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 Thursday, I speak to David Shapiro from Sasson Securities and
Viv Govender from RAND Swiss.
I want to start with you, Viv, because everyone was waiting for NVIDIA yesterday.
How did they deliver?
What did you make of their numbers, which is they beat expectations.
Yeah, but NVIDIA is not a problem.
NVIDIA is beating expectations.
by such a large amount each time uh you know it's come out recently the market
doesn't expect the bt expects a spectacular beat and
unfortunately did not get that this time and so we find the share price down about
four and a half percent today i think the only
reason is the project thing in the number objectively was the fact that margins were
under pressure um but
i mean images margins are gigantic you know famously gigantic so uh you know it
probably doesn't make sense that if their only
mode is to be better than the other guy They should be spending more money to try
and improve their performance effectively.
But yeah, objectively, results are great.
But the market was so used to smashing results that I think this was just not
good enough to be positive.
The market is slightly more mature.
I mean, the share price and the company progression is more mature.
So it's going to have to get a bigger and bigger beat every time in order to infuse
investors.
What about the R&D in the future?
Because that has been a theme of many tech companies saying,
I'm going to spend $150 billion over the next year on development.
What did NVIDIA say about the future?
Well, I think NVIDIA has had a couple of setbacks this year, especially, I think,
around what is happening with regards to China.
I think that may have been an issue.
There was a recent news story about Microsoft and what they are doing with
regards to this.
cancelling some data centers.
I think that also probably was a bit of bad news around it.
But in terms of ROD, that's pretty much Vijaya's whole spend.
They are not the company that basically produces these chips.
They are not the company that has to go and build the factories and so on.
Their main thing is basically the amount of tools.
They basically design, make sure it's fine,
and then they go out and they employ TSMC basically.
uh to do what they what needs to be done uh i think you know
16 billion in rd spending uh you know is is compared to what revenue they basically
begin isn't that rd is
primarily the main like cost uh it's not exactly i think a huge uh you know optic
or a huge uh you know it was
a danger right now so the rd spending thing out of a whack but to summarize
you're still involved in
nvidia and david you as well i'll start with you you still like it Yeah.
The only thing I see that might be a danger to NVIDIA is that people think that
NVIDIA's chips are what make them the outlier leader.
But actually, their software is called CUDA.
And the only thing I see as dangerous here is that DeepSeek has shown, that's the
Chinese company,
that it's possible to get around CUDA and get some really great results without it.
If they lose that advantage in CUDA, I think that might be the thing because that
would be the one mode that they can lose out on.
But other than that, you know… As Jensen Wan said,
the new reasoning models that are coming out use 100 times more computing power per
query.
That's just all-time good for tools than video.
Okay.
David, do you still like it, of course?
I just like all the tech stocks.
I think that this has given us, for the first time in a few months, quite
considerable months,
that I feel quite comfortable to go in and start picking up stock.
You know, despite the noise, this is a year that I...
that I knew or forecast that it's not going to be a great year.
It's going to be, if we can get 10%, I'd be thrilled.
So it's going to be a year where earnings catch up with share prices.
And I think we're going through that experience.
The outlook still remains incredibly positive.
Trying to perfect this, you know,
trying to get the absolute perfect prices in each one of these companies is going to
be impossible.
But...
If you take out the absolute result of all these big companies, they're still solid.
They're still growing.
They're still generating cash.
And for me, that's what I'm looking at.
Is there anything that's going to throw them off their perch?
Not in the foreseeable future.
And I think the same thing applies to NVIDIA.
There's absolutely no doubt that along the way,
we're going to see other companies come and challenge them.
you know, challenge them for superiority, whatever.
It's going to happen.
But, I mean, for the meantime, you know,
I'm quite happy to start building up and just be quiet about it, ignore the noise,
and,
you know, start picking up some decent positions.
And we'll see.
You know, there was nothing in the numbers that really shook me.
I think, you know, we all look for something.
And...
I suppose in every result that comes out,
you can write a bullish report and you can write a bearish report.
For each company, it's impossible for everything to be perfect.
So I'm relaxed.
I have to handle clients who like to watch their share prices, not on a daily basis,
but on every five minutes.
