Jsedirect With Simon Brown

Summary: In this episode of JSE Direct, Simon Brown delves into the latest developments in South African markets, focusing on the impact of China's major economic stimulus and the strengthening of the Rand. Key highlights include: Rand Strength: The Rand has seen notable appreciation, reaching levels of R17.12 to the US dollar. Simon discusses the drivers behind this, particularly US dollar weakness and foreign purchases of South African bonds. He explores possible future movements, with a target of R16.80 and potential for further strengthening. USDZAR | Weekly | 26 Sep 24 Global Stimulus: China's massive stimulus measures, including relaxed lending rules for banks and lower interest rates, are aimed at boosting consumer demand. This is the largest Chinese stimulus since 2008, with significant potential to impact global commodities and bolster the South African economy. Commodities & Bull Market: The commodities market is seeing positive movement, with Chinese demand driving up prices for industrial m

Episode Overview: In this episode, Simon Brown dives into the current economic landscape with a focus on interest rates, inflation, and the state of the South African Rand (ZAR). He also explores asset-light businesses and why they make great investments, followed by a breakdown of the latest market activity and local company results. Rate Cuts & Inflation Outlook: South African CPI (August): 4.4%. A possible drop to 3.5% in October discussed with Johan Els, Chief Economist at Old Mutual. The need for rate cuts to stimulate the economy, with experts debating between 0.25% and 0.5% cuts. Fed decision and its potential market impact. SA Prime and CPI September 2024 ZAR Strength & Market Trends: Rand showing strength, potentially reaching sub-17 levels. Global market highs: S&P 500, NASDAQ, and JSE Top 40. Consumer confidence in the US and South Africa rising but still negative. Platinum Group Metals (PGMs) & Palladium: A strong bounce in PGM stocks, driven by oversold positions and palladi

Summary In this episode of JSE Direct, Simon Brown discusses various topics including the troubles faced by Anglo Platinum, the performance of leisure stocks, Anglo Gold Ashanti's* acquisition of an Egyptian gold miner, and the impact of two pot withdrawals. He also touches on the future of PGMs, the growth of electric vehicles, and the psychology of markets.  Takeaways Anglo Platinum is facing challenges as Anglo American wants to get rid of their stake, causing a sell-off in the market. Anglo Platinum weekly chart The PGMs market is uncertain, with palladium and platinum prices experiencing fluctuations. The World Platinum Council projects a second year of meaningful platinum deficits, with jewelry demand expected to rise. The growth of electric vehicles is impacting the demand for PGMs, but the market is still uncertain. Investors should wait for positive price action before considering investments in PGMs. Anglo Gold Ashanti's acquisition of an Egyptian gold miner raises questions about the use of eq

Episode Summary: In this episode of JSE Direct, Simon Brown delves into the impact of anticipated interest rate cuts and how they may affect various sectors and stocks. He shares his thoughts on potential beneficiaries like consumer stocks, REITs, and companies with high levels of debt. The episode also covers key updates on Nvidia's earnings, Nike's stock valuation, and a new ETF listing by ETFSA. Interest Rate Cuts and Market Impact: Jerome Powell's Jackson Hole Speech: The anticipation of rate cuts as early as September, with an expected reduction of around 75 basis points by the end of the year. Benefiting Sectors: Companies with significant debt, consumer stocks (Mr Price, Foschini, Shoprite), and REITs are likely to benefit from lower interest rates. Sector-Specific Insights: REITs: Discusses the potential for real estate investment trusts like Storage, Spear, and the concerns around office spaces with high vacancy rates. Consumer Stocks: Simon reiterates his positive outlook on consumer-focused comp

ETFSA is listing an Actively Managed ETF, The ETFSA Balanced Foundation Prescient AMETF (JSE code: ETFSAB).  Simon spoke with Gareth Stobie from ETFSA about the ETF, the listing process, where it fits in a portfolio and what it will be holding. IPO opens: 26 August 2024 Listing date: 02 September 2024 JSE code: ETFSAB TER: 0.52% ETFSAB

In this landmark 600th episode of JSE Direct, Simon Brown reflects on the podcast's journey from its beginnings as a radio show in 2008 to becoming a leading podcast for market insights. The episode covers a range of topics, from South Africa's local CPI and a strengthening Rand to the surprising twists in the gold market and a mixed bag of corporate earnings. Local Inflation Data: South Africa's CPI has come in better than expected at 4.6%, fueling speculation on whether the next rate cut by the MPC might be more aggressive than anticipated. South Africa CPI | July 2024 Rand Strengthens: The Rand has shown significant strength, dropping below 18 to the dollar, with Simon analyzing the contributing factors, including foreign investment in bonds and a weakening US dollar. Bull Market Sentiment: Simon reaffirms the current bull market, highlighting the JSE's all-time highs and advising listeners to stay invested while cautioning against the risks of sitting on the sidelines. Top40 20 August 2024 | Weekly cha

