Jsedirect With Simon Brown

Offshore / Trump Covid-19 with elections 4 weeks away. / US unemployment 7.9% / Disney to lay off 28,000, American Airlines 19,000 & 12,000 United Airlines / Palantir lists with direct listing / Airbnb listing progressing with $20billion valuation Local / Unemployment numbers / August CPI 3.1% / Capitec results / Alviva results / Ascendis Health results (issued, cancelled and re-issued) / Remgro results, discount to NAV at 40% (lots of deep discounts to NAV) / Sasol sells 50% for $2billion

Simon Shares Day 188 of lockdown. August CPI 3.1%. Everybody now suddenly knows about the expanded unemployment rate? Capitec* (JSE code: CPI) results were as always solid. Hit hard by the pandemic, but resilient. Valuations are rich, as always. Alviva (JSE code: AVV). Remember old Pinnacle, once a darling and then hit by claims of dodge tenders. They bought Datacentrix changed their name to Alviva and issued decent results. Everybody asking me about Ascendis Health (JSE code: ASC). To me it is binary, either they sell Remedica for a good price and they can bumble along, or they go bust. Debt is huge and risks are massive, sure some potential reward but why rush it? Remgro (JSE code: REM) results, +40% discount to net asset value (NAV). Either you view this as a cheap entry into some listed businesses inside Remgro. Or your view is that holding structures are value destroyers. PSG also at a massive discount to NAV. Typically discount used to be around 15%, but now we're seeing 40% discounts. Now the trade

Simon Shares Day 181 of lockdown. The Tongaat (JSE code: TON) deal to sell their starch unit to Barloworld for R5.35billion is happening and the Tongaat share price loved the news. We're seeing a strong bounce locally while the US markets are also having a better run, risk back on (for now). But what was odd was gold. It didn't run as stocks were selling off and has actually weakened. The point is that if fears were of a longer sell off gold should do better, except for two things. Firstly nothing is linear and secondly when there is real fear as we saw back in March everything is correlated at 1 and everything sells off. The UK back into lockdown, not the hard lockdown of March / April. But lockdown that the government is saying may last six months. This pandemic is not over. Property stock results are coming thick and fast and frankly, most are not as bad as I expected. Make no mistake, they're ugly. But I had expected worse and while distributions are being delayed and valuations were written down they'

Offshore / BoE, Fed and BOJ all left rates unchanged, BoE ‘explores’ negative rates. / TikTok deal with Oracle (and Walmart) confirmed. / Wechat ban from midnight, 3.3million users in America and China threatens to expand its “unreliable entities list”. But “TRUMP'S PROHIBITION ON WECHAT IN U.S. IS PUT ON HOLD BY JUDGE” / OECD ups global 2020 gdp, but drops ours / Snowflake IPO price of $120 and it opened $245. / Apple has lost 22.6% from its intraday record high of $137.98 on 2 September, losing around $532 billion in market value. Local / MPC no change and next move expected to be up, late 2021. / Level 1 and open borders / Comair rescue plans approved and will delist from the JSE, will resume flying in December / Eskom takes 139 farms from Municipality of Matjhabeng as security against R3.4bn debt. / Results; Pan African Resources, Woolies and Discovery.

Simon Shares Day 174 of lockdown. Level 1? The Foschini Group (JSE code: TFG) trading update spooked the market, but it was the six months to end September. In other words, all lockdown. African Rainbow Capital (JSE code: AIL) results including an R750million non-renounceable rights issue. Trading at some 75% discount to the net asset value (NAV). Sure some decent assets, but the market has hated this one since listing. Super Group (JSE code: SPG) results were tough, especially as they have vehicle dealerships locally and in the UK. Pan African Resources* (JSE code: PAN) results saw debt halve and profits and cash flow essentially doubling. Remains the best gold miner on the JSE. Very solid Metrofile* (JSE code: MFL) results and I would think the delisting at 330c remains on track. Brexit deals seem stuck again over the hard border. * I hold ungeared positions. Two new ESG ETFs from Satrix. Upcoming events; 08 October ~ JSE Power Hour: Investing in local and global listed property Subscribe to our

