Offshore / US existing home sales fell 9.7% the lowest level since October 2010. US jobless claims dropped to 1.48m / Wirecard into bankruptcy. EY never checked the bank account of the missing cash for 3 years. / HS Markit’s Eurozone PMI Composite Output Index rose to 47.5 in June, / Microsoft permanently shutting retail stores / Nike reports unexpected loss as sales tumble 38% / Boeing 737 MAX certification flight tests to begin today Local / Supplementary budget & GDP tomorrow / Capital raises; City Lodge, Sun International, Pepkor, Harmony / Stor-Age* results / Telkom results, dividend cancelled to fund spectrum / Intu is not able to make a deal with lenders. Stock suspended on the JSE / Solid JSE trading update as volumes soared during the period

JSEDirect with Simon Brown

Market Standard 29 June 2020

Simon Shares Tencent hit a new all-time high on Tuesday and again on Wednesday pushing Naspers (JSE code: NPN) and Prosus (JSE code: PRX) higher and helping the JSE overall. Gold seems to be breaking up out of the consolidation zone it has spent the last few months trading in. Good German PMI data, still under 50, but only just again suggests that April was likely the worst month. Albeit the route back to normal is going to be long and rocky. Mboweni budget; No changes to taxes, but a rough budget. Some key points; The South African economy is now expected to contract by 7.2% in 2020. This is the largest contraction in nearly 90 years. Global GDP -5.2%, broadest collapse in per capita income since 1870 "A post‐lockdown future will require that we build high‐quality physical bridges, roads, railways, ports and other infrastructures.". Some changes in the R200bn Covid loan scheme. Removed the R300m turnover limit. South Africa will "shortly" fall into a sovereign debt crisis if it does not act urgently. The ASHGEQ* ETF is changing and needs your vote. Kristia writes about it here, but, in short, we'll have a cheaper TER after the process.  The delayed April CPI came in at 3%, lowest for 15 years and right at the bottom of the SARB inflation target range. How likely are you to win the lotto? Video: Investing globally, locally. Upcoming events; 01 July ~ The world after Covid-19 08 July ~ Know your derivatives: Long, short or hedge? 15 July ~ Trading 101: Managing risk Subscribe to our feed here Subscribe or review us in iTunes Send money The JSE is currently awash with capital raising. Some just because it makes sense to make their balance sheet stronger, others because they're in real trouble if they don't. The problem is that issuing new shares gives a permanent right to profits, loans are better, but right now bankers are not lending with abandon. Some have been via a quick bookbuild Stor-Age* (JSE code: SSS) ~ R250million Transaction Capital JSE code: TCP) ~ R559.7million Pepkor (JSE code: PPH) ~ R1.9billion Many others will be via a traditional rights issue; Curro (JSE code: COH) R1.5billon (non-renounceable) City Lodge (JSE code: CLH) ~ R1.2billion Sun International (JSE code: SUI) ~ R1.2billion Sasol (JSE code: SOL) ~ not confirmed Mr Price (JSE code: MRP) ~ R3.6billion (idea floated but not confirmed) The Foschini Group (JSE code: TFG) ~ up to R3.95billion This raises a real issue for many shareholders, do you send cash and follow your rights? If you don't you'll be severely diluted, especially with the bigger issues. So you need to decide which you'll follow, but also keep in mind that some of these raising capital may well be back again in the months ahead for more money, and then maybe even again. If you're worried about repeated capital raises, then exiting early may be better than not. I would also add that we will most certainly see a lot more capital raises coming, heck the property stocks haven't even started aside from Stor-Age. So the requests for money will keep on coming and at the end of the day, it's going to be a lot of money requested. * I hold ungeared positions. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Send money (#405)

