You're listening to Strictly Business Podcast with Lindsay Williams.
The JFC 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 Skullclo, Portfolio Manager at PSG Wealth
Old Oak in Cape Town.
And so we wait for next week, Skull, because every article you read is, well,
we've got the Fed next week and everything.
But there's a couple of things that are influencing it, notably inflation.
We got the CPI tomorrow, I think, from the States, and we had PPI today.
Which, strangely, came in below expectations.
Yeah, and then you've got the worries in Qatar.
I mean, that you can add to this escalation.
So, yeah, there's a few uncertainties for sure.
That's it, yeah.
So, anyway, that's all going to happen next week, plus a couple of hours.
And Thursday morning will be the time when you're furiously phoning your clients
saying, I told you so,
they've actually raised interest rates, didn't cut them.
and the market's collapsed 8.3%.
Where are you coming from, Lindsay?
It'll never happen.
So the CME Fed tool as we currently stand, I mean, it's creeping up every day.
For the listeners out there, we've had this conversation for a few weeks, how
it's gone from the one moment,
the probability is as high that we'll see a cut.
Eventually it came down.
And now it's...
It's 100%.
We know it's 100%
probability that we'll see the Fed cut rates for the first time this year on the
17th of September in exactly a week's time.
But, I mean, the CME Fed tool actually has changed now.
It's actually now showing us there's a 90% probability that they're going to cut by a
quarter of a percentage.
But there's actually a few economists out there stating that, yeah, we're looking at
a 10%.
probability now that we're going to see half a percent so that's going to be very
very interesting no no no not gonna happen it's
far too drastic um skulk the other thing we need to talk about and it's an
interesting one is
anglo-american plc because a couple of days ago i suddenly saw this thing
flashing up they've done a 50 billion
dollar deal and
it's called tech and it's it's it's very much skewed towards one commodity isn't it
and
that's copper Yeah, in a successful deal,
you would always like to see that math calculation, the one where 1 plus 1 equals
3.
And when I look through this deal,
and I've said it today to someone that the proof of the pudding is going to be in the
eating.
If this deal goes through,
we're going to see how the new Anglo and tech combination is going to…
But as they've already mentioned yesterday in the announcement,
is that they foresee the combination of the two companies could see these combined
companies
mine an extra 175,000 tons of copper per annum.
Now, that already to me is a one plus one equals three.
So I think that's going to be an interesting thing to watch.
Moving the head office to Canada or Vancouver.
Yeah, that's a really, really interesting move.
But I think it's going to be a very, very interesting merger.
I think the biggest thing for me is going to be the effect on the JSE because
when you look at the JSE and more specifically the weight towards resources,
this is going to see an increase for the JSE's weight towards resources.
So.
Yeah, I think most analysts out there are going to need to know this stuff on recess
going forward.
Yeah, there are two hurdles that Anglo-American and tech need to get over,
and that's the Canadian government and also shareholders.
But I don't think, bar from a few clauses being changed,
I don't think there'll be any obstacles to the merger.
What do you think, Skulk?
No, I doubt there's going to be any.
any major major obstacles i i can't see that any competition commission um will
will say that
this although this is going to be quite a substantial and a massive massive you know
company
i mean in the in the uh
it's a copper copper site i've already seen some indications that this will be
one of the top five largest
copper producers in the world uh but i doubt that this there's going going to
any individual or company or even country saying that this deal can't go through.
I think from an African point of view, it's going to be fairly sad.
But I mean, this is sort of the Anglo-Gold playbook as well.
We remember a few years ago, and I think this might be already five or six years
ago, Anglo-Gold,
and that was previously inside the Anglo-American portfolio or stall.
Yeah.
They got rid of every single South African gold mine, sold it,
interesting enough, to Harmony.
But they got rid of all the South African gold mines and today pretty much got no
holding within South Africa,
although still listed in South Africa, or secondary listed in South Africa, don't
have any South African gold mines.
This could be interesting for Anglo-American because they're only
holding this new...
Massive conglomerates going to be owning, when I say in South Africa,
is only Kumba iron ore.
So, yeah, the question begs, will they be keeping it?
Is it something that they will be focusing on expanding it?
Because, yeah, I think all the Kumba iron ore shelters could just have a look and
see what happens to Kumba.
