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 Glo, Portfolio Manager at PSG Wealth
Old Oak in Cape Town.
We didn't speak last week because of a public holiday in South Africa, Skulk.
But what's happened since we last spoke two weeks ago is the same old story.
Things that have been going up.
for a few months now, a few weeks now at least, continue to go up and it's all
fine.
Everything's fine and well.
That's an understatement, Lindsay.
We'll come to what you're talking about in a moment.
But just generally speaking, nobody seems to care about anything that's thrown at
them, market participants that is.
No, no, no.
No, markets enjoyed in general one of the best Septembers in years.
After, I mean, we went into September.
I can't believe we're sitting here, Lindsay, on the 1st of October.
Fourth quarter, yes.
Yeah, talking about September as a distant memory.
Oh, man.
I'm still going into 2025, as you just mentioned, going into the fourth quarter.
But, I mean, what a first, let's call it,
nine months it's been.
I mean, there is a...
close to 32% up year to date.
I mean, that's just crazy to think about.
I mean, and the month, last month, it's just crazy.
I mean, in Rand terms, we've done 6.6% last month alone.
And if you put it in dollar terms, it's even more.
It's like 8.3% in dollar terms compared to the MSCI All Country World's performance
of...
Also, in dollar terms, 3.6%.
It's been a great, great month, but definite trend, trend towards emerging
markets in general.
And when we look at the MSCI Emerging Market Index in dollar terms last month,
also outperforming the All-Country World Index, not doing what South Africa has
done, but at 7.2% for the month.
I think any investor out there would say, where do I sign if they can get those type
of performances?
September, of course, is statistically the worst month if you go back 150 years or
something.
So that's the exception that we've just experienced that proves the rule.
And October has got a reputation.
It's got a bad reputation, but generally isn't too bad.
So maybe those rules will be reversed.
Maybe October, like the seasons are changing with climate change.
Maybe the trends on the stock market are changing, Skull.
And we're going to get a big wallop in October for some reason.
Although the jobs data today from the United States hasn't phased anybody.
And the U.S. government shutdown hasn't either.
So what are you going to need?
What are you going to need to stop being bullish, Skulk?
Evidently, I love a lot more.
Evidently.
Because, I mean, there's a few government employees out there that will argue and
say, well,
I'm most probably not going to get paid.
if things go on the way it's going.
And I'm talking about the US government employees.
I mean, yeah, it's a crazy, crazy environment.
But for now, I mean, it's just wonderful to be in.
I mean, to give the feedback, the general optimism.
And actually, I mean, I mentioned it.
I mean, we're talking about growth assets or assets that should be growing well.
But I mean, listen to this, Lindsay.
I mean, we talked about the 6.6%
growth in the JSE.
And if you take in Rand terms, the emerging market index has done close to
5%,
4.77% to be exact.
But I mean, local bonds, the return for September, 3.3%.
If you invest it in global bonds, I'm talking about global.
The Govey Index, 2.1%.
I mean, so, you know, even the two, let's call it less risky assets, local bonds and
global bonds,
they also outperformed the MSCI World Index.
So, yeah, it's been...
Well, the last quarter for bonds was extraordinary, Scott.
I mean, you talk about them being...
I mean, the whole behavior of bonds has changed in recent times, I believe.
Let me just have a look at this chart I'm trying to get up.
There we go.
The one year.
No, let's go six months.
Let's go back to Liberation Day.
Back just after Liberation Day, the South African
10-year yield got to a high of 11.165%.
Just after Trump stood up there with that ridiculous cardboard thing that he had,
went to 11.16%.
Currently 9.17% and did go close to 9%.
That is a massive 150 basis points nearly, Skulk.
More than 150 basis points.
And it's a staggering return for what is supposed to be a staid and boring asset
class.
Exactly.
That's where I might get to.
So it's an environment where
I think clients are just flourishing because invested in risky assets or
growth assets like equities, local and abroad.
um Or, you know, less risky assets like bonds.
I mean, even, I want to say not just even less risky, I mean, more your conservative
type of investment.
I mean, bonds, global bonds.
