You're listening to Strictly Business Podcast
with Lindsay Williams.
The JSC has closed its doors for another day,
so it's time for the 5 o'clock shadow.
And as always on a Wednesday, I speak to Skulk Lowe,
Portfolio Manager at PSG Wealth Old Oak in
Cape Town.
A very cold Cape Town, I understand, Skulk.
That's an understatement.
No, I mean, it's freezing cold.
And the most disappointing
part is you speak to your counterpart.
part, your friends and families in other parts of South
Africa, more specifically the
Gauteng region, Limpopo,
and they're walking around with t-shirts.
They're saying it's like
30 odd degrees.
Feels like spring already in the latter part of
August.
We've got snow on Table Mountain.
That maybe just describes it all.
That's amazing.
But just before we get off the meteorological theme,
Isn't it nice?
Don't you find it nice to have a freezing cold evening and you
can have a glass of red wine?
Not that you need an excuse to have a glass of red wine,
but some people do, not me.
And snuggle up around a fire or a heater or something,
whatever it is, I find it quite cosy.
It's not nice to have a temperate
climate.
I like a good freeze.
Yeah, South Africans love
to moan about stuff.
Me too.
I would just like to moan about being hot again
just for a day or two.
No, I totally agree with you.
I love all facets of Cape
Town weather.
I know I'm a typical Cape Townian
boy.
I grew up here and I'm still staying here.
So it is literally
a I think when the Dutch arrived there,
they first called it
Little Holland or something like that,
if I'm not mistaken.
A clay Netherlands, a small,
small Netherlands.
And
I think it's for that reason,
because you've got these,
literally these four seasons in one day.
Winter is just constantly raining
and, you know, summers are nice and hot,
which I don't think you've had this year.
Did you?
Well, it's 28, 29 degrees at the moment,
but this is the last day of summer now.
It's all over.
Temperature starts falling according to my Norwegian
weather app.
which is incredibly accurate and yeah so
i'm going to make the most of this but that this is the end of
of of summer and talking about the netherlands i
occasionally drive around skunk or get driven around
and i see bid corp vans whizzing around everywhere
and they came out with a set of results we're waiting for them and
videos but uh let's focus on big bid corp
nice set of numbers and despite a backdrop as they
say of let's have a look turbulent and
challenging world beset with anemic,
stagnant, and sometimes negative economic growth.
And yet they increased their revenue
to $226 billion,
up over 15%.
What a performance.
Yeah, that's amazing.
I mean,
I've often had this conversation, you know,
either we'll talk about Nuclex or
Capitec,
and then I always refer to these companies,
the ones that got away.
Now, I'm sitting here feeling sour.
I mean, I feel really,
really disappointed because one of these companies that
I just always want to include in my portfolio.
It's just most of the time it's
just a little bit on the expensive side.
So you mentioned it today.
I mean, the revenue looking really, really good,
15% higher.
When we look at the headline earnings per share,
24 Rand,
also up 15.5%.
I think the most important thing is that.
it's a beat when you compare it to the refinitive
consensus estimate so that was good to also do
dividend um we're looking at a 10 rand
90 uh dividend which is up 16
percent refinitive had them at 10.75 so
beat
beat uh maybe on the on the revenue a little bit
softish but it's just
as i read through this is this the statement i just
felt good i mean this is a company
and um ceo bennett
He actually mentioned in the report that the
results were almost 100%
organic growth.
Now, that's fantastic.
It just means that there is very little acquisitional growth.
This is a company that just managed their expenses,
and they actually just
opened new doors where they could do so.
They mentioned in the report the
challenging environment, as you just referred to.
There's a soft…
food inflation and the higher core inflation that's
usually for food companies like PitCorp it's a
very very challenging environment and they managed
to steer
this company well well clear of this this challenging
environment ah i would say great great results and now
as we stand in the company's current value just just
shy of a 16 times p e ratio
so not that expensive anymore
there's
a few companies that might be a little bit more you know could be seen
as cheaper but uh definitely companies on my radar
and ah sort of the cherry on the cake uh
shelters were extremely well rewarded
today you know four point 5%, 4%,
up for today, close today at 440 rand.
Very good.
Just for people that are still getting their head around the fact
that there's a Bidvest and a Bidcorp,
and they were one at one time,
just where does Bidcorp make its money?
Where's its real driver?
Again,
it's the food business.
We sort of looked at them.
Food delivery.
I mean, you have in South Africa.
I often see them with these little food trucks delivering food
to restaurants,
takeaway companies, and those type of companies.
So they remember,
you actually mentioned where they come from.
They come from BitFest.
Back in the days, BitFest, their logistics,
delivering stuff,
they did so well with the
food side, food delivering side,
that this became a very,
very solid company on its own.
Yeah, so food delivery is, which is big business.
Skulk,
we've come more or less to the end of the June year-end
company's results as you go into summer.