I hope this goes well and I hope that the copper price goes up.
because this is the second South African company which is linking its lot to copper
because Harmony
Goldmine is acquiring MAC Copper Limited for
$1.03 billion.
Okay, it's not a huge deal, but it's a decent one.
And it gains a copper mine in Australia as well,
which I mentioned to you last week about Harmony having a look at copper.
Now Anglo-American, obviously.
doing more than having a look at copper and yeah everything is everything is
geared towards the
electricity production as ai needs more electricity as electric cards needs more
electricity it's got to be clean energy so copper
is a major part of that so what we're going to do every time we speak now with
the numbers is we're going to go
through the normal one gold platinum palladium of crude oil and then we're
going to have copper as well we have to have copper
Do you agree with that, Scott?
We'll need to have it.
We've got to have copper.
Yeah, we'll need to have it.
Definitely.
We'll need to have it.
I actually found us Africans to be really, really funny, Lindsay.
I mean, something happened, some big event happened, good or bad.
One of the first things usually happens is, you know,
us Africans will make some joke about the event.
And yesterday was no different.
And I think the tweet of the day.
Go on.
And I need to give him props.
was Pitfall Yoon's tweet on this deal.
And he just said, I don't have the tweet in front of me, but I'm going to sort of
guess,
sort of more or less the tweet.
He said, this must be sort of the kiss of death for copper.
Yeah.
Because Anglo-American has become the Jim Cramer of South African investments,
getting it wrong consistently.
See you now.
I mean, this is out there.
I mean, we know, I mean, since I think pretty much 2008-ish, I mean, Agner
American did get it wrong.
I mean, there was a few times over the past 20 years where this company got so
close going bankrupt.
And they got some of these commodities, you know, incorrect.
But I think this time around...
They got out of platinum just as the platinum market started to turn, of
course, didn't they?
Yeah, exactly.
Exactly.
So, I mean, Anglo-American, the dream grammar of South African investments or,
you know, international mining houses is, I think,
the tweet of the day.
Well, let's watch this thing.
As I said, it's been all over the place with Trump pushing it up 20 percent and
then down 20
percent on the COMEX in New York.
It's settled down now a bit, but we'll come to that later on and have a look at
the moment on other companies.
And I know you want to talk about GrowthPoint because you like property,
don't you?
Yeah, I love property.
It's been kind to me over the past few years.
It's been one of those companies which I also sort of had in my portfolio as one of
the star
portfolios, overweight positions that I had.
Results today, I thought, looked pretty decent.
I think I had a few comments in my team this morning.
The one was boring.
The one was...
oh, it's just too simple.
And again, there's another saying that goes, you know, simple is safe.
This was a solid set of results.
Revenue up 2.2%.
Your distributable income, that was up 3.1%.
Look at the dividend, that was up another 6.1%.
Things that stood out for me.
I mean, this company's still got a NAV of 19 rand, 88 per share.
That's putting it at a, let's call it just sharp, a 28% discount.
to its next asset value.
When you look at over the past, let's call it 15 years, and let's exclude that
period,
that 2008-2009 period where it was just absurd levels,
where the likes of
GrowthPoint traded 120-130% NAV.
I mean, let's exclude that.
If we look at the past, let's call it seven, eight years,
this company has come from a 2000...
and 2018,
2017 levels of just over trading at NAV to now still trading 28%
discount.
I don't think it's expensive.
It's still trading at a forward dividend multiple of
9.5%.
That's a great return.
I mean, that's giving you very similar interest than...
than the current long bond rate.
So that's always a, it's called a big plus for me.
They mentioned that things are looking good.
They specifically highlighted the fact that the V&A waterfront is expected to
deliver
double digit growth within the financial year in 2026.
Despite these renovations that they've got, and we know looking beyond that, this
is still one of the best, one of the best, I would say,
one of the best.
properties in the world.
So, I mean, if you're a holder of GrowthPoint, I would definitely not be in
a rush to sell it.
I mean, not at a 9.5% dividend yield.
And if you're not holding it, just watch it.
If you want something simple or boring in your portfolio that's just going to juggle
around, I would definitely be looking to increase my holding.