I mean, if you look at international bonds,
global bond index in round terms over the past 12 months has given you a return,
a total return of 23% over 12 months.
Oh, man, what a pleasure.
What a pleasure to be in.
So, yeah, it's a great, great, but where I want to get to, I mean, is, you know,
the commodities.
I mean, the resources.
I mean, this has really been helping South Africa a lot.
I mean, do you want to take a guess, just a wild stab?
Yes.
I mean, I've just told you that the market has grown.
The South African market has done 6.6% in September.
You want to take a wild stab and say, what did the
RSI index done over that same period?
In September, just the month of September, not the quarter.
Okay.
And you can go wild.
12.3%.
That is wild.
That's pretty much double what the JSC has done.
But you need to go more than double what you've actually just said because the RISI
index did
28.1% a second below.
Yes.
Wow.
Yes.
Year-to-date, 121%.
Take it and run.
Come on now.
Don't look at your job.
Get off.
Off to the Bahamas.
Take your money, take your client's money, some of it, and say, we've got to do this.
It's responsible investing.
What am I doing telling you what to do?
But I mean, when I see those sort of numbers, and if I'd been away on holiday
and hadn't looked at the screen, I'd say, thank you very much.
You know what I mean?
No, no, no.
No, for sure.
This is the environment.
This is typically, I mean, we as investment professionals,
usually you've got these reports.
Things like, for instance, if you've been out of the market for the past, let's call
it,
best 20 days out of the past 20 years, how your growth would have dropped, etc., etc.
But I mean, this is just a proof, you know, the proof of the pudding is in the
eating.
This is case in point.
If you sort of got hesitant a few years ago and you said, well, I'm really not
interested.
This market is making me worried.
so the african environment politically is not looking good or just end of last year
said well we've
done done done done a hell of a lot let's let's get out of the market i mean year to
date you would have missed pretty much a solid
set of return but we
are a a commodity producing country um and uh you started off
hey but it's more of the same gold price
12 growth in in in september alone In dollar terms?
What was the high?
39.30 or something like that?
In dollar terms?
I can tell you because I've actually got it in front of me.
It holds a strange fascination for me.
Because this is going parabolic now.
This is like a flagpole.
This is ridiculously high.
I mean, the Goldman Sachs report came out, I think, a few weeks ago.
They brought a report.
I want to say it could be six weeks ago.
It could be five weeks ago.
but there's the past month, where they brought a report where they said, well,
they see the gold price at $4,000 in I think the first or second quarter of next
year.
And I think people will say, well, I mean,
after what gold has done recently, man, what are you smoking?
Yeah, we're sitting four weeks later, call it, and gold price already just out of
$100.
of those levels.
But, I mean, it's not just gold.
I mean, if you look at the platinum price, that has increased over 15% in dollar
terms of September.
Year-to-date, that's a growth of 74% in the platinum price.
Palladium, that was up 13% in September.
Year-to-date, also 36% up.
This is great.
This is great for South Africa.
because we're the largest platinum producer, the second largest platinum
producer, the eighth largest gold producer.
I'm just a bit disappointed because I think, what was it, a day or two ago, we
actually,
it was yesterday, where we had the current account, where that came out.
And that was a bit disappointing.
We were still trading at a surplus, which is good.
But that came down to only $4 billion.
That's quite a hefty...
decrease in our surplus,
and they actually contributed the large decline towards our
exports of precious metals.
So, this is a bit disappointing because when you see these type of movements,
and one could maybe argue that's maybe why we're seeing these type of movements
because if South Africa is not
exporting enough or the way they've been doing, then naturally there will be more
buyers than sellers.
That might be one of the reasons why some of these commodity prices are doing what
it's doing.
But yeah, still, in general, I think this is very, very good.
And look at the rent, rent supporting that view as well.
How much do you think platinum is up so far year on year?
Not year to date.
Oh, no, hold a second.
Let's go year to date, platinum and US dollars.
Come on, give it a stab.
And don't cheat, please.
I thought you'd know it because I've looked at it earlier this week.
Go on then.
So you can tell the listeners.
As we speak, and it's down a bit today.
75.5% year to date.
75.5% year to date, the platinum price.