And I think that's the hardest thing to control.
You must educate these people, David.
You must educate them to take a deep breath and stop watching the news and stop
listening to stupid podcasts.
That's what they do.
Also to point out a fact here, Nvidia in the last year is up 62%.
And today on these results is down under 5%, 4% at the moment.
That is almost no reaction to the market for the market that's basically been as
positive as it is on the stock.
So it's almost a nothing burger, quite frankly.
Unlike Tesla, of course, which since December the 17th has fallen 39 percent.
And that was as of the close last night.
And people are defiling Tesla motorcars in Europe and the United States of America,
putting red X's on them and just generally spraying them with stuff.
And Mr.
Trump.
You know, everyone talks about him being worth 300, 400 billion, whatever it is.
It's all paper money, of course, or most of it.
And he, in that period, had his wealth reduced by 78 billion.
Viv, you've always gone on about this not being a motor car company, but a tech
company.
Is this an opportunity for people when it's down in a double bear market?
Yeah, look, I mean, there's a couple of things coming for Tesla.
I actually did a report on this today.
Firstly, of course, there's the Elon Musk, you know, like you mentioned, the brand
issue.
The second thing is the fact that Trump has reduced the benefits that you have for
electric vehicles.
It's obviously a negative.
And also the Chinese market.
I mean, I've seen reports of the Chinese market.
The Chinese, apparently in China, the only people that buy electric vehicles who buy
Tesla are the guys that don't know
cars and they go and buy the most reliable, well-known name.
It's like the Toyota of cars.
Effectively, you buy a Toyota because it's not going to go wrong on it.
But if you look at the other options available, with regards to like you know
the chinese markets there's some spectacular i mean uh
you know features on that on those on those cars and there's some of the like
the technological
things like charging rates and so on are insanely good uh so i do think there's a
lot of things but look even if tesla was to have the best
profit margins of any car company and created the majority of cars in the world
that were sold in the world it would not be worth what it is currently
so it has to be the full self-driving it has to be the robot taxi it has to be the
the
uh the robot and because i do believe that those things are coming I'm still a holder
of Tesla.
As a car company alone, if Tesla, like I said, number one car company in the world,
sold the most cars with the biggest profit margin,
I would short it at this level because it does not make sense from that point of
view.
Very good.
Couldn't have happened to a nicer fellow.
I got very, last week I told you I was very depressed about Trump saying that
Zelensky was a dictator.
Last night at around about six o'clock European time, I watched that, the
sideshow.
that was the cabinet meeting and the main show which was the press asking trump and
musk questions during the cabinet
meeting and all the other cabinet members saying nothing and musk standing there in
an emblazoned t-shirt and an
ill-fitting black cap it was just undignified to watch that but anyway
nonetheless david on to south africa now
you said you said no you did right i
i just think it's something that that is dragging down the whole
Trump administration that you've got someone like Musk going into the White
House, which is really the nerve center of
America, which is the most powerful country in the world.
Here you've got him treating it like, you know, it's his golf club or whatever it
is, his local pub,
you know, to walk in like that and not give it the dignity that it deserves.
I mean.
I don't know how they can carry on like that.
And I don't want to say conservative people, but I mean just people who've got
respect for history, got respect for the institution.
You know, that's not the way you carry on.
You know, they've turned it into a sandpit, like the kindergarten sandpit.
You know, I take...
I genuinely, I take a lot of exception to the way that they carry on and the way
they, you know,
they treat the United States as, oh, well, this is the golf club, you know,
let's decide whether to start selling burgers or something like, you know, I
mean, that kind of level.
Do you understand what I'm saying?
I know exactly what you're saying.
And the only reason that it's happening is because Trump knows that in three and
three quarter years time,
he won't be president unless he manages to change the constitution like Putin did.
in Russia, but that's not going to happen.
So he's having a load of fun.
David, the JSC is in the middle of results season.
There's so much to look at.
Motors currently down 13.3%.
That's a big move we've had in Parler Platinum.
MTN with numbers or trading updates and so many more.
Yesterday we had ABN Biv, which was up 7.5% at one stage.
