You're listening to Strictly Business Podcast with Lindsay Williams.
JSC has closed its doors for another day, so it's time for the five o'clock shadow.
And as always on a Wednesday, I speak to Skulk Lowe, who's a portfolio manager at
PSG Wealth
Old Oak in Cape Town.
Skulk, we always say to ourselves before we come on air, we say we're going to make
it short this week, Lindsay, because I've got to do this.
And yeah, I agree, Skulk, I've got to do that.
And then we end up with a half hour chat.
I'm not going to say it this week because there's so much to talk about.
And therefore it will be a long chat, like it or not.
Can we start off with the JSC, please?
And a share...
You know so well.
I know.
The markets could be closed and it would still be half hour with you.
Skulk, tell me about the JSC and the Stock Exchange News Service results,
announcements, et cetera,
and a share called Kuro Holdings Limited.
What is that?
What's happened?
It's up 50%.
Why?
Yeah.
I mean, so let's firstly start.
They actually released the six-month end at results today.
And for anybody listening to this podcast now thinking that the results had anything
to do with it.
Nothing.
They were rubbish.
I know.
It was boring results.
I mean, revenue up 4.7%.
EBITDA was flat.
0.2% higher or something.
And I thought, what is this now?
Where's the sentence I'm looking for?
And then, there it came.
The firm intention announcement coming from Janne Merton Stichting.
They actually mentioned that they, and currently they own about 3.4% of Kiro.
And we know that some of the shares that they still hold is Capitec and our
company, PSG Financial Services.
And they came out this morning and said, well, that's it.
They are happy.
They want to make a firm offer to buy the whole of Kiro. Goodness me.
And remember, the share price closed at 8,13. Yes,
I've got it in front of me.
8,13.
And this, if you equate this, the offer, this is for listeners that didn't switch
on their radio,
didn't watch any Bloomberg or screens today.
Effectively, what the offer is, We're looking at about...
just show up 86 cents per share they're going to offer that and then they're going
to give you a bunch of for the offering
about capitex shares and also phd financial services and if you add all of
these together this offer
together it equates to on yesterday's closes to
about let's go to 13 rand per share for kiro and then there we go you know 8 grand
13 close yesterday
offer 12, 13, rant, Mr.
Market, just say.
Where do I sign?
And it was a wonderful, wonderful day.
What I found interesting, Lindsay, was I did have a bit of a pullback.
Now, we'll chat about the JSC in general, but the JSC struggled a bit.
Some of the resources, they were under pressure today, and the market was, let's
call it,
anything between half a percent to one percent down during the course of the day.
But Stadia interests me because when this announcement came out, I think for that,
let's call it an hour,
hour and a half after the announcement came out.
The company of Kiro, of course.
Yeah, Stadia was trading 2% to 3% higher.
So I think the market is looking at this and asking the question.
That's what I read into this.
I think they're asking the question, are we going to see
Jannie Maton Stichting stop at Kiro?
Or will they be looking?
to to to to bite into to stadio as well be there as a may let's not um change the
subject you know from
stadio to from kiro to stadio um and this is you know for the kiro shell that's
that's been sort of
waiting don't know should i be holding should i be selling i mean the share price
it's been uh sort
of not going going anywhere because as we mentioned that the the um uh the results
weren't that great.
I mean if we look at Earlier this year, end of last year, share price,
it was trading at 13 rand per share, twiddled down all the way to 8 rand.
And yeah, today, what a movement.
Very nice.
You can just imagine an investor that just receives a phone call saying, Mr.
Lowe, we've got your stockbroker on line four.
Okay, put him through.
What's he got now?
And he tells you that news.
It must be wonderful.
What a lovely call to make.
Oh, no, I think it's, well, you know, if you bought it in the past, it's got two to
three months.
It's a lovely call to make.
But as I mentioned, I mean, if you had the stock, you know, for many, many years, and
when I say many, many years,
let's say if you had the stock for the past 10 years, I mean, the share price
literally 10 years ago,
you know, what it was trading around about, let's go to 25, 26.
I thought around 20.
Yes, yes.
I remember that.
It was all the rage.
Now, there's two things you can say here.
This is a vote of confidence.
in South Africa because it means that there's going to be lots of people that
have enough money to send their kids to the type of education that Kiro
Holdings offers or it's a vote of no confidence in the government because they
can't provide it yeah I
think um be
that as it may I know um enough okay I know Yanni Matone is not but I know
the people at at uh let's call it the the animatron Stichting, they still look at
at great opportunities so that they must look at this not just in terms of uh no
confidence they still i think they look at
at the whole cure it's got a business um thesis that it's
it's still positive going out you know looking at the future okay
very good big corp also out with results share price down about three and three
quarters percent what happened there
uh let's say At first glance, I don't think that BitCorp's results looked bad.
I mean, when you look at the EPS, EPS came out
25,000, 63.
I've got consensus in front of me, 25,000, 45.
So that's a slight, slight beat.