When it broke, it just ran and ran and ran.
There was that massive base on the graph, which is always a good thing to look at.
And away it went.
And silver and gold up in the 40s, you know.
If you're an orange juice drinker, that's also good.
I'm looking at the commodities now.
You've got me going.
If you're an orange juice drinker, the orange juice price is down 50%, but coffee
up
49 and a half percent which is there's no sign of that going down the commodity
board is
wild potatoes down 72 percent anyway yeah capiteg let's get
back to earth now capitex results came out we knew they'd be good the market likes it
but the market likes the market so whatever
what did it say anything new no i mean it's just more of the same for this
company i mean it's uh
So headline earnings up 26%.
I mean, so that's really looking good.
They're still trading at an ROE of 31.
I mean, this is what we want to see.
When you value banks, you don't really look at their PE ratios.
You like to look at their price to books.
And usually there, when you say you look at the price to book and you look at the
ROE,
The ROE is trading.
lowish, then usually the bank should be trading at a lowish price to book.
And inversely the same thing.
Now, we know that Capitec is trading at these crazy, crazy price to book.
I've read somewhere it might be the most expensive bank in the world on a price to
book basis.
But I mean, to 2024, they had a return on equity of 29%.
This set of results came out 31%.
And even the book value increased by 17%.
So, yeah, no, share price again reacted greatly.
I mean, up 3% for today.
It's just a bank that's going from strength to strength.
A great, great South African story.
What about the SPAR trading update?
I think it was a voluntary trading update.
The market seemed to like that one up about 3.5%, 4%, I think.
Yeah, close to 4% as well.
Voluntary uptake was good.
I mean, it does show the numbers looking good.
Just put in context, we had
Boxer numbers that came out on Monday.
And I don't know if you've seen, it was a very,
very interesting move because Boxer came out with a great trading statement as well
as stating that
they've grown, they've turned over.
And immediately,
most of the investors out there sort of made the assumption that for them to
because remember,
the South African retail pool or food retailer pool is not growing.
It's pretty much the same size.
So for a company like Boxer to grow the way it's done over the past 12 months,
it had to go and take a market share of some of these other companies.
And over the same time, I think Boxer on Monday, that was also up something like 2%
or 3%.
Over the same day, or training day, Spar was down 3%, 2% or 3%.
And I think there was no real reason why Spar had to decline on Monday.
So I think today's movement was sort of, oh, okay,
so clearly Boxer didn't really go and take Spar's... uh,
let's call it clients, SPAR is still doing fine.
And I think this movement today was sort of just a, whew, it's fine for SPAR.
Yes, okay.
Well, that's a welcome relief because Spar has been a bit all over the place
recently.
Anything else happened over the last two weeks?
You've given us Boxer, you've given us what's happened today, Skalk.
Was there one thing that I've missed while you've been off?
No, I think in general, market-wise, there was no big,
let's call it, surprises.
I think the only thing that's really standing out is this AGOA arrangement.
I mean, we know now it's now finished.
I mean, and they haven't addressed it.
I know President Serafim Aboula,
he actually did address it and spoke and asked that they look at
this.
And I think, yeah, I think U.S.
are sitting with a lot of problems as we're currently sitting.
You spoke about the shutdown.
and I think I mean I think Trump has got 99 problems and
Algoa is just most probably not one of them currently.
But for us, it's a big one.
It's a big one for us and it's a big one for countries like Lesotho,
who actually do export a lot of clothing from their side
towards the US.
Well, for the size of the country, a lot of clothing, a lot of jeans, for example,
yes.
but I was just looking at Alibaba and...
nvidia during the month of september if you put up a graph of any alibaba versus
nvidia alibaba's gone
in september he's talking about the month of september from 120 to
180 or so 60.
so that's a 50 rise for alibaba in in um just the month of september
and um if you'd have been buying that against nvidia that's gone from what
165 5 to
180. So virtually nothing compared to Alibaba, which is the new big thing,
isn't it?
You get out of your NVIDIA, you get into Alibaba.
That's what people have been saying for a while now.
I don't know.
It's all a bit wild.
It's like the Wild West out there, Skulk.