Sasol's Struggles: Simon revisits Sasol's recent production and trading updates. Despite some positive news, the company's financials remain grim due to significant write-downs and a challenging pricing environment, especially in the chemical complex. With a forward PE ratio hovering around 3, Simon questions the actual value in Sasol and advises caution, emphasising the importance of waiting for a stock to show signs of recovery before investing. Sasol weekly chart | 13 August 2024 ADvTech's* Solid Performance: Simon provides insights into ADvTech's latest trading update. Despite a voluntary update (not mandated by a 20% variance), the company shows strong growth in earnings per share. He discusses the stock's valuation, historical performance, and why he remains optimistic about its future prospects, even as it trades at a PE ratio of around 15. ADvTech weekly chart | 13 August 2024 Combined Motor Holdings* (CMH): Simon shares his thoughts on CMH, a stock he has held for years. Despite a stagnant price

Apple's Financial Performance and Buffett's Decision: Apple's recent financial results showed steady revenue growth across various segments including iPhone, MacBooks, and iPads. Warren Buffett's Berkshire Hathaway reduced its stake in Apple by half, sparking market speculation. The implications of Apple's valuation and Buffett's strategy in maintaining a significant yet reduced position in Apple were discussed. Market Movements in Japan: The dramatic drop in Japan's Nikkei 225 index, which fell nearly 27% from its recent highs, was analyzed. Possible reasons behind the sell-off included the unwinding of the Japanese carry trade and broader market concerns about global economic stability. The role of low liquidity in exacerbating the market decline was highlighted. Nikkei 225 Nedbank's Financial Results: Nedbank reported solid financial results with HEP's up 11% and a near 15% return on equity. Improvements in impairments and concerns over the cost-to-income ratio were noted. The banking index's perform

Jerome Powell's Statement: Rates left unchanged in the US. Possible rate cuts on the table for September. US MPC meeting on 19 September. Data needed: improving inflation and higher unemployment. Oil and Gold Market Update: Brent Crude: Under pressure, signaling weak global demand. Lower highs trend since June 2022. Support at $72.50 and resistance around $88. Brent Oil | 01 August 2024  Gold: Trading near all-time highs. Strong central bank buying. Uncertain targets, but bullish sentiment persists. Gold | 01 August 2024 Potential JSE Delistings: Criteria: Dividend yield > 0, market cap < 5 billion ZAR, NAV price > 100, P/E < 10, and profitable. Initial search yielded 53 stocks, refined criteria (dividend yield > 5%) narrowed it down to 25. Top candidates: African Media Entertainment, Argent, Combined Motor Holdings*, eMedia, Frontier Transport, Home Choice, Mustek, PrimeServe, Transpaco. Shoprite*: Trading at all-time highs. 12% revenue increase, 6.3% like-for-like growth, 5.8% inflation.

Presidential Vision for Infrastructure Development: The South African President's recent speech emphasised making the country a hub of construction and infrastructure development. The potential for public-private partnerships and the types of infrastructure that might be developed, including roads, energy transmission, and public buildings. Stocks That Could Benefit: Construction Stocks: A detailed look at various construction-related companies and their potential to benefit from the President's infrastructure plans. PPC: Potential benefits from increased construction activity. Murray & Roberts: Despite historical losses, they have a division in infrastructure and renewable power that might benefit. Stefanutti Stocks: Focus on their claim against Eskom, which is crucial for their future. Wilson Bayly Holmes (WBHO): Expected growth, though a significant portion of their revenue comes from Australia. Raubex: Strong performance and solid management, with significant involvement in road construction through

SA GDP Growth Prospects IMF's projection: 0.9% GDP for South Africa this year. Potential factors for growth next year: Reduced load shedding could add 1% to GDP. Two-pot system introduction, expected to inject around 40 billion rand into the economy. Potential rate cuts: half a percent by the end of the year, possibly 1% by mid-next year. Inflation targeting at 4.5%. Optimistic outlook with a 60-70% probability of achieving 3% GDP in 2025. South Africa GDP Delistings and Market Movements Bell and Sasfin delisting announcements. Other potential delisting candidates in the small-cap space. Importance of constructing a portfolio that can benefit from economic growth and potential takeouts. Bell weekly chart Pick n Pay Rights Issue Explanation of the rights issue and its implications. Instructions for shareholders on handling nil paid letters. Simon's perspective on waiting for dust to settle before considering Pick n Pay shares. Today is the last day to trade before Pick n Pay rights issue kicks in.

