Facebook Launches Libra Coin

19-JUN-19

Yesterday Facebook released details of their new cryptocurrency, Libra. The currency is only partly Facebook's because there are other founding partners, who also have a say in how things will be run. The founder group includes Visa, Mastercard, Uber, PayPal, Vodafone, PayU (Naspers) and eBay. It's expected to launch early next year.


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Upward Stock

19-JUN-19

Market Scorecard Popping into Vestact email boxes this morning was a research note from a US investment bank on Naspers. They expect the Naspers share price to be around R4 450 in the next 12-months. Viva! It is worth noting that this is just a forecast and that these analyst notes are wrong all the time. What is worth considering are their reasons for thinking a price surge is coming. One of the key drivers of the Naspers share price is forecast to come from an expected 27% increase in Tencent's share price over the next year. Added to that, Naspers currently trades on a 36% discount to NAV. The discount is expected to narrow with the listing of NewCo next month. Good news for shareholders. If you are a Vestact client, expect an email about what to do with Naspers and NewCo by the end of the week.


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Lululemon Soaring

19-JUN-19

Yoga-inspired, technical apparel company for men and women, Lululemon, reported its first-quarter numbers. The company beat management and analysts aggressive earnings target for the fifth consecutive quarter. This was thanks to growth from online sales of leggings and joggers.


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Multichoice FY Numbers - Growing in the Rest of Africa

19-JUN-19

MultiChoice released results yesterday for the year ended 31 March 2019. Holders of Naspers received Multichoice shares earlier this year by way of a share unbundling. We wrote to Vestact customers in February, advising you to keep these shares, as they were likely to do well.


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Battle of the Banks

18-JUN-19

Market Scorecard If you are a short term trader, the next two weeks are going to be tricky. There is the Fed interest rate decision tomorrow and then the G20 meeting next week. You can be sure that the Fed's statement tomorrow will move markets; will it be dovish or will it be too hawkish? Then depending on how Trump's meeting with Xi goes, that will also have further ramifications for the market. The outcomes of both events seems too hard to call. That is why we are not short term traders. We would rather have your money ride out the turbulent waves and take advantage of the rising tide from a growing global middle class.


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Netflix Moves into Gaming

14-JUN-19

When you create good shows or movies they become brands on their own. Look at how Disney has leveraged off its characters to make theme parks, games, toys and many other products. Did you know that Disney makes 34% of its revenues from Parks and Resorts alone? That is over $20bn a year. They also make $4.6bn of their revenues from Consumer Products and Interactive Media. That equates to profits of $1.6bn.


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Netflix Streams Revenues

14-JUN-19

Market Scorecard The main talking point on Bloomberg and Twitter at the moment, are yesterday's explosions in the Persian Gulf. The US have released footage of what they claim proves Iran was behind the attacks on the oil tankers. This is the second set of attacks on tankers in the Gulf this year and only serves to increase the tensions between the US and Iran. On the news of the attacks yesterday, oil immediately shot higher by 3%.


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Weeding Weak Management

13-JUN-19

Market Scorecard After the disappointing GDP figure last week, it was a surprise to see South African manufacturing and retail figures both better than economists were expecting. On Tuesday South African manufacturing data was released showing it grew by 2.8% in April, much higher than the 0.4% forecast growth. Then yesterday, South African retail sales released for April grew by 2.4%, also higher than the forecast of 1.2%. Not too shabby. Both numbers bode well for a stronger Q2 GDP figure. Sticking with economic data that beat expectations, a US inflation read came in lower than expected yesterday. Further reinforcing Wall Streets view that a rate cut is on the horizon.


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Highlights From AGM

13-JUN-19

On Tuesday, Tesla held its AGM. There were no surprises, good news for shareholders. The general message is that Tesla will continue to grow at an incredible rate. Part of that growth includes opening a factory in Europe and maybe getting involved in mining to secure the materials needed for their batteries.


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Amazon Leaves Food Delivery Space

12-JUN-19

Amazon announced yesterday that it will be shutting down its restaurant food delivery services "Amazon Restaurants" on the 24th of June, hanging up the gloves, caving to fierce competition from GrubHub, DoorDash, and UberEats. This is wonderful news for the remaining competitors in the US.


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Pay For That Turkey

12-JUN-19

Market Scorecard After 5 days of green markets, thanks to lower interest rate talk, yesterday saw US markets end slightly in the red and Asian markets open lower this morning. Markets have priced in the risk of a trade war, they have also now priced in the chances of interest rate drops. So for now, markets will probably bob around until the next catalyst comes along. If nothing major comes along in the next few weeks, like an unexpected tweet, then markets will be given a push from earnings season that kicks off in July. Nothing like seeing bottom line figures to drive a share price, higher or lower.


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Naspers Buys Iyzico

12-JUN-19

I hear many people loathing Naspers for pushing offshore. Both with its listing and with its investments. In truth, South Africa is a tough place to scale in the tech space because we have a small population and an even smaller middle class. The Naspers management have shareholders interests to consider, including every single South African who has exposure to listed investments on the JSE.


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Bitter Sweet

11-JUN-19

Market Scorecard Yesterday Lonmin shares stopped trading thanks to the deal with Sibanye finally going through. The deal was announced way back in December 2017, but due to court challenges from AMCU it took longer than expected. The merger is a sign of a mature industry, where consolidation is natural, and scale is needed to try keep costs down. Over the last few years, Lonmin has burnt through billions trying to stay afloat. Lonmin has been a terrible investment over the last 10 years due to all their rights issues, to raise cash from shareholders by issuing more shares. Lonmin stopped trading at R14.70 on Friday, where on a split/ dilution adjusted basis its all time high was around R33 000 a share in March 2008. That share price shows how much value has been destroyed for shareholders over the last decade. Mines aren't these money making machines that some people think.


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Salesforce is Buying Tableau

11-JUN-19

Salesforce is buying data visualisation company Tableau in a $15.7 billion all-share deal, their biggest acquisition ever. This comes on the heels of Google acquiring analytics startup Looker last week for $2.6 billion suggesting that there's big appetite to make sense of all this big data everyone speaks of.


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City of Old

10-JUN-19

Market Scorecard Following the ADP jobs numbers on Wednesday, the official employment figures out on Friday were equally disappointing. Well, disappointing is relative. The number of new jobs created in the US was only 75 000, instead of the 185 000 expected. The unemployment rate stayed steady at 3.6%, so not terrible numbers. What it did confirm though is that the US economy is slowing, which means interest rate cuts! Stocks were flying on Friday on that anticipation, the banks weren't though. Lower interest rates means weaker margins for them. More good news for markets is that the US and Mexico have reached an agreement to delay tariffs that were meant to be implemented today.


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