/ Wirecard and the missing $2.1bn / Hertz decides NOT to issue shares while under chapter 11 / Reports on Sunday that British Finance Minister Sunak plans emergency cut in value-added tax / Index rebalancing in the Russell indices sees nearly half of the stocks being promoted to the Russell 1000 from the Russell 2000 will be healthcare names. / Apple will close 11 stores across Florida (2), North Carolina (2), South Carolina (2) and Arizona (6). This after re-opening 100 in May. / Fed Chair Jerome Powell warned millions of people will likely still be unemployed even as the economy is on the path of recovery. / The Federal Reserve started buying corporate bonds Tuesday as part of a $250 billion program funded by the CARES Act Local / New level 3.something opens leisure and beauty (to a degree) / Marriott Group closing three hotels (Mount Grace, Protea Hotel by Marriott Hazyview and Protea Hotel by Marriott Durban Edward). The hotels are owned by Hospitality Property Fund. / Sasol update, lots of news but not on LCCP partial sale or rights issue. / Capital raising galore (COH, TCP, TFG, SUI, SOL, MRP) / Zero based national budget on Wednesday / New kinda wonder drug / Aspen Ascendis (latter Tanzania only) / Discovery putting aside R3.3billion for Covid-19 claims. ===

MarketStandard 22 June2200

Simon Shares Here's a gem from the Herenya Capital Advisors Twitter account, albeit Remedica is up for sale and we've had lots of early hype on drugs that quickly fizzled out. Ascendis Healths subsidiary Remedica manufactures Dexamethasone which apparently helps combat severe cases and is being approved by the NHS. pic.twitter.com/XUw9VPHwdg — Herenya Capital Advisors (@HerenyaCapital) June 17, 2020   That said, Aspen (JSE code: APN) issued a SENS stating "It is confirmed that Aspen owns rights to this product and distributes both injectables and/or tablets containing dexamethasone in a number of countries." But most importantly, is it really a new wonder drug to treat Covid-19 (dexamethasone). Because ouch, you need to already be in ICU and then if you're on a ventilator it saves 1:8 (12.5%) and of those needing oxygen, it saves 1:25 (4%). Aren't those very modest numbers? On MoneywebNOW yesterday I chatted with Easy Equities CEO, Charles Savage and he dropped some amazing stats. They're opening 1,500-2,000 new accounts a day against 12,000 in all of February. R1billion client money into Sasol at an average of 5500c and if half of those investors still hold Sasol they're sitting on almost R1billion profit! Subscribe to our feed here Subscribe or review us in iTunes Massmart (JSE code: MSM) trading update is as bleak as expected. They secured an R4billion inter-company loan from Walmart to keep them going and expect HEPS to be at least 50% lower. Missed liquor sales for the months of April and May are estimated to be approximately R2.3 billion lower compared to the previous year. Discovery* (JSE code: DSY) puts aside R3.3billion for Covid-19 hoping that it is enough money. Hits HEPS hard but they'll still make some R5.5billion of normalised HEPS. Chinese Ping An Health is, however, having a good Covid-19 as sales increase and the bank is doing well enough as it continues to grow clients and accounts. MultiChoice (JSE code: MCG) came out as I was recording last week and they were solid. They paid their first dividend and announced a tie-up with Netflix and Amazon streaming. But long-term challenges persist and they still buy content in hard currency and sell in soft. Very good results from Value Group that place the stock on a PE of around 5x and a dividend yield of just over 9% while they hold cash of almost 150c a share or over 35% of the share price. Zeder (JSE code: ZED) sold its shares in Quantum Foods (JSE code: QFH) for over R300million. So now what for Zeder? They have just over 80c cash per share, some 30% of the share price? A PSG delisting? A buying spree, dividends or a share-buy-back? Next Wednesday, 24 June, we get a revised budget from Minister Mboweni. The US is considering doing a US$1trillion infrastructure package. * I hold ungeared positions. Cash Club: Is TymeBank still right for me? Upcoming events; 18 June ~ What it means to Invest Globally, Locally 01 July ~ The world after Covid-19 08 July ~ Know your derivatives: Long, short or hedge? 15 July ~ Trading 101: Managing risk JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

JSE wonder drug (#404)

