JSE Direct with Simon Brown JustOneLap.com

Introduction:
Simon Brown kicks off the episode discussing the current state of the Rand, noting its stability leading up to the elections despite fluctuations. Speculation around ANC's momentum in the polls and potential coalition scenarios. The impact of the dollar's weakness on the Rand's performance.
Structured Products: Simon delves into the concept of structured products, which offer capital guarantees and enhanced returns through strategic investment mechanisms like options and bonds. Announcement of an upcoming Power Hour with Standard Bank focusing on structured products. Brief overview of actively managed certificates, also at next weeks Standard Bank Power Hour. FNB's New ETNs: FNB's introduction of new Exchange Traded Notes (ETNs), including a variety of indices and US-listed stocks. Explanation of Compo and Quanto variations, tailored to currency impacts. Highlights of recently launched ETNs, such as Nvidia, Booking Holdings, Eli Lilly, and Palo Alto Networks. Amazon.co.za's Arrival: Simon provides insights into Amazon.co.za's debut in South Africa, discussing initial observations and comparisons with local competitors. Discussion on the potential impact of Amazon's entry on brick-and-mortar retailers and existing online platforms. Exploring Small Caps: Simon poses the question of whether local small caps on the JSE offer value or pose as value traps. Definition and implications of value traps in investments, emphasising the importance of dividends and price appreciation. Insights from John Biccard of Investec on potential post-election performance in small caps. Examination of various small cap stocks, analysing dividend yields, price-to-book ratios, and earnings potential. Simon's perspective on the opportunities and challenges presented by small cap investments, urging caution and strategic analysis. * I hold ungeared positions.
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Rate Cuts and Economic Outlook Jerome Powell's statement from the FOMC meeting: "Inflation remains too high and the path forward is uncertain." No rate cut was announced at the FOMC meeting. Speculation on upcoming rate cut possibilities and their impact on the economy. Local economic outlook and potential changes due to the upcoming election. BHP Group's Interest in Anglo-American BHP Group's* proposal to buy parts of Anglo-American, leading to market speculation. Complexities of the deal and potential impact on stock prices. Analysis of BHP Group's interest in Anglo-American's assets, particularly in copper Potential effects of the deal on the Johannesburg Stock Exchange (JSE) and overall market sentiment. Historical context of Anglo-American's significance in South Africa's mining industry. Chinese Market and Economic Data Overview of China's economic challenges and recent data indicating resilience. Discussion on Chinese stock market performance and factors influencing consumer sentiment.
Oil Market Dynamics Analysis of recent fluctuations in oil prices and underlying supply-demand dynamics. Impact of US oil production and global economic conditions on oil prices. Implications for South African consumers and petrol prices.
Retail Bonds and Sygnia ETF Changes Update on retail bond rates for May and potential changes in June. Sygnia's planned changes to ETFs, including the Fourth Industrial Revolution and Fang AI funds. Clicks Results and Market Analysis
Review of Clicks' financial results and market response. Analysis of Clicks' performance in the retail sector and future outlook. Discussion on Clicks' valuation and potential investment opportunities. * I hold ungeared positions.
 

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Capitec Results: Simon analyzes Capitec's recent financial results, highlighting strong metrics such as return on equity, active clients, and app usage. However, he notes concerns about the bank's expensive valuation compared to its competitors. SARB Monetary Policy Review: Simon discusses the South African Reserve Bank's recent review, indicating a reluctance for rate cuts in the near future due to inflationary pressures and economic uncertainties.
Key takeaway from the bi-annual Monetary Policy Review of the @SAReserveBank:
Don’t bet on a domestic interest rate cut this year. https://t.co/mhRS5vKIFQ pic.twitter.com/sc5p9GPcf5
— Adrian Saville (@AdrianSaville) April 24, 2024
 
Sasol Woes: Simon discusses Sasol's poor performance following a production update, expressing skepticism about its future prospects despite its low stock price.
Other Market Updates: Simon touches on Tencent's positive performance, gold and oil price movements, and the potential impact on global markets
* I hold ungeared positions.
 