When you, and I know you love doing this, when you take your financial results, you
usually go straight to the end,
the outlook.
and the management outlook and overview, they actually mentioned very,
very lightly that the food inflation is ticking upwards.
Now, when you're a consumer, you don't want to see food inflation goes up because
that'll hurt your pocket.
But for a company like Bitgob, providing this food, producing these food,
delivering these foods,
food inflation is naturally positive.
So.
They did show a positive outlook.
But I just think the market, I mean, this is a company that's always been trading at
a,
let's call it a higher multiple.
It's a company that I love.
I'm not invested.
Cards on the table, I always want to be invested.
It's like that, let's call it the clicks and those type of companies that's trading
at higher multiples.
That's great management.
And it's a well-diversified company.
You know, for the listeners out there, they...
They produce or deliver food to restaurants.
And when you look at their revenue per region, Europe makes up close to, yeah,
a little bit more than a third of the revenue.
The UK is about 29%, Australasia 19%, and the rest is emerging markets.
So you've got such a well-diversified company,
giving you income of close to, when I say income, that's dividend.
to two odd percent that was up 6.4 so yeah i i think it's just i think the market
just
expected more there wasn't there wasn't any good enough reason for me for the
share price to to be hammered you know two two and a half
percent today but market market just uh maybe expected more okay
what else we got the fmac came out with an update share price down to an opposite
nice company outshurants came out with a
voluntary trading update share price up by two and a half percent So we have to clear
the decks now.
and I have to sound the trumpet and congratulate you on your sassle call
because after its
results, this thing was up 10% on the day a couple of days ago.
Scott, well done.
I'm just scared to talk about it again.
You talk about it.
Go on.
Give us the pertinent salient points.
I was very sceptical about this, but goodness me, what on earth sparked this?
I mean, we had a guidance, didn't we?
I gave it the kiss of death.
Now, I thought for the listeners out there, why are we sort of tongue in the
cheek?
I mean, I came out and this is one of my stock picks.
I was verbal because it's been a company everyone knows that's been under so much
pressure over
the past, let's call it 18 months.
And then I think about three or four weeks ago, I just blew the trumpet.
I said, this is the time.
I think it's time to get back into social.
I'm not f***ing with you.
I think the next day it dropped like 10%, 15%.
So, yeah, I'm not going to say anything.
I'm not going to give any calls.
I'm just saying that results actually surprised on the upside.
I mean, it does seem like things are improving.
I mean, the free cash flow, that was up 75%.
The net debt, now remember we know that they had this inflow,
that transit money that they paid them.
There was a few inflows to the net debt.
That's down 13%.
That's the biggest worry.
But, I mean, turnover was up 9%.
Every DAW was looking better.
I mean, everything just looked better in general.
And they did guide.
I think it was about two weeks ago, a week and a half ago, they did guide.
But the actual results that they released eventually came out on the upper band of
the guidance,
which is always good for a company like Sasol.
Yes, it is.
But anyway, well done.
What is it trading at now on the day?
It was about 120, the results day.
Where is it now, Skunk?
Yeah, I'm not going to get away with that one so easy.
Today it's down 2.8%, following most resources companies, trading at 115 rent,
05.
Still, I mean, that was just a trading thing and short covering and everything
with the results surprise, but very good.
It's established a new trading band, I think.
Now, the other one that we briefly ought to mention, which is not for widows or
orphans or both, Blue Label Telecom's down about 17%
after results.
I don't know what's happening with this company.
I don't know.
I just wouldn't touch it.
And that's nothing against the two chaps that started it.
Yeah, I mean, OK, I'm not invested.
I don't know enough in the company to give really a solid recommendation.
I mean, one should just remember that this company has done close to 180% up to
yesterday, year to date.
So it's been on the JSC, been one of the star performers.
Again, I don't know enough, but looking at the results, and I did look at the
results,
it looked pretty good.
I don't think that, you know, when you look at the revenue.
That was up, let's call it 7%.
The gross profits, that was up.
Margins were up.
Core headline earnings, that was up a crazy amount.
And they actually came out and said, well,
they're looking at doing a separate listing for sell C in October.
So that, I think, would be a positive sign for them.
But the market sort of took this and immediately after the results came out, it
dropped just over 6%.
And then, as you mentioned, it just went from bad to worse because, yeah,
you mentioned share price down 17.8%. Again, it's not one of the most liquid
companies.
It's been a company that's been under pressure.
And, yeah, we'll need to see what's going on there.
Okay.
Let's move to the United States now.
And the good old day, Skulk, when I started and probably you started as well,
I used to look forward to...
an event you couldn't schedule a lunch on jobs day which would be the first friday
of the new month the us jobs
non-farm payrolls number then you got inflation sort of taking over in
importance so you couldn't have lunch on
cpi day now you have a look at both so that's two lunches out the way and now
you've got a at least you don't have to worry
about lunch because you have to watch nvidia because it's eight percent of the s
p and its results are out after the market
closes tonight an important event if it's eight percent of the s&p it affects
everything
it's it's going to be massive
um i i mean it seems like i'm giving giving david um you know free mileage
every
week now but i mean i don't know did you ever chat with him at lunchtime again
today yeah yeah we
had a conversation and and i
said well anything you you're watching and he says yep nvidia i mean I'm calling
NVIDIA.