Offshore / China's PPI down 3.7% in May and factory output rises less than expected, retail sales continued to contract in May. / Fed kept interest rates flat and cautioned they expect conditions to remain tough into 2022. GDP 5% in 2021 and unemployment 5.5% in 2022 o S&P500 dropped -4.8% last week but remains +8.1% this month, o Nasdaq dropped -2.3% last week but remains +6.4% this month, o FTSE 100 dropped -5.9% last week but remains +5.3% this month, o JSE Top 40 Index dropped -1.9% last week but remains +5.8% this month, / We’re starting to see the second Covid-19 wave in both the USA and China and this spooked markets. Detroit, Michigan is seeing new all-time case highs / Mnuchin says ‘we can’t shut down the economy again’ / UK economy contracted by 20.4% in April, the largest monthly fall on record / Justeat-takeaway buys GrubHub Local / The Rand hit 16.33 overnight on Wednesday but then came under serious pressure at 17.20 on Friday. / Solid Multichoice results and first dividend payment as sports starts to resume. / Tsogo Sun Gaming results show debt of over R11billion. Casino industry wants to re-open ASAP / Solid Sygnia results / Sasol Draws Multiple Bids for Stake in U.S. Chemical Site / Hyprop update shows good recovery after the hard lockdown of April. Still opens below 100%, but looking better ￼Hyde Park Corner 67% ￼Rosebank Mall 76% ￼Canal Walk 85% ￼The Glen 85% ￼Woodlands Mall 85% ￼Clearwater Mall 88% ￼Capegate 89% ￼Somerset Mall 92% ￼Atterbury Value Mart 97% Foot count at Hyprop’s malls: ￼March 2020 Down 24% ￼April 2020 Down 71% ￼May 2020 Down 39% ￼June 2020 (seven days) Down 24% / JSE Index balancing this Friday, Redefine is exiting both the Top40 and Fini15 to be replaced by Exxaro and Quilter respectively. ====== British Airways is auctioning off art worth millions as pandemic weighs on earnings

Market Standard 15 June 2020

Simon Shares Bankruptcy stocks are the new excitement in the US. Hertz in chapter 11 saw its stock price back at the levels from when it announced Chapter 11. Tsogo Sun Gaming (JSE code: TSG) results to end-March show debt at R11.2billion, more than double the market cap. EOH (JSE code: EOH) update says debt is being paid off quicker than planned. But it remains a long road for the company. British American Tobacco (JSE code: BTI) update sows solid DM demand but reduced EM demand. Hyprop JSE code: HYP) update details foot traffic and open rates with their malls between 67% (￼Hyde Park Corner) and 97% (Atterbury Value Mart). In large part, the number depends on the number of sit down restaurants. Foot traffic was down 71% in April and in the first seven days of June is now only down 24%. Again this shows that April was very likely the worst point and that things are improving, but the last stretch of improvement is going to be the hardest. China's PPI down 3.7% in May. China is opening but exports are struggling as much of the rest of the world remains in lockdown with reduced demand. Upcoming events; 17 June ~ Trading 101: A traders plan 18 June ~ What it means to Invest Globally, Locally 01 July ~ The world after Covid-19 Subscribe to our feed here Subscribe or review us in iTunes The US goes back to work with 13.3% unemployment US unemployment came in at 13.3% (from 14.7% in April) as the US added jobs in pretty much all sectors. The expectation had been for further job losses and an unemployment rate closer to 19%. Perhaps the biggest miss ever. Now sure some funnies in the number, but they existed n the April numbers as well so net-net the miss would have happened. But what is important is that it shows the US economy opening up and bouncing back strongly, but perspective is still needed. Current US unemployment remains the worst numbers since the great depression with the 2008/9 financial crisis peaked at 10%. It is a long way back to single-digit unemployment and even longer to the sub 4% from the beginning of the year. The driver here will remain the pandemic and what we need to watch remains the rate of infections in the US with 14 states still reporting growing numbers. This could slow or even reverse the positive jobs data we saw. My thinking is that we will likely see the US unemployment rate improve further over the next few months with 10% possible by the end of their summer (August / September). My logic here is that lockdown saw millions at home and the lifting of lockdown saw many return to work. But what we don't know is how many businesses are still in business because a bankrupt business doesn't employ anybody. So while 10% is very possible getting below that number may be a lot harder and could take years. That all said the key point is that while nobody truly expected an improving US job situation this quickly it did happen and there is no point denying it. Instead, we adjust our expectations as expected data reveals itself. As important is to remember that while this was a massive positive number, it stills remains a massive number that shows an economy under severe pressure. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

The US goes back to work (#403)