We've got Harmony today and all sorts of other things.
You're going to have to obviously be selective and tell us which one.
You've managed to skim.
Well, I started to look at MTN.
You know, they came out early this morning as a trading update.
We knew the results were going to be bad.
It's an annual result.
And also that they were absolutely hammered by the depreciation of the Naira.
That's the Nigerian currency.
So I think all the bad news in their results had already been discounted.
There was nothing new in what came out.
The other one that upset me was SPAR.
They came out with an 18.
week trading update.
You know, we...
Down 62% currently.
Yeah, that's a big fall.
Switzerland, Ireland, and Southwest UK still issues there, not,
you know, not finding any kind of support.
And the local market, nothing to, you know, to be excited about as well.
So, but...
And the other was motors.
You know, you mentioned motors down 30%.
And this...
What's interesting about Motus is, in fact,
all the results are pointing towards consumers under pressure,
higher interest rates and lower disposable income.
So what's happening in Motus case, you know,
they bring in motor vehicles from South Korea and good motor vehicles.
But what's happening?
At one stage, they were affordable.
Now, no longer.
They now become, now everybody's switching to the cheaper Chinese models that are
flooding this country.
So by trading down to the cheaper vehicles,
it's hurting their sales.
And so the results were disappointing.
And that's why the market, I haven't gone through them in great detail to understand
why it's 13%,
but I think that's a general trend.
But, Lindsay, that's what we are seeing across our market.
Consumers under pressure, haven't got the money.
I think in all cases, even in retailers,
we're starting to see a lot of pressure on many of them.
Two-worths results out.
I haven't had a look.
Two-worths, share price up a couple of percent.
They used to come out with great results, but, yeah.
Look at it on the year.
It's down about 20% on the year.
which gives an idea.
But a lot to go through.
I think if I could just summarize it, there is a lot of pressure.
ABMB doesn't do any business here besides SA Breweries, which had very good numbers.
But I think there again, they're reducing debt.
I don't think volume sales where people are crowing about their results,
but I still think that had to do with more efficiencies rather than going out there
and selling lots and
lots of beer.
Viv, would you agree with David?
When I look at these results that have come out over the last week or so of
results season, it's not a sort of a blanket buy,
a blanket sell or a blanket hold.
There are certain companies that are adapting and certain companies that are
not.
You look at Spar down six and two thirds percent.
You see Trueworths, although longer term, horribly down up to two point six percent
today.
So is it very much a sniper shot market rather than a shotgun market?
I think that is quite likely true, at least at the moment.
I mean, there have obviously been these big trends over time.
And if you look at it internationally, it has been the tech trend that has driven
things,
even though it has reversed quite strongly in the last couple of weeks.
I do think that another big trend we saw today was the gold price.
In fact, anything against the dollar was down.
I think this has to do with the Trump tariff announcements that we had come out.
So if you look at it over half an hour time, you saw the round, the euro, the
pound, basically everything that's measured against the dollar.
weakened significantly.
You know, we were like 1840, we went to like 1850, like, you know, a very quick
time.
We saw some of the movements around the thing.
So you could play those back road trends, you know, quite clearly.
But it doesn't, individual stocks, yes, you are correct.
This is, I mean, especially the retail sector.
I do think the retail sector, people don't appreciate this, is going through a
rebalancing that's going to be quite significant.
And, you know, the winners are not going to be the ones that were winners in the
past.
Speaking to David's point about, you know, the Chinese cars, I'm looking to buy a car
at the moment.
When you go look at the Chinese vehicles for what you get, you know, you know, you
know,
for what you probably get like a middle level, you know, VW or something like that
there.
What the Chinese guys are offering is, you know, quite substantially better.
And, you know, I think it's partly to do with the fact that, you know, that you
interest the market.
But also, I mean, these guys are the manufacturing of the world.
They can manufacture iPhones.
They can probably manufacture cars as well.
And they bring in that manufacturing power to bear on.
a market that they haven't really, you know, attacked internationally as
strongly.
And like I said, I mean, the feature set that you would get from a car comparable
to like an entry-level BMW is astounding.
That's a very important point there.