Old Mutual also came out with results today and the share price is actually
doing quite nicely, up about two and three quarters percent.
Are you a fan?
Did it do well?
Tell us more.
Yeah, it was good.
I mean, today, that's another thing.
I mean, it's just to me that this is not a company that I'm owning.
And I'm struggling to see a massive investment case.
So the results were pretty good.
I mean, I thought it was not too bad.
But I struggle to find where they're going to be seeing their growth.
I mean, I know they're trading at fairly low multiples.
If you're looking for a company that's because the company is trading at, let's
call it, 6%, 6.5% dividend yield,
that's a big plus.
But at ROE, return on equity of over 13%, I mean,
it's just such a low-growth company.
And besides buying it for the dividend and just some capital growth, well
This is the company that I would say is a little bit too boring for me currently.
I prefer Sunlum. Sunlum's set of results came out, I think, last week or two weeks
ago, if I'm not mistaken.
And there they've shown a sort of a stronger migration towards financial and
investment services.
That I did like.
So, yeah, not a bad set of results coming from Mutual, but I still prefer
Sunlum at current levels.
Okay, that's a couple out the way.
But the one that didn't do so well was Metair because the share price down nearly
10%.
Metair fell off the radar, didn't it?
It was the darling with the battery business and Turkey and everything.
What happened?
No, I don't follow the company at all.
I can't give any comments.
I've got a similar view.
I know the company wasn't.
you know consistently and constantly in in in the media and the newspapers on on you
know these
let's call it the you mentioned the battery side um but yeah i just saw this
morning the results
didn't look too good didn't look too good at all okay well we didn't get to the
bottom of that one but uh yeah just to let you know if you are a
shareholder watch out because uh there's some fallout from those results 10 today
so well so far the market is
closed What else have we got to look at, Scalp?
If you have to look at gold, it got close to $3,700.
Yeah, just like it.
No, it's, I mean, we've got a few things playing, you know, absolutely towards
gold.
I mean, the one moment you sorted off the show stating that all eyes are now on the
17th of September.
I mean, we've seen Trump, President Trump come out.
I think it was yesterday or the day before.
And when I say come out, it was again, it was a tweet he brought out.
Where he absolutely pummeled it, Powell again, went into him and said,
well, you were late increasing rates back in 2021.
Now you're absolutely behind the curve and late reducing rates.
What does he know?
Come on now.
I know, I know.
And he's putting so much pressure on the Fed.
And I don't say that Powell and Neshe succumb to that.
to the pressures but you can see it's it's definitely having an effect mr market is
telling us since that tweet
You could see, and that's where this probability suddenly increased from the
quarter of a percent to even a half a percent.
Nobody entertained the half a percent.
You and I had this conversation, I think exactly two weeks ago, where I said, this
will be, I think,
the most interesting play.
I mean, if we see a half a percent on the 17th of September,
I would not be calling tops in this market anytime soon.
And here we're sitting, it's a 10% probability.
There's still a week to go.
But there's two ways to look at that, Skulk.
If you say, well, 50 basis points, they've never done that.
Or the last time they did it was in 1932 or something like that.
I don't know what the number is, but I've never seen a 50 basis point cut.
But then my memory is going.
25 basis points is all we've dealt in over the last few years.
There's two ways to look at it.
Yes, that is absolutely fantastic cheap money, and it's great for growth stocks
historically.
Yes, it is.
but if he did that it would shock the market and it's a wait a second what do
you see do
you see that 911 000 jobs that is going to be taken off the payrolls data that we've
already got by
the bureau of labor statistics so that means 76
000 jobs a month less than the ones that were reported they're looking at that and
seeing a deep deep problem in the labor
market so if they are then people say that's not good for that's not good for
corporate profits let's sell so there's two ways of
looking at it.
the pessimistic way, which is in the minority, or the optimistic way, which
undoubtedly would win, I think.
Yeah, yeah, for sure.
But I think it wasn't that this comment you mentioned, I've never seen this and
I've never seen this.
I mean, I can just tell you, I mean, President Trump entered his second term,
you know,
on the 21st of January this year.
And since then, I've had a few things which I've never seen in my life before.
So, I mean, and one of them, him being quite vocal on how bad,
you know, his chairman of the Federal Reserve, you know, is.