I'm telling you, by the end...
of today, I'm going to quote, unquote, it's either going to be up 10% or it's
going to be down 10%.
I'm leaning towards the up 10%.
I think, of course, you just love his techie stuff, but that, I think,
is the best explanation of what to expect for Naveed.
We know that there's some let's call it the beat thus
far.
I mean, 80% of the companies that reported on the S&P 500 beat.
And some of these big tech companies, we're talking about the likes of the
Metas, those companies did beat as well.
So
I would be really surprised if they disappoint and not beat.
It's just going to be, you know, what type of...
It's the outlook that is really the key.
This is when my philosophy of going straight to the end of the results and
reading.
really comes to the fore because everyone will say goodness me they beat analyst
expectations then you go to the end and the boss says things
don't look so good for the next six months because of uh policy uncertainty or
whatever he says that'll be the key skulk
yeah yeah yeah this is a 4.4 trillion dollar company and as you mentioned makes
up over
yeah yeah yeah and it makes up over 8% of the S&P 500.
And, I mean, it's...
done phenomenal this year i don't have the growth right but i think it's up
28 or 30 again this year so it's it's uh it could be even more um but it's it's
it's been a
crazy growth so yeah you're right it's gonna it's gonna be the outlook um you you
need
to really really hit the ball on it on the the sweet spot in a if you have four point
four trillion
dollar company and at the growth rate that we've seen over the past few years let's
see i think i think it's going to be
it's going to be fun thing to to to watch i i do think it's going to be sort of a
non-event for for us africans because they're only
going to report after the market close but uh
yeah let's see see what happens until then okay very good actually
we got through things quite quickly by by our lofty standards so let's go now to the
markets yeah we're still uh
anyway it doesn't matter what we Let's have a look at the market because I got
the dollar round at 17.72, barely changed.
The British pound against the round is 23.87.
The euro round is 20.57.
The euro dollar is 1.1610.
That's a dollar that is quite a bit stronger than this time yesterday.
But, yeah, it's waiting for all sorts of different things, notably the Fed in, what
is it, a couple of weeks' time.
But anyway, what else have we got?
We've got the gold price.
I've got some interesting gold news for you, actually.
And actually, I'll tell you off air, because otherwise we're going to be here
until after my dinner time.
The gold price is 33.89, which is down slightly.
Now let's go to the white metals.
13.47 for the platinum, barely changed,
and palladium just up a tad at 10.99 and a half.
Crude oil had a horrible day yesterday, down over 2%, 2.25% in fact.
It's clawed back 0.7% today with Brent Crudeau of $67.67 and West Texas
$63.75, $63.75 per barrel.
The Bitcoin price was below $109,000 yesterday,
currently exactly $112,000.
And the US 10-year Treasury bond doing quite nicely, the yield falling in other
words,
just over 4.25%.
S&P 500 futures.
64.91 that's the september futures up nine points but it means nothing because
everyone's waiting
for nvidia south african 10-year bond is below 960 just by by 50
basis points 5.5 9
5 skulk let me give you my ups and downs on the jsc and you can agree
with them and add a couple of your own i've got to the upside aspen
The much maligned Aspen is top of the board, up just over 6%.
Woolies up 5.75%.
Richemont up 4.2%. Kumba Iron Ore,
don't forget to remind me to tell you about Woolies as well off air.
Richemont up 4.2%.
Kumba Iron Ore up 3.75%.
Carew up 2.8%.
Blue Label down 17.75%.
Sebanier is just over 5.5%.
Weaker, Valterra.
uh formerly anglo-american platinum down 5.4 implants down four and a quarter and
african rainbow minerals down
3.7 so the white metals getting getting stuck today yeah none of them are extiffs
that's uh yeah that's that's usually surprising if you if you read those type
of movements in the market usually one or
two sticks out as being an exter, but none of them, none of them, exter for today.
Okay.
Have you got any others apart from those ones, or did I cover it?
No, you covered them all.
Very good.
Okay.
In that case, give us the closing JSC indices, please.
So the JSC for today, as I mentioned earlier, did close down,
so down 42 basis points at 102,007 points.
Resources down 74 basis points, while the industrials were down 58 basis points.
both the financials and the SA property index bucked the trend.
They were up 17 basis points and 34 basis points respectively.
When you look at the daily trade, value trade through the market, not a bad day.
Well, it's not your close to 66 billion that we saw yesterday,
but I'll take the 24 billion for today, any day.
Very nice indeed, Skalk.
Thanks very much for your time.
We kept it down to...
20 minutes and 50 seconds.
Congratulations to both of us.
Skalklo is a portfolio manager at PSG Wealth Old Oak in Cape Town, and that was
the 5 o'clock shadow.
The views and opinions expressed in these podcasts are those of Lindsay Williams and
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