Okay.
And, you know, if you, Lindsay,
it depends if you're a motor enthusiast and you love all the different buttons
that will come out and,
or the software that comes with these fancy German vehicles or high level.
Okay, that's one thing, but you have to afford it.
But if you just want to go from A to B, something like that, with your children or
go shopping, whatever,
who cares?
Do you know what I mean?
They will provide what you need.
And I think this is what everyone's finding.
I think they're taking South Africa by storm and
making a big impact on traditional sales.
You can see it, which would include… Toyota would include the Japanese.
You know, now it's hitting Hyundai and it's hitting Kia, it's hitting all of
those.
Gentlemen, I will confess to this, I don't own a motor car, I don't drive,
I don't think I'll ever drive again simply because I choose not to because I'm a sort
of a pseudo-environmentalist.
The last time I drove a motor car, I think I drove to Barcelona to watch a football
match in a hired car and that was it.
When I left South Africa seven, eight years ago, that was the last time I owned
a car.
And I'm sort of smugly proud of myself because of that.
I noticed the S&P is down.
You can choose who answers this question.
The S&P made a high today of 6,014 on the futures.
It's now 5,944.
Has there been data in the last half hour that has driven this market down?
Or is everyone saying this is a sell the rallies market?
Viv, I'll start with you, actually.
I think this market is just adjusting to the Trump.
tariff announcement uh i think that's that's the big thing i mean he's talked
about uh you know basically next week uh china it was
uh china big tariffs of uh canada also and soon to announce you know eu tariffs as
well uh so i think
that is what actually is the big story of the day and i think the market's trying to
figure out what's what's going to be happening right
now and that's what we're seeing at the moment is that uh uncertainty okay
yeah all right it is looking oversold to me but um it doesn't like it when it goes
up you
I don't think even today at the end of today or the end of tomorrow will probably
end up but at the moment
everyone's confused no one if you're owning a pers if you're owning a business
and you're trying to uh
strategize the way forward or decide what to do with
Trump in part with Trump in charge for that you can't make a decision you've got
absolutely no idea
what's coming and what's real what's strict what's not thick and and And I
think Viv's 100% right.
At the moment, people are just saying, you know, we can't make up our mind.
And I think it's coming through in traders as well.
They can smell that there's weakness and, you know, they're having a field day.
But as long as you know that we're much lower now, I haven't got the data in front
of me,
but I think we are much lower than when he was elected.
When he was elected, we thought that...
Everything was going to be fine, deregulation, lower taxes, even if there
were tariffs and immigration.
We thought that all of those, his whole policies would actually drive the U.S.
economy stronger and that things would be better.
We'd have what's called U.S. exceptionalism.
You know, it's not.
We're actually,
what he's done is created unbelievable uncertainty in markets now that
exceptionalism is
being challenged.
And it's not only going to challenge America, but challenge the rest of the
world as well.
No one has a clue.
Someone has a clue because Tesla's 288 now, down a bit again,
was 488 just about the same day that he was appointed as a special government
employee.
of the Department of Government Efficiency.
So that's what the world thinks about that.
David, you sent me an email early today about Ramaphosa having a nasty little dig
at
Trump, and you seem to be a little bit confused about this, if that's the correct
word to use.
Actually, a little bit surprised.
And there's another couple of words you used as well, which I won't obviously
broadcast.
You know, my worry is South Africa.
Uh...
You're dealing with an unpredictable person, you know, a person that you can't
read.
Don't tell him that he's got the information wrong.
In other words, don't correct him or lecture to him.
I'm saying Rappaposa to Trump.
He's not the kind of person that likes to be caught out and don't tell him that, you
know,
this is misinformation.
So if South Africa wants to continue to trade with Trump, Just withdraw.
Be a little humble and you know where the issues lie.
The issue lies with South Africa's relationship with Iran, the whole ICC
case.
All of those issues are upsetting Trump.
So if you want to do trade and you want to continue, just bear that in mind and don't
lecture him.
And that's what I'm worried is that Ramaphosa will not backtrack.
The ANC will not backtrack.
They say.
We will not be bullied.
I'm saying, hold on a sec.
