panels were imported into this country. 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>>>

Nvidia has been the headline-grabber of the year, so we dived into the recent earnings and relative share price performance vs. peers. Intuit is a software-as-a-service powerhouse that is well worth understanding, though the share price looks to be forming a dangerous double top. Episode 177 of Magic Markets (brought to you by Future Forex) delivers insights into both these great companies. You can listen to the show or read the full transcript at this link>>>

In case you missed it:

​Dominique Olivier brings you five tales from the AI world that will educate, thrill and quite possibly shock you. From unethical labour practices through to ghostly appearances by Katy Perry at major events, the future is increasingly looking like an AI experiment. Read it here>>>

​This is a massive election year, with over 60 nations going to the polls. On the latest Investec No Ordinary Wednesday podcast, Investec Wealth & Investment Chief Investment Strategist Chris Holdsworth shared his insights on the election outcomes that matter most to markets. Listen to the show here>>>

With elections around the corner, managing your behavioural bias is so important. In other words: don't panic! Kingsley Williams of Satrix elaborates in this article>>>

CA Sales Holdings recently presented on Unlock the Stock and engaged in a vibrant Q&A with attendees. This stock has been a top performer. To understand why, watch the event here.​

Local company news:

Woolworths had the misfortune of releasing a trading update on a day when local retailers were already getting pounded on the market due to election uncertainty. News of the apparel side of the business doing poorly did nothing to help the Woolworths share price. The share price needs to hold the current levels or it could be a long way down.
Zeda has announced its maiden interim dividend and I didn't get the share price pop that I was hoping for. Although the rental business had a great revenue result as I expected, profitability was impacted by the normalisation in the used car market - and to a greater extent than I had hoped for.
We also saw a morning of ping-pong between Anglo American and BHP, as the activity of the prior day (remember they are listed elsewhere) was all released on SENS to play catch-up after the public holiday for voting day. Long story short, Anglo has said no to BHP once more and for now at least, BHP is walking away. Watch that Anglo share price carefully.
We also saw major news from the likes of Afine, Capital Appreciation, Delta Property Fund, Emira Property Fund, Nampak, Old Mutual and Trustco.
You can get all the details in Ghost Bites at this link>>>

Short stories v.01: the future is an AI experiment

Why are Silicon Valley valuations higher?

International business news:

Foot Locker breathed some life into its share price after announcing a drop in comparable sales during the first quarter of 1.8%. That's hardly good news, but it's better than the expected drop of 3.1%. The market loved the news that average selling prices rose during the quarter, which suggests that Foot Locker is doing a better job with its assortment and can thus afford to be less promotional. That's encouraging for the gross margin trend.
Ulta Beauty also had a great day for its share price, despite comparable sales only being up 1.6%. The market appreciated the various steps that the company has put forward to boost sales growth.
We just covered tech group Intel in Magic Markets Premium. To get access to this research and the rest of the vast library, subscribe to the platform here.

Macroeconomic Update

The SARB kept interest rates unchanged on a day that was dominated by election headlines. Inflation is expected to reach the 4.5% midpoint of the target range by Q2 of 2025, earlier than the previous forecast of the end of 2025. The SARB's model suggests cuts later this year.
The rand was focused on the elections rather than the SARB, with the ANC losing more support than expected. This opens up uncertainty around coalition politics, as opposed to the ANC being able to govern with a smaller party. Our currency weakened considerably as the market took a risk-off approach.
Offshore, US GDP figures were in line with expectations and jobless claims were slightly higher than expected ahead of the release of US PCE data today.
Key indicators: USD/ZAR R18.77; US 10-year 4.54%; Gold $2,344; Platinum ZAR R19,228; Brent Crude $81.69
This macroeconomic update is based on TreasuryONE's morning update.