Global / US May unemployment rate seriously strong at 13.3% / PMI bounces from April lows but still below 50 / China May exports slip back into contraction, imports worst in four years / Opec extend cuts by another month / AstraZeneca Approaches Gilead About Potential Merger local / Apple mobility and Yoco transaction data shows about 65% economic activity in week 1 of level 3 / JSE allows share issues without shareholder approval / Rand below 17 as foreigners buy our bonds and equity / Reserve Bank takes up R10.2bn in government bonds in May / More banking updates / Bidvest update gives insight to Comair and Adcock Ingram / Capital Appreciation solid results and increased dividend as they operate in payment terminals and cloud services (there are always some winner) ==== Levi opening stores and they say “everybody has a new size, a larger size”

MarketStandard 08 June 2020

Upcoming events; 09 June ~ South China Seas structured product Q&A 10 June ~ Margin, gearing & exposure explained 17 June ~ Trading 101: A traders plan 18 June ~ What it means to Invest Globally, Locally Simon Shares Day 70 of lockdown, week 1 of level 3 and I got drink (still no smokes) but court locks down lockdown? Markets are surging, taken off flying and chasing the stars. Overall value is decent but not spectacular. Coupled with the ZAR at 17 we likely have a risk on trade and some epic sort squeezes. The general view for the currency is at least 16 in the short-term maybe stronger but as always, be careful because this can turn on a dime. Of course, my crash puts are getting slaughtered in this run, but that's the plan. if my cash puts are losing then my portfolio is winning. WTI and Brent both having a good week with the latter back above US$40. Sasol (JSE code: SOL) the easy winner here, likely based on higher oil and short squeezes. Will it close the gap at R160? Certainly, the possible rights issue is much less likely with Brent oil back above US$40. Subscribe to our feed here Subscribe or review us in iTunes The Bidvest (JSE code: BVT) saw them write down their Comiar (JSE code: COM) stake to zero as the business is in business rescue. But they had good things to say about Adcock Ingram (JSE code: AIP) and that boost Adcock, but caution as they sell a lot of over the counter drugs that may struggle under a stressed consumer. Last week I was dissing MTI on Twitter, they've reached out to me asking why. I sent them a list of questions on Tuesday and will publish the answers when I receive them. Key point apart from paying referral fees is an absolute lack of compliance process and no FSCA registration. Locally and globally PMI data bounced back in May compared to the horror April numbers. This is in part statistical, but also that April was hard lockdown in much of the world and importantly aside from China all PMI numbers were still below 50 and hence contracting. Speaking of China, they're cracking down on Hong Kong coupled with Trump blaming them for their COVID-19 response and let us not forget we still have the trade wars on-going. Make no mistake they are using the cover of a pandemic and Trumps increasing isolation as a world leader to flex their muscle and increase their influence. This is not surprising but will lead to even greater tensions between the US and China and this must leave Tencent in somewhat of a bind and at risk of sanctions aimed either directly at them or China more generally? That, of course, could then play out to Naspers (JSE code: NPN) and Prosus (JSE code; PRX). But for now, they both doing alright, remember they are still some 20% of the Top40. Remgro (JSE code: REM) has spun out their holding in RMH and PSG have announced the terms of their Capitec* (JSE code: CPI) unbundling, 14 Capitec shares per 100 PSG shares leaving PSG with some 4%. My view is unbundling already listed shares makes absolute sense. There is no point in me essentially buying a holding company if all they own is listed. Now if the held unlisted shares then t's a different story, so maybe we'll see more in the months and years ahead? * I hold ungeared positions. Video: Pandemic investment scenarios (with risk matrix) Video: South China Seas structured product Video: Managing risk as a trader with Garth McKenzie JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Lift off (#402)

Global / US past 40million initial claims and Q1 GDP updated to -5.0% from -4.8% / Personal saving rate 33% in April / Germany’s Business Climate Index rose to 79.5 in May as the country reopens / Reuters ~ China's May factory activity returns to growth but demand remains weak / China US tensions increasing / Bill Ackman's Pershing Square Capital Management announced it had sold off its entire stake in Berkshire Hathaway. BH has $133.3 billion hoards of cash vs S450 market cap (third of assets are lazy and not been deployed). Local / PSG announced CPI unbundling details (14 CPI for every 100 PSG) / Woolies update, spending AU$100million on Australia / TigerBrands results as branded goods come under further pressure. / Famous Brands very pessimistic on casual dining recovery / Stats SA delayed April CPI by a month due to difficulty collecting data / PIC talking about converting Eskom debt to equity