Yeah, I mean, you and I, we've chatted about this before.
And just cards on the table.
I mean, I am an investor of Alibaba.
Alibaba.
Well done.
Yeah, no, it's I think, you know,
the conversation we had is where you take and there's a few nice ETFs
that look at it.
I mean, but the one that I'm well,
the two that I'm looking at is basically your Chinese internet companies versus
your U.S.
internet companies.
and We're not going to look at the specific ETFs that I'm looking at, but
it's international ETFs.
When you take these two ETFs and you put them price-wise relative against each
other,
I think you turned your clock back about a year ago, the discrepancy between these
two,
with naturally the U.S.
Internet companies running like a house on fire, The Chinese companies...
remained under pressure.
And we just felt, I think about a year ago, that there's definitely an
opportunity,
opportunity for a bit of a recovery.
We've seen the Chinese data that's been released over the past few weeks.
That's maybe one thing we can mention about the past two weeks.
The Chinese data that's been coming out is looking good.
And naturally, this has been really, really great for companies like Tencent,
companies like Alibaba.
I mean, JD.com, I mean, these companies have done well.
But even if you sit with these recent great recovery on some of these Chinese
internet companies,
if you take that same graph, put them against other over the past three years,
you can still see the Chinese internet companies are still somewhat off.
They've made up some of the, let's call it the lag, but it's not made up all the
losses yet.
So what do you say then?
you say to yourself Okay, they've only just started, so let's get in.
I've just conducted an interview with Michael Power.
I don't know if you remember Michael Power when he was at 91 as an investment
strategist.
Yeah, I remember.
He's written this incredible article on AI for Daily Maverick, and we just spoke
about that.
And he goes into all sorts of technical reasons why China is catching up and why
America's got to watch out.
So maybe it's gone up 50% in one month.
a company like Alibaba, after great numbers.
But maybe, you know, we're underestimating it and it can go further.
Anyway, talking about data, as I said in my introduction,
US private sector jobs have fallen by the most in two and a half years.
Mr.
Trump will hate that.
Yeah, yeah.
The jolts yesterday looked pretty stable.
Job openings, yeah.
Yeah, the job openings yesterday came out more or less expected.
And I think that was sort of a sigh of relief because that was the first hurdle
done.
But yeah, you mentioned today's data, not that good.
I mean, then we need to go and see later this week.
It's going to be some serious job numbers going to come out later this week.
And I think that's going to be a big question mark.
I think it's Friday, if I'm not mistaken.
Yes, it is.
Friday, October 3rd.
Yeah, precisely.
First Friday of the month.
Let's have a look at some prices.
Where are these things?
I've been looking at so many different things.
You've led me astray again, Scott.
Okay, here we go.
I've got the dollar round at 17.20.
The British pound against the round 23.80.
The euro round.
2018,
EUR$117.31 gold price 38.62 on my screen is that
correct Skulk 38.62?
Let me quickly see, I've actually got it open here just hold for a sec.
Thank you very much.
Yeah that's pretty much what it's trading at now yeah.
Okay, so it's off its highs, but it's still bubbling under, very close to that
3,900 mark, and the Goldman Sachs 4,000 mark.
Platinum, 1,587, which is up a percent or so.
Palladium, down nearly a percent at $1,276 per ounce.
What else have we got?
The oil price.
While I'm looking for oil, how's Cecil been doing for you?
Cecil, I don't have a big position.
I remember that it was one of my trades.
That's the one I'm talking about.
That's the one.
So it's definitely retraced.
I mean, it's not trading at the,
let's call it the 120 odd levels where it was trading a few weeks ago.
It's now trading at 107 rand.
But it's still definitely in recovery mode.
Remember, we've mentioned the likes of what the Platinums and Palladiums and
Golds has done.
Remember the Brent World Prize at that time.
that has declined by 2% in September.
And the RAND against the dollar, for instance, that was stronger, more than 2%.
So if you take that, that's pretty much a 4%
drop in RAND terms for the world price,
which naturally won't be good for the likes of Sasol.
But still, I mean, under 7 RAND levels, still trading way, way above the levels he
was trading at in April, May this year.
Yes, indeed.