I mean, anything can happen.
I don't necessarily say that that is going to happen or, you know,
will be good because I don't think it will be good.
at all.
But I think this is one of the reasons why we've seen gold react over the past few
days,
because we can clearly see there's going to be pressure on reducing interest rates
and reducing it quicker than
let's call it expected.
Then secondly, I mean, we've mentioned it as well.
I mean, Israel now going against Hamas in Qatar,
that's also a big one.
And I think everybody is worried that that could
again escalate you know further so um yeah gold price there we go three three
thousand seven
hundred i'm just putting into i'm just putting into a microsoft while you chat
away i'm just putting into microsoft
co-pilot when did the fed last cut
rates by 50 basis points see what this thing comes up with incidentally while i'm
doing that i put in two
new ai apps on my phone today one is called perplexity and the other which is
american
And the other one is Chinese called Deep Seeker.
Do you use either of those?
Yeah, I use the usual suspects.
But don't disregard grok.
No, I've got grok.
I love grok.
Yeah, so grok, I love using grok as well.
But yeah, all those that you just mentioned, I do use them.
The most recent 50 basis point cut half a percent by the U.S.
Federal Reserve occurred in September.
and...
September the 18th, 2024.
I told you my memory was going.
September the 18th, 2024. This was the Fed's first rate cut in four years,
bringing the federal funds target rate down to a range of 475 to 5 percent.
Oh, OK.
So that was it.
Oh, of course, you know, that was probably politically motivated because that would
have been Biden's last
Fed.
meeting is that correct yeah yeah that that is correct yes yes
almost or this or the penultimate one yeah yeah okay so that was it politics but just
again while you were you were going into i
did the same i mean here's also a few things which which um
which Trump actually said over the past, let's call it, year.
You mean lied about.
You're talking about his lies now, aren't you?
No, no, no.
I'm just having things where you just can't believe he will actually say this.
For instance, I looked at Powell.
I mean, in May, he said, too late,
Jerome Powell is a fool who doesn't have a clue.
Now, this is one of the things.
So then he got branded as Jerome Too Late Powell.
So he's referred numerous times,
he's referred to too late Jerome Powell.
And then he'll go off.
And then, I mean, what was it, August last month, and this one I remember,
in a truth on his social post, he slammed Powell and says that
Powell is one of the dumbest and most destructive people.
Huh?
Are you kidding?
You can't say that.
That's just rude.
It's ignorant.
It's piggish.
It's actually a disgraceful display of disrespect by Donald Trump.
Yeah.
OK.
Let's have a look at some markets now, Scott, because I like the RAND.
I like the RAND below 1750 against the US dollar.
That's a 1.3% fall for the dollar against the mighty local currency.
Well done to the RAND.
British pound against the RAND, 2368.
That's the pound down a quarter of a percent.
and the euro round.
It's 20.49, down nearly half a percent for the euro.
Well done, the Rand.
Euro-dollar, 117.25.
That is a euro that's gained 0.8% against the US dollar.
British pound, 135.40.
I'm surprised it's so high, especially with the political machinations going on
over there.
The gold price, 36.48 which is gosh
Up 21 it says here, I hope that's right.
Platinum is up $24 an ounce to $13.95, that's 1.7%.
The star performer of the white metals is palladium, up nearly 7%,
$79 an ounce to $12.21,
only $170 away from parity with its larger trading cousin, platinum.
Okay, I promised you that we would add copper to our list, so let's start with
copper today.
Copper is $4.55 per pound in US dollars.
As I said, it's traded on the Commodity Exchange in New York rather than the
London Metal Exchange.
1.1% higher today.
Brent crude oil is $67.37, 1.5% up.
And West Texas is $63.63, up 1.6% on the day.
So commodities doing...
Very nicely.
South African 10-year bond yield is 9.48%.
You know, early April, it was 11.08% scale.
I mean, what a move.
150, 160 basis points for the South African 10-year, the yield to the
downside.
US 10-year also doing very well indeed.
406, 4.06%.
That was in the 440s only, what, six weeks ago.
And then the S&P 500.
Let's go to the stock market now.
It's chugging along as it tends to do, up 0.4%.
The S&P futures 6,547.
They're almost the spot month now.