Market Standard (#008) 01 Jun 2020

Simon Shares Day 63 of lockdown, level 3 on Monday. As I record we're still waiting for details as to what is allowed under level 3, but it seems that rather than saying what we can do, the regulations will tell us what we can't do and that list will be short. We will be able to exercise, retail is open but restaurants and bars not. Alcohol will be sold, but not tobacco products. Personally I will pretty much stay in lockdown (aside from my daily radio show), but now with a drink. NYSE trading pit opened again on Tuesday. A throwback to the days before technology but always fun to watch, not that I have been to the NYSE. I did see the JSE in the mid 80's on a trip to Johannesburg. It was wild and made no sense to me but it was energetic and I wanted to be a part of it all. Famous Brands* (JSE code: FBR) results presentation made two comments “restaurant landscape will be irrevocably transformed” because of Covid-19. The market recovery in the casual dining segment will be “slow and unforgiving”. Woolies (JSE code: WHL) trading date shows food doing well but clothing and Australia doing very poorly. They're talking to bankers in Australia about debt covenants and Australia may need a AU$100million cash injection. Solid Coronation* (JSE code: CML) results with HEPS and dividend both up 8%. But risks remain, will private investors pull money or slow/stop deposits? Also as companies reduce head retirement money flows into their funds ever month. Tuesday in parliament Minister Dlamini-Zuma said unemployment may hit 50% and the Absa (JSE code: ABG) said they expect local 2020 GDP to be -10%. Pepkor (JSE code: PPH) saw R5.5billion in lost revenue due to COVID-19 already so far. R476million to end March and another R5billion in April. May has seen a spike in shopping so they'll get some back, but likely not all. FAANG annualised returns since the lows of March is averaging 970%. Wowzer, but as I said last week; don't fight the Fed. * I hold ungeared positions. Video: Solvency and liquidity in the time of COVID-19 Wealthy Maths: Drop a tax bracket Upcoming events; 28 May ~ Managing risk as a trader with Garth McKenzie 03 June ~ Pandemic investment scenarios 10 June ~ Margin, gearing & exposure explained 17 June ~ Trading 101: A traders plan 18 June ~ What it means to Invest Globally, Locally Subscribe to our feed here Subscribe or review us in iTunes Understanding warrants TOPSBZ is a put warrant that trades on the #JSE and can be bought in any normal stock broker account .. @SBGTraderZA clients buying in a warrant account pay flat R50 brokerage taxes etc. https://t.co/LX0mZmplYo — Simon Brown (@SimonPB) May 23, 2020   Warrants were the first derivative I traded, starting in October 1997 as they were launched in South Africa. SAWarrants was also my first successful website that launched me into the financial services industry. Recently I've been trading some warrants again as have a few traders I know and a tweetstorm I did over the weekend got a lot of question about trading warrants. The short answer is don't. They're derivatives and hence risky If you're an ETF buyer or even just a straight equity buy and holder, stay away. If you're successfully trading other derivatives then they're worth a look. Certainly, they have some benefits over traditional derivatives, but also lots of complexity. A warrant is really an option that gives the holder the right to buy or sell an underlying asset. Call goes up as does the underlying asset. Last letter of the warrant code will be A-0. Put goes up as the underlying asset falls. Last letter of the warrant code will be P-Z. The fact that it is a right, not an obligation, means your loss is capped at what you paid. Warrants trade on the JSE just like any other share or ETF with six-letter codes. First 3 letters denote the underlying asset. 4th letter is the issuer, 5th letter the style (B for normal, I for instalment and K for knockout - be very careful of knockout warrants). The last letter is as above denoting call or put. But a lot of greeks that can trip you up that are outputted by the Black-Scholes formula (this formula won the writers a Nobel prize). Gearing ~ amplification of the move. For example, 4x gearing means for every 1% move of the underlying your warrant will move 4%. You don't want to gear much more than 5x, 8x on indices. Theta ~ time decay. A warrant decays every day, every week, even if the asset moves in your direction it will lose some value. This reduces the warrant price and is very aggressive in the last third of the warrants life. Be very careful of tie decay. Expiry ~ unlike CFDs, warrants expire and if you hold at expiry you'll be paid out. If it has value. Make sure you have lots of time, at least 3 months, ideally 6 months. Time decay becomes very aggressive in the last few months. Value is price above strike prce at expiry (for calls). For puts price below strike. Strike is the price at which you can buy / sell the asset. You want the current price to ideally be 10% - 15% of the strike price. Delta ~ many things but more or less the likelihood the warrant will expire with value. One major benefit is that with warrants you can only lose hat you paid, unlike with CFDs or futures you can lose more than you deposited. The warrant issuers will also ensure there is a market maker buying and selling at fair value at all times. They will use a pricing matrix that can be found online. If you trade warrants within a Standard Online Share Trading warrant account you pay flat brokerage of R50 +taxes. And Standard Bank have a good website at warrants.co.za And I will end where I started. Be very careful and do not jump into warrants unless you're a successful trader already, otherwise, the greeks will get you. The big challenge is that you may get the direction of the trade right (call or put) but pick the wrong warrant and lose money. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Understanding warrants (#401)