Offshore / US markets remain volatile as Nasdaq has worst week since March / LVMH Tiffany deal is off/delayed / Brexit talks going all messy / UK economy grew 6.6% in July as gradual recovery continues / Opec turns 60 Local / Q2 GDP -51%, or -16.4% / Firstrand results / Shoprite results / Aspen sale & results / Zeder CEO quits and the company is looking for a new strategy / White & yellow maize above R3k a ton

Simon Shares Day 167 of lockdown. Local Q2 GDP -16.4% (-51% if you annualise it). Makes us one of the worst-hit economies for Q2, not surprising as we did very hard lockdown. Now to get out of the hole and that's going to be the hard part. Of our three main political parties, the honest answer is none of them really have a workable economic policy that we need right now. Serious buying of SA inc shares the last two days. Jeez peeps are buying SA Inc Top movers in Top40 and MidCap pic.twitter.com/6zgQO5DmHS — Simon Brown (@SimonPB) September 9, 2020   Shoprite* (JSE code: SHP) results knocked it out the park. Their Sixty60 app is killing it. My local Checkers has a bunch of full-time staff packing and scores of motorcycles outside. Right now they are well ahead of the local competition and even ahead of Amazon Fresh in the US. Aspen (JSE code: APN) sells commercial rights and intellectual property for the thrombosis business in Europe for R12.6billion. They'll still manufacture & supply the prod

Offshore / US unemployment 8.4% (Temporary Census work (+238,000 jobs) accounted for around one-sixth of the August gain of 1.4 million jobs) / Thursday sell-off with Friday red, but less bad. Monday closed for labour day. / India bans another 188 Chinese apps / Carnival Corporation's Costa Cruises to Restart Cruise Operations This Weekend out of Italy. / Tesla does not go into the S&P500. Instead Etsy, Teradyne and Catalent added. IN order to get into the S&P500 “Companies must be U.S. based, and listed on either the NYSE, the Nasdaq or the Cboe. They also must have a market cap of more than $8.2 billion, and report four straight quarters of profit as determined by U.S. generally accepted accounting principles (GAAP).” Local / Prosus has now gone into the Euro Stoxx 50 and EUR2bn passive inflows should support the share price. / Local GDP on Tuesday / Results; Truworths, Northam & Implats, Libstar and ADvTech / Spur execs leaving (four going by year-end including CEO & COO). / Icasa delays sp

Simon Shares Day 160 of lockdown. Northam (JSE code: NHM) results had two comments that caught my attention. They are aggressively buying back their Zambezi pref shares (JSE code: ZPLP). The second was that the amount of rhodium used in a single catalytic converter was 0.3g in 2015 and will be 0.45g in 2025. A 50% increase that supports the price increase. Hammerson (JSE code: HMN) have consolidated their shares 5:1 ahead of a massive rights issue which either you follow or exit because if you don't follow you'll be diluted out of existence. Upcoming events; 03 September ~ JSE Power Hour: Under the hood of a passive robo advisor Subscribe to our feed here Subscribe or review us in iTunes Level 2 winners? We're now able to travel between provinces, visit friends and family, go out for dinner and even back to the office. Leisure is back, but is it investable yet? So who are the first winners as we ease out of hard lockdown? On the one hand, pent up demand is real. I was at a bush lodge over the weeken

Offshore / Tesla and Apple stock split today / Changes to the dow Jones; Salesforce.com will replace Exxon Mobil, Amgen will replace Pfizer and Honeywell International will replace Raytheon Technologies / Reports that Walmart and Microsoft liked up to buy TicTok / ADP Employment Report on Wednesday / New Zealand exchange closes three times last week after cyber attacks / CNBC reports that U.S. tech stocks are now worth more than the entire European stock market Local / Discovery updated update spooks markets / Famous Brands sells Tashas back to founder / Nedbank results (we now have 3 of the big 4) / Italtile results (still spending R800m on capex a year) / Northam results, great albeit 60% of their PGM basket is platinum. Buying back Zambezi pref shares. / Murray and Roberts results. Was a tough year but doing alright before the pandemic hit in March.