And finally, Bitcoin is also doing well, up 2.6%
to 113,813.
So, nice day, Skulk.
What have been the movers on the JSC individual stocks-wise, please?
so we heard We had Anglo-American move again today, another 2.6%.
I'm not going to look at top performers for now, but we had Anglo-American move
2.6% again today.
And also Rimgrove.
Rimgrove brought out a trading statement.
This is one of my darlings as well.
Really great guidance, great, great upside.
It seems like they're going to see the heaps grow quite substantially.
And that move with Rimgrove also up.
2.3%.
Yeah, I mean, I think the things have stood out.
You mentioned the likes of the PGMs, which naturally help the likes of the Impalas,
Volterras, those companies move up slightly.
But, I mean, it's been dominated by gold, as you mentioned, with the gold price
running.
Yeah, look at the golds.
I've got the top four.
Sorry to interrupt.
I've got the top four and the top five gold diggers.
DRD up 4.5%, Anglo Gold up 4.3%, Harmony up 4.25%,
Goldfields up 3.8%, and then coming in fifth, another one that you like, Growth
Point up
3.1%. We'll come to that in a second, but let me give you the downside first.
It's Altile down tip.
10.6%.
Alphamyn down 7.25%.
Wilson Bailey down 6.5%.
Nepi Rockcastle down 5%.
And ABSA down 4.5%.
Any ex-divs there?
Because it looks suspiciously like there should be.
It's been a very bad day for the banks.
It's just been...
But I'm into your question.
Yeah, Standard Bank was one.
APSA is one as well.
ItalTal, I don't know if you mentioned ItalTal.
Yes, I did.
10.6% down.
Why is that?
No, that's also, that was a 1.20 dividend.
It's just an ex-div story.
Good.
And just by the way, here's an interesting factoid.
I mean, I think you mentioned Goldfields is one of the top performers, if I'm not
mistaken.
Yes, I did, up 3.8%. Yes.
But you need to add another seven rand because that's also been an ex-dev story.
Oh, no, sorry.
You know what?
It's not.
It's not an ex-dev story.
I just thought for a second.
This is great.
No, it is.
Here we go.
I can see it.
Last day to trade.
It's a seven rand today.
It was yesterday.
Last day to trade was.
So it knocked off a seven rand.
dividend yesterday and then still managed to increase by 4%.
But here's where I want to get to.
I mean, this is just crazy stuff.
It's absolutely bonkers.
You've had Deben Riddipo did, which was up 4.5%.
Year-to-date performance with currency, it's 135%.
You had Anglo Gold second, was 4.4% up today.
Year-to-date performance now sitting at 172%.
How many?
Up today, 4.3%.
Year-to-date, that's a lag, but still, that's up 80%.
Goldfields, which we mentioned, traded extra, still up 4%.
That is trading up currently 163% year-to-date.
And what was it?
Pan-African Resources.
Pan-African Resources, they're sitting at 122% for year-to-date.
This is just...
crazy crazy performances you know coming from from our gold diggers just absolutely
dominating
dominating the market this year i remember the late dr clive roffy talking to me
about drd gold and he used to bang
on about it i think it's about five round a share at the time of gold shares were
you couldn't give them away and he always said it's going to 50 round a share
lindsey well
that was 20 years ago so i mean yeah and he's dead now shame poor thing um but uh
He actually passed away just prior to the gold run actually started.
It was actually so sad.
It was, because he was the ultimate gold bull.
I don't know what his charts would be telling him that it would go to now, but
I'm sure it would be something very, very glamorous, Skulk.
Okay, I think that's it, apart from you giving us the closing indices on the JSC
Securities Exchange, please.
So the JSE today closed slightly up 35 basis points at 103,588 points,
dominated by the resource index and most probably dominated by the diggers, you
know, up 2.75%.
Industrials, they were down 32 basis points, while financials, they were down
70 basis points.
Essay property, a little out from growth point, that was up a quarter of a
percentage.
When we look at the value traded going through the market today, Well, 24 billion
traded today.
Not a bad day at all.
Very good.
And not a bad analysis from Skullclaw, who's a portfolio manager at PSG Wealth
Old Oak in Cape Town.
And that was the five o'clock shadow.
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