Offshore / Hertz bankruptcy / US initial jobless claims now over 38million (160m labour force), UK ver 10million (35million labour force) / This on the back of German Q1 GDP released this morning coming in at -2.2% / Moderna vaccine excitement, and then they raise capital on share price spike / Commodities having another good week. / Apple mobility data shows Europeana and US economy opening. Local / 0.5% rate cut / Stor-age raises R250m in bookbuild. / Grand Parade Burger King sale being repriced? / Liberty 2 Degrees update, nice insights. / Nedbank update also offering solid insights. / Richemont raises Euro2billion debt as they strengthen their balance sheet / Online sales surging

MarketStandard for 25 May 2020

Upcoming events; 21 May ~ Solvency and liquidity in the time of COVID-19 28 May ~ Managing risk as a trader with Garth McKenzie 03 June ~ Pandemic investment scenarios 10 June ~ Margin, gearing & exposure explained 18 June ~ What it means to Invest Globally, Locally Day 56 of lockdown Simon Shares Don't fight the Fed (The Federal Reserve). Markets are in full rally mode and the forward PE of the S&P5- makes it the most expensive in the last decade. During a pandemic and worst US unemployment since the great recession? Bu the point is simple, if the Fed is buying with guns blazing, don't stand in the way, markets will rally higher even if everybody I speak to is bearish. With that in mind, I have bought some TOPSBZ as insurance against another market collapse. It is a put warrant over the Top40, expiry is December and strike is 41,000. So a decent amount of time and about 18% out-the-money. Richemont (JSE code: CFR) raises Euro2billion of cheap debt to go with their almost Euro2.4billion of cash on hand. Now they've always been a conservative company, but they are storing up that balance sheet like crazy. Dischem (JSE code: DCP) results disappoint and buys Baby City for R430million. Solid Santova (JSE code: SNV) results, but to end February. Oil is moving higher as production cus finally start taking effect. Commodities remain strong. Makes no sense unless one assumes a massive post-COVID-19 infrastructure spending boom, and that does make sense. I've been watching countries lifting their lockdowns, gentle but certainly lifting. Germany started lifting in late April (some stores open again) and then more broadly in early May. So far new cases continue to trend down, albeit the early May stats would only start coming in now. But early evidence is that an initial hard lockdown works and then slowly lifting restrictions seems to do the trick. Very early days, but the data is hopefully. Importantly, this is not about removing restrictions, just reducing them. Liberty 2 degrees (JSE code: L2D) update gives great insights into the property sector. April & May saw rental collections around 40%, most malls are now operating at 60% - 70% GLA and foot traffic at 60% pre lockdown levels. All stats are improving during level 4. ZAR at 18 as I record. Video: Getting started in trading Subscribe to our feed here Subscribe or review us in iTunes JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Don't fight the Fed (#400)