UK and Local Inflation:
UK inflation surprises at 3.2%, lowest in over two years. US Fed unlikely to cut rates soon, waiting for FOMC meetings. South Africa's CPI data for March at 5.3%, showing a positive trend. Potential for SA rate cuts, depending on US decisions. [caption id="attachment_41866" align="aligncenter" width="849"] SA Inflation 5.3% for March 2024[/caption]
China and Commodities: China's GDP surpasses expectations at 5.3%, amid concerns over Fitch downgrade. Export data reflects overstocking, driving prices down. Despite challenges, China's market appears interesting. [caption id="attachment_41867" align="aligncenter" width="849"] Chinese GDP YearONYear per quarter[/caption]
PGMs, oil, gold, and other commodities. Gold remains strong, targeting $2500. Recent attack on Israel by Iran affects oil prices. WeBuyCars listing and potential market impact. Transaction Capital analysis and investor considerations.

Purple Capital* Results: Purple Capital swings back to profit, surprising the market. Key financial highlights and insights into EasyEquities performance. Exploration of new products and their impact on revenue. Analysis of client cohort growth and its implications. Positive outlook on Purple Capital's performance. Expectations of potential price pullback. Simon Brown
* I hold ungeared positions.
 

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Sasol Secunda Reprieve Recap of Sasol's recent developments. Minister's agreement to Sasol's appeal regarding emissions at Secunda. Stock bounce and support level analysis. Target prices discussion and outlook for Sasol.
PGM Miners' Performance Analysis of platinum group metal (PGM) miners' performance. Notable increases in stock prices. Consideration of factors affecting the industry, including production cuts and demand for catalytic converters. Exploration of whether the current uptrend indicates the beginning of a bull market. Discussion on supply and demand dynamics in the PGM market. Mention of Sibanye Stillwater's* CEO's forecast. Reflecting on year-to-date performance of PGMs. Insights into the future trajectory of PGM prices and potential risks. [caption id="attachment_41807" align="aligncenter" width="849"] PGM and miner moves for the month of April up to the 9th[/caption]
Fitch Cuts China's Outlook to Negative Overview of Fitch's downgrade of China's outlook. Analysis of implications for the Chinese economy. Examination of the performance of Chinese stocks. Commentary on factors contributing to China's economic struggles. Exploration of potential effects on global markets.
WeBuyCars Listing Preview of WeBuyCars' upcoming listing. Discussion on the valuation and market cap of WeBuyCars. Comparison with Transaction Capital. Speculation on market demand for second-hand cars and implications for WeBuyCars' growth strategy. Evaluation of WeBuyCars' disruptive potential in the automotive industry. Inflation Targeting Discussion Analysis of the South African Reserve Bank's inflation targeting strategy. Exploration of the history and purpose of inflation targeting. Evaluation of the current inflation target and potential for revision. Discussion on the process and implications of lowering the inflation target. Advocacy for starting the conversation on revising the inflation target to ensure long-term economic stability.
Simon Brown
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* I hold ungeared positions.
 

Commodity Market Analysis Oil prices are on the rise, currently trading around $89 per barrel, indicating both demand and supply factors at play. Factors affecting oil prices include supply disruptions from Russia and Saudi Arabia's production cuts through OPEC+.
Concerns about inflation are reflected in the rising price of gold, which is currently trading at all-time highs above $2300 per ounce.
Despite uncertainty, inflation is not expected to decrease soon, especially with increasing energy costs Discussion on the delayed rate cuts by the US Federal Reserve and the global outlook on inflation. Implications of Goldfield's Chilean Mine Production Goldfield's Chilean mine is expected to produce gold at significantly reduced costs in the coming years, potentially impacting global gold supply. Analysis of the time taken for new mines to commence production, highlighting the challenge of meeting future demand. Tax Collection Insights from SARS SARS reports an additional R10 billion in tax receipts, contributing to a total of R1.7 trillion in tax collections. While individual tax collections saw an increase of 8.2%, company tax declined by 9%, reflecting challenges faced by various sectors, including retail and mining. Performance Review of ETFs (full list here) Top performing ETFs in the first quarter of 2024 include those focused on international markets, particularly in technology and Japanese sectors. Conversely, local ETFs, especially those tied to South African markets, experienced declines. Analysis of factors influencing the performance of specific ETFs and their compound annual growth rates (CAGRs). Simon Brown