And it's been okay.
Standard Bank was quite good, I think.
Yeah,
I think banks in general came out very,
very solid.
But I think
August will be known for the
massive.
And when I say massive, I want to put this in capital,
capital letters.
massive month for local
property stocks.
We had, I don't know if it's in front of me, I don't know,
the next day or two,
and this morning we
asked our head of the dealing desk,
where did they see the flows?
And he said, well,
flows were predominantly asset property stocks.
Well, which ones?
He says, well, all of them.
Literally all of them.
Is that an interest rate play, is it?
Is that an anticipatory play?
with price of money coming down which is always good for property
that that is the case i mean he mentioned it is it's pretty
much the locals buying local property stocks but i
went and look at um i also do
these it's called the themes or asset
asset
class movements and i up to
end of july when you looked at that then look
i don't elaborate too too too deeply when
you look we had to i used um
develop market equities, emerging market equities.
I'll use U.S. growth,
small caps, global bonds.
But the sector that's been under
massive amount of pressure, not only last year,
but also up to July
this year, was global property,
property stock, retail or REITs.
This month,
that thing has popped up from year to date being
either lost.
or second last and now now finding itself in something like
fifth position so there's definitely a
migration from from uh
equities bonds to to actually to
to to property stocks um globally but
said african property stocks it's sort of special because
you know you and i have had this conversation where
when you look at the prices relative to its
net asset values this is the deepest that i've seen
that there's those variations you know since since
2003.
And that was sort of also a very special
time because that's where we've seen a massive turn
in local properties as well.
Also, one thing that I love looking and monitoring is
Stats SA.
They bring out on a monthly basis,
they bring out the
buildings completed
for that month.
And I look at specifically
non-residential properties.
And I...
I usually just combine it over a year period.
Now, when you look at that data,
this is the lowest amount
of properties that's been completed over the past 12 months,
since that 2002,
2003 period.
Now, you would ask people, oh, that's actually bad,
that's negative.
Yes,
it's negative because everybody sort of had a negative
outlook on asset property.
First, we had COVID because everybody...
It's going to work from home.
They're never going to go back to the shopping centers never going to go back to
the
offices Never go back to the banks again and now
They had it wrong.
Everybody's going back to the offices.
They're going back to shopping.
So demand has re-emerged after
COVID and lockdowns and supply,
it has virtually stagnated according to StatsSA and
according to you.
So you've got a perfect storm for a bull run.
Oh, yeah.
And then just adding to that mix, which you just mentioned,
we're at the end of a hiking cycle and
about to enter the declining
cycle.
I mean, then if you add those two together,
you get a beautiful,
beautiful environment for undervalued property
stocks, which clearly, you know,
some investors are currently taking advantage of.
The hottest property overseas, of course, is NVIDIA,
and they come out with results after the US close.
I don't know if you're involved in it.
I don't know if you own it.
But even if you don't own it,
you will be watching those results because according to the options
market in a little piece that I read from Bloomberg
the other hour.
It was saying that options are saying it might be
10% up or 10% down,
given the positioning of the options,
investors or traders.
So it should be fun in the aftermarket, Scott.
Yeah, yeah, yeah.
I mean, that's putting it mildly,
Lindsay.
I mean, what Lindsay is basically telling us,
I think that I also read somewhere,
I think this is the biggest spread.
This is the largest long positions.
And.
short positions at exactly the same time
in any company.
I mean, so effectively,
you've got massive bulls and massive bears.
And
I think the perfect scenario would most probably be
that NVIDIA come out bang on target.
They don't miss target.
They don't miss consensus.
They come out exactly.
And I think that might be the sort of the best case
scenario for this.
Because like you said, if they miss, I agree with you.
I think we're going to see this company.
have a hefty fall, and if they beat,
I wouldn't be surprised if it runs, like you said,
anything between 4% and 10%.
Also, the consensus.
One of my analysts, I want to take his thunder.
Keenan came to me.
Oh, no, it was Jared.
He came to me today, and he said, Scott,
this is also, I mean,
he always looks at not only the consensus,
but he'll look at the difference in
consensus,
the lower band and the upper band.
And it is crazy when you
look at this company.
As we sit here, well, it's called a pre-market market close.
More or less, let's just say,
NVIDIA is trading at $126.
That's where it's currently trading.
When you look at the upper band,
the analysts are forecasting that this
company could be trading at,
let's call it $205
per share.
And on the lower side,
there's some that actually feel it could be trading, you know,
about $60 to $70.
Oh, no.
Come on now.
What's it going to halve, in other words?
Well, you know,
I'm not going to diss that person's, you know,
recommendation because, I mean,
any person that said that
Cisco will be
halving in 2000, you know,
you would have had most probably the same.
Same replies.
And it did.
It didn't only fall 50%.