On the old story, we've got West Texas crude 62 on the nose, which is down
0.6%. Brent crude oil $65.57, which is down 0.7%.
The copper price is in New York $4.80,
4.8067 to be precise,
which is down just under half a percent on the day.
But I still think it looks really good.
somebody asked me scalp what my best performing my prediction for the best
performing
Stock market in the world in 2026 would be, incidentally,
it was Egypt last year.
So I don't know.
I don't know anything about these things.
I just said Chile because of the copper factor.
It's not a bad call, is it?
I mean, copper, I think, is poised for greatness.
I don't think it's going to be a gold, but I do think it's going to go higher.
Well, we chatted about the AI and you mentioned it earlier.
I mean, you can't be of the opinion that AI, I mean,
we already know now that AI is going to take over the world.
Of course it is.
I mean, some of these tech companies are telling us, the likes of the NVIDIA's
empowerment movement,
they're telling us that it's going to take over the world.
But if you're going to be of that opinion, then you need to say, well, you need to
back copper.
But what do you have?
What do you have for best performing country this year, market?
Chile.
because Chile is known for producing copper.
Chile?
Okay.
I've actually got it open now just to get an idea.
Here we go.
You knew I was going to do that.
So as we stand here with all the listed country ETFs,
Chile is finding itself in 14th position.
This is for 2026, though, but I'm interested to know what's gone on this
year.
Yeah, it's done close to, let's call it, 35% in dollar terms this year.
I mean, and for the listeners out there, let's high-five each other.
So Africa is currently in seventh position, in the top ten.
Currently, year-to-date, that's the MSCI.
So people should know, it's not the JSE. This is the ETF, basically the MSCI.
South Africa ETF is done in dollar terms big drum roll.
Year-to-date, up to yesterday's close, 55%.
Wow.
Wow, wow, wow.
Amazing.
It's creating wealth, Skulk, which is such, I mean, it's great.
It's good for the clients.
It's good for the pension funds.
It's good for everything.
Okay.
Good for the JSC today was Telcom, which was up 7.4%.
Is that MTN rumor still going around, Skulk?
Yeah, it's still very much, very much.
Those rumors are very much intact, yeah.
Correct.
Speaking of MTN, that price, 6.8% higher,
147 random 38 cents.
What's GRP?
That's, what is GRP?
Growth point, excuse me, 6.8% higher as well.
Net care up 6.5% and Anglo Gold is shanty.
Anglo Gold up 4.75%.
Sorry, Skalk, you wanted to say something?
No, no, no, I couldn't hear the question.
GRT, so yeah, you answered it.
P, yeah, growth point.
On the downside, Old Mutual down 5.4%.
Is that an ex-div story, Skulk?
Old Mutual, yes, correct.
It's been a dividend.
XRO down 5%.
African Rainbow Minerals down 3.1%.
And Premier down 2.75%.
Any other ones outside of those, please?
No, so with the exclusion of Premier?
All of them are ex-divs.
So African Remembrance Minerals, 6,600 dividend, and Exaro, 8,043 dividend.
Thank you very much indeed.
Closing JSC indices, please.
So the JSC today, let's quickly have a look.
They've done pretty solid for the first day of the first, well, let's call it the
final quarter.
It's come to, oh, wow, I can't believe this.
I mean, this is crazy.
I mean, over 100,000, I thought, man, this is crazy.
then you know two weeks ago we said it's now gone over 105 000 points today it
closed
108 650 points up 0.66 resources not stopping
not stopping after what it's done in september again up one
percent for today the industrial index also looking good 0.61 while the financial
index was up
0.71 let's look at the value that traders through the market.
Yeah, not bad.
Very close to a 30 billion day.
29.4 billion traded through the Jays here today.
That's excellent news.
Skulk, thank you very much for your time.
An extended version, but we had so much to talk about, so we can excuse ourselves.
An extended version of the 5 o'clock shadow.
Skulk is a portfolio manager at PSG Wealth Old Oak in Cape Town.
And as I said, that was the 5 o'clock shadow.
Skulk will be back with us same time next week.
The views and opinions expressed in these podcasts are those of Lindsay Williams and
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