AWS is Undervalued

06-DEC-19

I came across two articles talking about jobs that didn't exist a few years ago. The first, is a company that offers productivity sessions. You pay them to rent a desk for a period of time, where you have a specific task to compete. They will then check up on you during the session to see how it is going. Part of the service can include them taking your phone away from you to reduce distractions.


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Skinny Trade-acino Please

06-DEC-19

Market Scorecard Locally, there has been an interesting divergence between SA Inc stocks and the Rand. Over the last few weeks, local retailers and banks have seen their share prices sliding lower, but at the same time, the Rand has been rather resilient. It has actually gained a tiny amount of ground against the US Dollar. One theory is that the divergence is due to our high interest rates locally. High interest rates are not great for our economy, so retailers and banks suffer, but it is very attractive to international investors looking for yield on their money. With developed markets cutting rates and South Africa leaving them the same, more people will be parking their money here. The SARB has a fine balancing act between protecting the currency, keeping inflation in check and still keeping one eye on local growth.


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Investec Spins Out Ninety One

05-DEC-19

Investec is in the process of spinning off its London-based asset management business, which has GBP 121 billion in assets under management. That operation was founded in South Africa by Hendrik du Toit in 1991, so the new name that they came up with for the company is Ninety One.


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Batting for Tech

05-DEC-19

Market Scorecard Trade talks, the reason for market movements again yesterday. Trump came out to clarify that the two sides are getting closer to a deal. When he said that maybe they would only sign a trade deal after the 2020 election, it shouldn't be interpreted that the talks are going badly, it was just him talking off the cuff. The market now seems to be pricing in the signing of a 'skinny deal' soon, which includes the rolling back of some tariffs, and then signing a big trade deal at the end of next year after the elections - assuming that Trump gets re-elected.


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Alphabet gets a new Alpha

04-DEC-19

Market Scorecard Yesterday, Stats SA confirmed how tough things have been in the local economy. Our GDP contracted by 0.6% for the third quarter, which was worse than expected. On the news the Rand weakened a bit. A lower growth rate means that our debt to GDP ratio gets worse, both because our GDP is lower and due to SARS receiving less tax. South Africa has a serious growth problem!


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Sundar Pichai Takes Over as Alphabet CEO

04-DEC-19

You may have noticed that we do not devote much time to profiling the CEOs of the companies that we hold in Vestact portfolios. It's not that company management are unimportant. A good strategy is developed and implemented by a talented team, and sound decision making is crucial for modern multi-national corporations. Conversely, a rotten manager can do a lot of damage.


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Built It and They Will Take It For Free

03-DEC-19

Market Scorecard International markets have had a tough start to this week. There are increased concerns about the viability of striking a trade truce this year. China has been hitting back against the US for signing the Hong Kong bill. Locally, the telecom companies had a very tough day, MTN was down 6.4%, Vodacom was down 5% and Telkom was down 4.2%. This was due to the Competition Commission's report on data pricing in South Africa.


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Competition Commision Report on South Africa

03-DEC-19

As many would have seen yesterday, the Competition Commission of South Africa (CCSA) released a report criticising the mobile operators in South African for high data prices. You can read the final report here - Data services market inquiry, and this is what Vodacom and MTN had to say in response to the report - 'Wrong' to blame operators for data prices not falling faster.


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Permabear Loses Hair

02-DEC-19

Market Scorecard Another month is behind us and we are now into December. It is the holiday season where Gauteng starts to shut down, and people emigrate to the coast for a few weeks. On the markets, November was another up month for US stocks, taking the tally to three good months in a row. Locally though, stocks had a poor month dropping about 2%. For 2019, the JSE All-share is still up around 5%, which is a silver lining.


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Apple To See Demand for 5G Phone

29-NOV-19

Globally the number of installed 5G networks is growing rapidly. In South Africa Rain has already launched its 5G network. To use the super fast network though will require a special cellphone or router, so your current iPhone won't cut it.


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Your Daily Fibre

29-NOV-19

Market Scorecard South African markets had a rough day yesterday. The reason? Yes, you guessed it, a change in the trade war landscape. Trump signed the Hong Kong human rights act, which effectively is a show of support to the current anti-government protestors. The new law will require the US to annually confirm that Hong Kong's special freedoms are being maintained by Beijing. The law forces China to stick to the one country, two systems principle, which was negotiated between the UK and China in the 1980's. As you can imagine, China is unhappy that the US is getting involved in their domestic politics. The concern from the market is that this will now hamper any short term resolution to the trade war.


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David Jones Groans

28-NOV-19

Market Scorecard Yesterday was another green day for markets. The day started off with some poor Chinese data, but that was quickly forgotten on further news that we are "almost", "only have small details to iron out", "very close to", a trade deal between China and the US. It feels good going into December and the summer holidays with the tailwind of record high US markets. Last year this time, the market hit a wobble at the end of September, and then had a horrible run up to Christmas where the market was down around 13% between the 1 December and the 24 December. Can you even remember what the reason for the drop was?


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Woolworths Trading Update - Strong Food Sales

28-NOV-19

Food and clothing retailer Woolworths is still a Vestact recommended stock in local portfolios. It has a market capitalisation of R57 billion these days, and is still in the JSE Alsi 40 index. The share price is at R54, compared to its all-time high of R103 in November 2015. In other words, we are still hanging in there, after four years of negative returns! Having said that, it's off its recent lows, of R45 a share.


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Contain Your Energy

27-NOV-19

Market Scorecard South African equity markets have had a tough start to this week. Financial and banking stocks are leading the slide in share prices. On Friday S&P changed their outlook on South African debt from stable to negative, meaning that if things don't change they will move South African debt to two notches below junk. If one rating agency is moving to drop us to two places below junk, it seems a foregone conclusion that the other agency, Moody's, will be dropping us to junk status next year.


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Transaction Capital - Stands Out From the Rest

27-NOV-19

The last 5 years have been very tough for JSE listed companies. But one company has managed to grow headline earnings per share by 20% per annum over that period. Transaction Capital, the majority owner of SA Taxi reported another year of good numbers yesterday.


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