It fell 76% in the
next two years.
So anyway, what goes up can go down.
So let's see.
I think it's going to be an interesting day.
It certainly will be.
And you've got the high pressure, which is the bullish stance,
and the low pressure, which is the bearish stance,
in the form of options and futures and every other derivative you
can conjure up.
And the two come together.
Big storm.
Now then, Scott.
We've got to wait for that.
We're going to have to wait for that.
That's going to be good.
Are you involved in it, though?
No, no, no.
I don't have it in a video,
so it's easy to sit on the sideline and watch it
like it is.
And have some fun, yeah, exactly.
Okay, let's have a look at some market prices now.
The dollar round, that's more or less unchanged,
slightly stronger for the dollar.
1780, that exchange rate.
The British pound against the round is 2351,
and the euro round is 1981.
Euro dollar, 111.28.
What else have we got here?
Gold price.
That's down $8.50 to
$25.07.
And platinum, down $17.
These white metals worry me.
$9.42,
down 1.75%.
And palladium, down 1.3% to
$9.46.
Okay,
other commodities of importance for South Africa and
for the world.
Oil price, thank goodness, coming down after the Libya scare.
That was brief.
$78.88,
which is down 0.8%.
And the West Texas.
$74.83,
down 0.9%.
Elsewhere, copper down 3.3%.
That's the one that really stands out.
S&P 500 futures ahead of NVIDIA,
56.49,
which is just very slightly higher.
The US 10-year Treasury bond yield is
3.83%.
And what else have we got?
The South African 10-year,
9.33%.
Bitcoin price has been under huge pressure today.
It's down 5.4% to $58,000,
$575,000,
something like that.
Okay, good.
What else have we got, Skulk?
You're going to give us, rather, the JSC closing indices,
but the one that really stands out, and for all the wrong reasons,
resources.
I know in London they were smashed as well today,
but that doesn't bode well.
No, not at all.
Yeah, click, click.
The clear economic growth worry is still
very much persistent.
I mean, I think what was it?
A bulletin came out,
was it earlier this week?
Yes.
And the CEO mentioned… I think it was a 2% rise in
profit or revenue.
I can't remember what the metric was.
But anyway, it was pretty slack.
He gave me the idea that
the supply will still outstrip the
demand specifically for something like copper.
this year, but they're building towards in
2025,
2026,
where they do see things picking up again.
But as you mentioned, I mean,
if it was white metal, if it was yellow metal,
if it doesn't matter which metal,
even if, you know,
altogether Brent or
Sassl, it was under pressure.
As you mentioned, you know,
the resource index today dropped 2.5%.
What a bad performance.
And we can find out why right now.
Let's go for the gainers first on the JSC scale.
A Bidcore, great performance, 4.5% up.
Remgrove up 1.8%.
Outsurance 1.7% to the good.
Aspen 1.2% up.
Motus up 1.2%.
Impala Platinum on the downside, leading the way,
5.5% weaker.
Sebanye, the same, 5.5% in the red.
Northerns, 5.4%.
Anglo-American Platinum, 4.5%.
and anglo gold ashanti down 3.6 a
shocker of a day any stocks outside of those skulk
yeah i think um well anglo
gold i just remember that the ex of story oh
okay so so that's that's sort of looking on a
better side impala platinum um
the biggest biggest loser for today
that seems currently it seems
highly highly likely that um
impala will be falling out of the the south african index
so that that that's uh that's that's most
probably one of the big reasons why we see impala platinum it's not
done and dusted yet but as it currently stand if things remain
unchanged they will fall out of the south african index
and i think that will be most probably the main reason why it got
hurt a lot more than some of these other other and
then naturally you know king calls the other one that's also extra
but be
as it may it's been a horrible horrible
day if you had anything
anything remotely connected to commodities.
Let's have those indices, if you will, and also the value traded.
So the JSE all share closed today at
84,019 points.
That is down 63 basis points.
I mentioned there,
there were resources down 2.5%,
while the industrials also down 37 basis
points.
The RAND that remained at these solid levels,
and we also said that it's sort of a return
to these...
SA Inc.
type of company, which is always good for financials.
Financials closed today positive,
positive 0.16% up for today.
And as earlier, you mentioned earlier,
SA Property,
they didn't care one bit for the
market retracing again up
30 basis points.
When you look at the value traded for the market,
market traded over 21 billion today.
So not a slow day.
Actually, not a bad day at all.
But yeah, as we mentioned tonight.
We're sitting, we're waiting for Navidia.
Unfortunately, I think it's going to be after hours.
So, yeah, let's see.
Let's see how they play.
Skull, good luck on Saturday with the rugby.
And also wrap up warm tonight.
Skullclaw is a portfolio manager at PSG Wealth
Old Oak in Cape Town.
And that was the 5 o'clock shadow.
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Lindsay Williams and various contributors and
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