Simon Shares Day 153 of lockdown and Covid-19. Pro-active passive management Investec USD SP500 Autocall Upcoming events; 03 September ~ JSE Power Hour: Under the hood of a passive robo advisor Subscribe to our feed here Sign up for email alerts as a new show goes live Master Drilling (JSE code: MDI), strong and monster cash generation which shows the cash output when they're not spending on new rigs. Absa (JSE code: ABG) profits disappeared and bad debts hit 2.77%, but they say they expect bad debt levels to improve in the second half. Itatile (JSE code: ITE) everything down around 20% and they're still spending on capex at R600million a year. Adcock Ingram (JSE code: AIP), very solid. But does the lack of a flu season hurt thier over the counter drugs? Bidcorp (JSE code: BID) negative operational leverage (Revenue R121,1 billion, down 6,3%; Trading Profit R4,2 billion, down 37,6%; HEPS 741,3 cents, down 48,6%) Nedbank (JSE code: NED) HEPS down 69.2% and bad debts at 1.9%. Forecasting in the cur

Offshore / New highs for the S&P500 (and Nasdaq) / Between the market high on Feb. 19 and new high on Aug. 18, 38% of stocks in the index made gains while the remaining 62% posted losses / Apple hits US$2trillion and gets into a fight with Fortnight / Ryanair cuts September, October capacity by 20% on weak bookings / Japan’s economy shrank by nearly 28% in the second quarter & consumer spending declined 8.2% in the period / Gold struggling to hold onto $2,000 Local / Standard Bank kicks off banking earning season / Afrimat buys Coza iron ore for R300m / Tigerbrands sells value-added meat products business 7 HEPS 35%-40% lower. / Curro results & ADvTech update / PSG unbundles Capitec at close on Tuesday. 14 for every 100 PSG shares. / Goldfields HEPS up 4x as Nick Holland quits as CEO.

Simon Shares Day 146 of lockdown and Covid-19, new cases definitely on the decline and hence we're now in level 2. S&P500 closed Tuesday at all-time highs. Sasol (JSE code: SOL) after liking the update the market does not like the results. Truworths (JSE code: TRU) has now written down GBP231million of the GBP256million they paid for Office in 2015. Afrimat (JSE code: AFT) buys Coza iron ore for R300m. Tigerbrands (JSE code: TBS) sells value-added meat products business. PSG shareholders holding the share at the close on Tuesday will receive 14 Capitec* (JSE code: CPI) shares for every 100 PSG shares. City Lodge (JSE code: CLH) rights have ceased trading and the share is off almost 30% as many sell their new shares they paid 212c for via the rights issue. Curro (JSE code: COH) results were okay but Keith McLachlan notes that their older schools are losing students at an alarming rate. Curro puts out tough results.. The real worry? Have a look at the massive outflows of students from their mature scho

Offshore US Retail sales disappoint - rise 1.2% in July vs 7.5% gain in June But new unemployment claims finally drops below 1million, the first time in 21 weeks UK GDP horror Chinese retail sales dropped 1.1% YoY, for the 7th seventh month US stimulus (trump EOs) Tesla 5:1 split via a special dividend Airbnb is filing for IPO this month with plans to go public by the end of the year. Local Sasol results (before open on Monday) Level 2 here we come? Capital Counties results City Lodge new shares start trading, they need about 35% occupancy to break even. Richemont ‘loyalty dividend’ a three-year warrant.

“This week’s episode of JSE Direct is courtesy of IG, our preferred supplier in trading products.” Simon Shares Day 139 of lockdown and Covid-19, new cases definitely on the decline. Clicks (JSE code: CLS) trading update again shows that this company is a machine. Revenue +10% for the 49 weeks to 9 August 2020. Residential property, at the lower end, doing really well. Gold $2,044 last week, hit $2,080, then $1,860. Now $1,935. US WeChat ban. Tencent (Hong Kong share code: 0700) beats expectations. Revenue up 29% YoY. Profit surges as growth hits the fastest pace in two years. Tesla (Nasdaq share code: TSLA) 5:1 split via a special dividend. Upcoming events; 20 August ~ JSE Power Hour: Pro-active passive management Subscribe to our feed here Subscribe or review us in iTunes When bad news is good news The Sasol (JSE code: SOL) trading update reports write-downs of R112billion while the market cap was R95billion and a loss per share (EPS) of around R140 while the share price was R155. Yet the stock