These are the Apple people, the Nvidia people, the Microsoft people, the Amazon.
We use their products all the time, every day.
Don't mess with him because he can pull the plug.
You know, he's a spiteful person.
He can pull the plug and turn the switch off.
Just, you know, in other words, know who's strong.
I loved his face in the press conference with President Emmanuel Macron.
yesterday or the day before, whenever it was.
And he said, you know, the Europeans loan Ukraine money and Ukraine has to pay it
back.
And you saw Macron and he leant over with his right hand and put his right hand on
the arm of Donald Trump and said,
you're talking nonsense, essentially.
And you could see Trump's face.
He was screaming.
He doesn't like to be taken to task.
It's an amazing, it was an amazing press conference, I have to say.
anyway gentlemen sorry the the the the the the the the the the the the the the the
the the the the the the the the the the
the the the the the the if you see what the merck's guy from uh if you see
what the merck's guy from uh if you see what the merck's guy from uh germany is
saying no go on um so the the germany is saying no go on um so the the germany is
saying no
go on um so the the most guy from germany basically the most guy from germany
basically the newly elected guy that tried
to jump uh
newly elected guy that tried to jump uh newly elected guy that tried to jump uh he
came out and said basically uh i he came out and said basically uh i he came
out and said basically uh i think it turns out like the usb doesn't you know, quite
reticent to take the lead role for obvious reasons.
But it does seem like the Germans are going to be, you know, at least the new
German government is seeming to take a much more aggressive role about the U.S.
and the German economy, of course, is still the largest in Europe.
So I think Macron and the new German head here is going to be quite a different
thing.
Of course, the counterpart is that you're going to still see Obama on one side and
Maloney on the other side, who are still quite pro-Trump.
Let's see which faction wins there.
Yes, and we've also got Keir Starmer, the PM of Britain, who's a bit of a lame duck
in my opinion,
but he's there right at this moment meeting with the orange man.
Anyway, I was going to talk about the Trump Gaza video, but again, it's very
distasteful.
Golden statues of that man who'd been made to look taller and slimmer as well by
whoever came up with that nonsense.
Anyway, the dollar round is 1846, which has barely changed in the last 24 hours.
British pound against the rand 23.32.
The euro rand is 19.24.
The euro dollar 104.25, which is a euro that has fallen by 0.3%.
The gold price, as Viv said earlier on, 28.79, which is a big move.
That's over $50 weaker, or nearly 2%.
Platinum, the same sort of story, but less dramatic.
A 9.65 down $4.
And Palladium down $15 an ounce to $9.16.
per ounce so the metals having had so much um good news for for a number of years now
not doing badly the yellow metal that is a crude oil is doing well though up two and
a quarter percent seventy dollars eighteen that's for west
texas and bread crude oil is seventy four dollars on the nose which is up just over
uh
two percent wheat price down two and a half i'm trying to looking for other ones
but uh no uh crb index is
down quite sharply actually uh taking a break you That's a 10-year bond yield.
That is 10.76%. The US 10-year. Oh, by the way, Viv,
you're a student of these things.
Yield on the 10-year has gone below the yield on the 3-year in America.
Am I getting this right or wrong here?
Anyway, it's an inverted yield curve now, and that says there's going to be an
economic slowdown.
I'll get the details.
But an inverted yield curve, Viv, what does that mean?
Yeah, basically, these yield curves indicate what people expect, of course,
the future payouts to be.
And if you are seeing the future returns being significantly lower than the current
returns,
then you are assuming that there is going to be a trouble ahead and we're going to
be forced to cut into ahead of that.
And so that, I think, is something to be aware of here.
But look, I am more uncertain about what's going to be happening going forward
because, you know, irrespective of what Trump is doing,
irrespective of everything else, I'm just so positive about technological changes
that I do think that, you know,
some of the growth rates we are likely to see in two or three years' time are going
to be, you know, just because of technological changes, it doesn't matter
who's in charge.
You invent the steam engine, your country is going to grow.
You invent computers, your country is going to grow.
You get AI coming about, your country is going to grow.
And I think that is one of the things that I'm thinking some of this is being
surprised at the moment.