Load Shedding Update Milestone: 100 days of no load shedding by Friday. Factors: New capacity online, Kusile unit 5 (800 MW), upcoming additions from Medupi and Koeberg. Impact: Reduced GDP loss (previously 1.8% of GDP due to load shedding). Positive effect on inflation and economic stability. Winners: Retailers: Shoprite*, Pick n Pay, Spar (less expenditure on diesel). Manufacturers: Invicta, Hudaco (benefit from increased customer stability). Real Estate: REITs with shopping centers, reduced generator use. Interest Rates Jerome Powell's Speech: Potential for a single rate cut in November. Impact on Markets: Minimal immediate impact, with expectations already priced in. Local MPC Meetings: Predictions for rate changes on 19 September and 21 November. Market Insights Mr Price*: Ex-dividend yet the stock price increased, indicating strong sector performance. Tesla Analysis Market Share: Decline in second-quarter sales but maintains a significant market share (~50%). Challenges: Increased competiti

Key Takeaways MultiChoice Trading Opportunity: Potential for profit if the Canal+ deal goes through, despite current low stock prices. Futures Trading: Importance of understanding margin, liquidity, and strategy when trading ALSI and ALMI futures. Market Conditions: Current cheap valuation of SA Inc stocks presents opportunities, pending political stability and cabinet announcements. MultiChoice Mis-pricing: Discussion on the 125 Rand mandatory offer from Canal+ for MultiChoice. Current stock trading at 102 Rand due to poor financial results. Analysis of Canal+'s offer document, potential deal completion, and possible trading opportunities. Index Futures - ALSI and ALMI: Detailed overview of trading ALSI (All Share Index) and ALMI (All Share Index Mini) futures. Explanation of points trading, margin requirements, and contract specifics. Tips on trading strategies, including liquidity considerations and handling overnight gaps. Trading as a side hustle, watch the video. Market and Stock Updates: Cabine

Face-Ripping Rally on the JSE: Surge attributed to the formation of a coalition government involving ANC, DA, and IFP. Top 40 index rose 3.5%, a significant increase not seen since February 2018. The rally, likened to the start of a marathon, suggests potential long-term growth, despite possible volatility. RAND and Resource Stocks: RAND trading under 18, affecting resources positively. Potential for RAND to strengthen further, possibly reaching 17. Coalition Government and Market Impacts: The coalition’s stability is uncertain but critical for long-term market confidence. JP Morgan upgraded South Africa from underweight to overweight, signaling positive outlooks. SA Inc Stocks and ETFs: Retailers like Shoprite*, Mr. Price*, Foschini Group*, and Truworths hitting 52-week highs. ETFs for local investors, focusing on SA Inc.. Recommendations include avoiding heavy Rand Hedge dual-listed miners in a strong RAND environment. RSA Retail Savings Bonds: Interest rates for RSA Retail Savings Bonds to drop i

US Inflation: Core Inflation: Came in at 3.4%, lower than the expected 3.5% and previous 3.6%. Impact: Positive market reaction, with US Treasuries under pressure, Rand strengthening, and Dollar weakening. FOMC Outlook: Potential rate cuts anticipated towards the end of the year, possibly in November and December. Company Results: SPAR: Performance: Results were as expected, market responded positively. Issues: Challenges in Switzerland, discontinued operations in Poland, and ongoing SAP implementation issues. Foschini Group: Performance: Strong results, market reacted favorably. Highlights: Good performance in their online platform Bash and general improvement across brands. Foschini Group and Clothing Retailers: Potential growth areas and resistance levels in stock prices. Interesting Stock: Contemporary Amperex Technology Company Limited (CATL): Sector: Battery technology for EVs and corporate solutions. Market Performance: Positive analyst ratings, promising future prospects. Renergen*: Helium Pr