“This week’s episode of JSE Direct is courtesy of Outvest, our preferred supplier in retirement products.” Simon Shares Day 132 of lockdown and Covid-19, new cases definitely on the decline. Pick 'n Pay (JSE code: PIK) update was somewhat of a horror show, but I'm not sure what the market was expecting. It is for the period of lockdown and includes a voluntary retrenchment that cost the company. The Shoprite* (JSE code: SHP) on the other hand was for a full year to end June, so only three months of lockdown. Solid update and they're exiting Nigeria. Subscribe to our feed here Subscribe or review us in iTunes Gold $2,044. Goldfields (JSE code: GFI) update says HEPS will almost double and this is for the six months ending June when gold was under $1,800. Cashbuild (JSE code: CSB) buying TBC from some R1.1billion. Looks like a decent price and while they could write a cheque they'll use debt. So the question is can management execute on the merger? Intu (JSE code: ITU) will be delisted from the JSE In

Offshore / US earnings season / Q2 GDP data is coming in at about -10% / US jobless claims remain stuck at around 1.4million and CARES has ended, albeit congress is in talks / Alphabet says WFH until summer 2021 & Zuckerberg says there’s ‘no end in sight’ for Facebook employees WFH / Big tech results (Amazon, FB, Alphabet & Apple) knock it out the park / Big tech breakup congressional hearings Local / Steinhoff wants to settle claims / Europa Metals booms 16,000%, except it didn’t (500:1 consolidation) / ANG ceo quits / Vivo Energy results as fuel sales decline / GLD closes July at an all-time high / City Lodge rights issue 13:1

Simon Shares Day 126 of lockdown and Covid-19, cases may be moderating? Sasol (JSE code: SOL) sells some assets for R8.5billion and the stock is up over 12%. The sale is SA gas operations at Secunda. A sale and leaseback as Sasol only customer. But gets Sasol cash to pay down debt so good news short term, less so long-term. Korean websites also reporting on a possible 50% sale of US Ethane Cracking Center for US$3.3billion, which cost +US$12billion to build (for the other bits as well). Trading update due next week will give more details about the LCCP right downs which will surely be massive, but as importantly also maybe on the possible rights issue? Gold above US$1,900 and looking strong, albeit as I say that it'll now surely collapse in a heap as even I now own gold stocks? South Africa gets a US$4.289billion loan from the IMF. It's a very small amount and at great terms of around a 1% interest rate, albeit currency risk has to be hedged out. Upcoming events; 20 August ~ JSE Power Hour: Pro-active p

Offshore / 1.42 million Americans applied for unemployment benefits in the week ending July 18, up from 1.3 million a week earlier / Gold through $1,900 / EU leaders have agreed to a €750b ($857b) stimulus package (US is in talks for their next round of support) / Tesla into sp500 / Results; Microsoft msft & Intel intc Local / MPC rate cut / IMF loan to be announced tonight, R70billion / MTN update Vodacom / Datatec update / Sasol update

Simon Shares Day 119 of lockdown and Covid-19, cases may be moderating? Monday is 4 months of lockdown. Quantum Foods (JSE code: QFH) is coming back to earth after 1157c last Friday. Tech stocks in the US are flying. Expensive? yes, but. They have solid earnings, a moat and lots of new products they can roll out. Very solid Datatec (JSE code: DTC) update. From @keithmclachlan on Datatec valuations Westcon at $600m x R16.50 = R9bn + Logicalis x 10 PE x R16.50 = R5bn = R14bn.. Less 10% head office = R12.6bn equity value against R5bn current market cap.. Listen ==>> https://t.co/HeaMQxTCYK@Moneyweb #MoneywebNOW — Simon Brown (@SimonPB) July 22, 2020   Long4Life* (JSE code: L4L) buying back 40million shares at 275c which is less than 50% of the last stated net asset value. The PSG (JSE code:PSG) AGM talks about PSG 3.0. The Zeder (JSE code: ZED) AGM was a mess as directors didn't take all the question that were asked via the virtual system Best execution rule is coming to South Africa and this is a bi