Okay.
Actually, this is the story.
I got it wrong, not the three-year.
It says here, the 10-year Treasury yield passed below the three-month yield on
Wednesday,
sparking fears of an economic downturn.
An inverted yield curve, as it's called, is the Fed's favourite recession
indicator, David.
Yeah, yeah.
In fact, what's happened from zero rate cuts now, the market's pricing in at least
two.
And that's a big change from where we were at the last Fed meeting.
So, you know, there's certainly and
I still believe this has been triggered by consumer
confidence indices, which are plunging, you know, lowest in many, many years.
the result of uncertainty around Trump.
Nobody has a clue what's coming.
You know, when you start talking about tariff increases, who pays for it?
The consumers.
You know, they've got absolutely no idea what's going to happen.
To be honest, I don't even think Trump knows himself, honestly.
I think he's, unfortunately, the chips in his head get wiped out clean every night,
you know, like you turn off your computer.
Anyway.
I watch him, as you know, with a lot of fascination.
It's almost as though something comes into his head and he hasn't been listening to
other people's comments or anything and he just blurts it
out.
Last night he talked for, I think,
12 minutes non-stop with one question and the question that was asked of him took up
about 47 seconds
and then he goes off.
He's off.
He's rambling.
He's like a puppy.
You take him off the lead.
and he just runs and runs and runs.
He goes mad.
But the counterpart to that says, okay, look at Germany, right?
Run by proper grown-up people.
They still went out and put down their power plants when they were dependent on
Russian oil.
You know, look at Xi Jinping.
I think China's done well.
And he goes and destroys his local tech industry just as AI is about to happen.
None of these politicians know what they're doing.
They are just...
They're in a big...
Look at the UK with Brexit, okay?
Well caught out and smart about some things that you find.
Trump, on the other hand, the one thing that's positive about him is because he's
so erratic.
He doesn't actually do anything.
You know what I mean?
And that is the positive effect of him.
He says a lot of stuff but doesn't actually do anything, which might be
actually much better than saying a lot of stuff and doing something.
You've got to say, though, he's great fun, even though he's disturbing.
He's really, really good fun.
And when he goes, which he will, obviously, either, you know, as Viv, you
said on a couple of occasions,
he's obese.
He's at a certain age.
And statistically, he hasn't got that long.
I don't wish him that, of course, because I shall miss him.
But, yeah, what a man.
On the JSC today, Fortress B up five and a third percent.
After the property index yesterday had a bad day, Outshore was up 2.5%, Italtal up
2.1%, Tungela up 2%,
and Truas nearly 2% to the good.
Downside, the red ones, Motus down nearly 14% on the close after the auction,
Spa down over 7%, Harmony down nearly 5%, Sappy down just over 4%,
and Sibania still water in the red to the tune of 4%.
David, the closing indices, please.
Well, the Altair closed down 1%.
point one three percent with weakness right across the board most of it coming
from the mining sector platinum and gold shares
but overall the resource index down 1.7 um banks down
1.8 percent um the I'm just looking at the industrial index.
That was down 0.9%.
So, listed property up slightly, I think.
Some of the I'm not quite sure what lifted them.
I'm trying to find them as I talk to you.
But Fortress, perhaps one of them that added to that industry.
But, I mean, that's overall not a good day.
Volumes, $22 billion, still dominated by gold shares and by
NASPERS, which is still in demand by on a daily basis.
Every day is kind of the most traded stock.
That's about it.
Well, David and Viv, thank you very much for your time.
As always, fascinating insights from both of you.
David Shapiro is from Sasson Securities.
Viv Govender from Grand Swiss, both in Johannesburg.
And that was the 5 o'clock shadow.
The views and opinions expressed in these podcasts are those of Lindsay Williams and
various contributors and do not reflect the policy,
position, or opinion of any other agency, organization, employer,
or company associated with StrictlyBusinessPodcast.com.
Assumptions made on the analyses are not reflective of the position of any other
entity other than the speaker or the author.
And since we are critically thinking human beings, these views are always subject to
change, revision,
and rethinking at any time.
Please do not hold us to them in perpetuity.