New Two-Pot Pension System: Details on the implementation and implications for retirement savings. Kicks in 1 September 2024 Can take up to R30k immediately, but this will be taxed. Thereafter 30% of contribution go into a savings pot your can take out, it will be taxed. Only use for an emergency, not holidays. Rainbow's Return to JSE: Analysis of Rainbow's re-listing after 17 years. RCL Foods will be unbundling later in June One Rainbow share for every RCL Foods share But is Rainbow the best chicken stock on the JSE? OPEC+ Impact on Oil Prices: Members agreed to cut voluntary production cuts Oil crashed As did Sasol [caption id="attachment_42315" align="aligncenter" width="849"] Brent oil | weekly | Koyfin Q1 GDP Results: Negative Q1 Q2 should be slightly better thanks to reduced load shedding But election will have worried investors. Santova Stock Analysis:  Buyer at 750c Seller at 760c [caption id="attachment_42316" align="aligncenter" width="849"] Santova daily | 06 May 2024 | Koyfin Coalition T

  Election Results Impact on Markets Slow ballot counting with three ballots, 18.7% counted. CSIR prediction at 5%: ANC 42%, DA 22%, EFF 9%, MK 14%, Patrick Alliance 2%. Market concerns about ANC forming a coalition. Rand fluctuations: From 18.34 on Tuesday to 18.61 currently. [caption id="attachment_42259" align="aligncenter" width="849"] Rand | 1pm 30 May 2024[/caption] Pepkor Results: 9.5% revenue growth. 24.5% growth in fintech, now 12% of the business. Pepkor sells 7 out of 10 smartphones in South Africa. Woolies (Woolworths) Update: Earnings down 20% for the year ending June. Challenges in the clothing segment, further deterioration in footfall and discretionary spend. Food segment performing better, but overall market reaction negative. Zeda Results: Revenue growth of 19%, HEPs up 12.5%, return on equity at 28.5%. Surprise 50 cents dividend despite previous year-end dividend expectations. BHP Billiton and Anglo American Merger BHP walked away from the Anglo-American takeover proposal. Specula

Nvidia's Financial Performance Nvidia's Q1 Results: Revenue up 262% year-on-year to $26 billion. Net income up 628% year-on-year to $14.9 billion. Gross margins at 78.9%. Stock Split: 10-for-1 stock split set for 7 June. Market Reaction: Stock traded over $1,000 in the aftermarket. Anglo American and BHP Group BHP's Third Offer: Anglo American rejects BHP’s third offer. Deal Concerns: Issues with the price and risk of the deal. Next Steps: Extended deadline for BHP's offer to 29 May. Richemont's* Results Richemont's Position: Holding steady in a tough luxury market. Earnings Growth: Expected around 10% over the next few years. Preferred Stock: Richemont favored over LVMH for its focused luxury product line. Copper Market Copper Boom: Strong performance but cautious outlook due to potential price pullbacks. Investment Options: Local ETNs and offshore ETFs available for copper investment. Structured Products Educational Video: Power Hour session on structured products by Kevin Swartz from Standard B

Anglo-American vs. BHP Group Anglo-American rejects BHP Group's offer, unveils its own restructuring plan. Anglo-American to divest De Beers, Anglo-American Platinum, coking coal in Western Australia, and reduce spending on UK fertilizer businesses. Focus on high-quality iron ore and copper assets. Discusses shareholder likelihood of accepting Anglo-American's plan over BHP Group's offer. Discussion on lab-grown diamonds and potential impacts on the market. Market Insights Tencent's positive results impact Naspers and Prosus. NASDAQ and S&P close at all-time highs. Analysis of South African market trends, influenced by gold stocks, Naspers, Prosus, Richemont, and Rand strength.   [caption id="attachment_42112" align="aligncenter" width="849"] Top40 close 15 May 2024[/caption] Discussion on upcoming elections' market impact. NHI bill signed, causing sell-off in healthcare stocks. US imposing more tariffs on China, strategic implications discussed. Company Highlights Positive financial results from C

Introduction: Simon Brown kicks off the episode discussing the current state of the Rand, noting its stability leading up to the elections despite fluctuations. Speculation around ANC's momentum in the polls and potential coalition scenarios. The impact of the dollar's weakness on the Rand's performance. Structured Products: Simon delves into the concept of structured products, which offer capital guarantees and enhanced returns through strategic investment mechanisms like options and bonds. Announcement of an upcoming Power Hour with Standard Bank focusing on structured products. Brief overview of actively managed certificates, also at next weeks Standard Bank Power Hour. FNB's New ETNs: FNB's introduction of new Exchange Traded Notes (ETNs), including a variety of indices and US-listed stocks. Explanation of Compo and Quanto variations, tailored to currency impacts. Highlights of recently launched ETNs, such as Nvidia, Booking Holdings, Eli Lilly, and Palo Alto Networks. Amazon.co.za's Arrival: Si