**Global** / UK two-year government bonds traded negative last week as UK GDP -2% for Q1, -5.8% for March & retail sales fall 19% year on year. Biggest in 25 years / Tencent’s Q1:20 results showed a +19% jump in gaming subscriptions, overall Group revenue grew +26% and, on almost all metrics, the Group beat analyst estimates. / US, jobless claims came out as another nasty number today, now totally around 36m (the worst number since the Great Depression) while April retail sales collapsed -16.4% m/m. **Local** / Barloworld is attempting to back out of its deal to buy Tongaat Hulett’s Starch business due to COVID-19 likely negatively impacting the business’s EBITDA and triggering a “Material Adverse Clause”.  / Dis-Chem announced the acquisition of 100% of Baby City / Richemont released FY 20 results showing revenue flat but profits collapsing by two-thirds. and are proposing a possible warrant instead of a dividend / Strong Aspen update while Life healthcare says EPS for full year likely 20% lower after mid year was +12%. / Knockout Sibanye Stillwater results that saw debt down 40%. / Impala Platinum Mine has temporarily suspended operations at its Marula Platinum mine in Limpopo. This follows the detection of six more COVID-19 cases among workers at the plant. =====  

MarketStandard with Simon brown 18 May 2020 (#006)

Simon Shares Day 49 of lockdown Pick 'n Pay (JSE code: PIK) results were slightly down, but no dividend as they conserve cash. Sibanye Stillwater* (JSE code: SSW) first quarter results knock it out of the park, strong cash flow and debt down 40%. Tongaat (JSE code: TON) sale of their starch business to Barloworld (JSE code: BAW) has collapsed with the buyer claiming "material adverse change" due to COVID-19. UK two-year government bonds traded negative this week. UK GDP was -2.0% for the first quarter (QonQ) with March saw a 5.8% contraction. Retail sales fall 19% year on year. Biggest drop in 25 years as 'excess deaths' top 50,000 but look to maybe have peaked, for now. Norway oil fund exits Anglo American (JSE code: AGL), Glencore (JSE code: GLN) & Sasol (JSE code: SOL) as they "derive at least 30% of their income from thermal coal, base at least 30% of their operations on thermal coal, extract more than 20 million tons of thermal coal per year, or have a coal power capacity of more than 10,000 megawatts from thermal coal.". Naspers (JSE code: NPN) and Prosus (JSE code: PRX) have both hit new all-time highs over the last week ahead of Tencent earnings that came out ahead of expectations. Upcoming events; 13 May ~ Know your derivatives: CFDs, indices and FX 20 May ~ Trading 101: Getting started in trading 21 May ~ Solvency and liquidity in the time of COVID-19 28 May – Managing risk as a trader with Garth McKenzie 03 June ~ Pandemic investment scenarios * I hold ungeared positions. ffff Download the audio file here Subscribe to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes The post COVID-19 reality is starting to emerge It's very early days but an announcement from Twitter shows how things may look as the company says it will "allow its employees to work from home forever". Hello new world. This is surely going to be a large part of our post COVID-19 reality and has serious implications across many sectors. A recent IBM survey during April of 25,000 US adults found; 54% of Americans say they want to work from home primarily 75% say occasionally Commercial property in this example will simple need less office space. This will hit not just office rentals, but for example also car an Uber usage as we travel less to work reducing fuel and car needs hurting the respective industries. Then of course lower insurance rates as less driving means less risk, and so the all rolls. The flip side of course is that less travel time means more money and free time for an individual and how will we spend that? Reading? Eating out? Family? Taking the Twitter example a step further, working from home means more virtual meetings (such as Zoom) and then it is a small step to less corporate travel as meetings or events that may required travel are now done virtually. It'll be a long time before we get to the new post COVID-19 reality, but it's not going to be a new normal, it'l be way more. A new reality and importantly we get to define what this new reality will look like. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Post COVID-19 reality emerging (#399)

Global / Worst US unemployment since the depression, but lagging indicator. Likely 25% by end May / Last weeks PMI, local and global mostly setting records for worst ever / Nasdaq is up year-to-date / IMF warning that their 2020 GDP forecasts may be too low? Local / Comair business rescue / Phumelela Gaming business rescue / Our bonds are strong, 10 year at 9.3%, shorter dated below 8% / Anheuser-Busch InBev QoQ volumes down 9.3% / Property stocks and risk of losing REIT status

Market Standard 11 May 2020 (#005)

Weekly roundup of what's happening on the JSE in South Africa hosted by Simon Brown. Focusing on stocks outside the Top40 index it includes; company results, updates, market moves, week ahead, trading tips/products and book reviews.

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JSEDirect with Simon Brown

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