BizNews Radio

Sasfin Securities’ David Shapiro sheds light on all the developments taking place across local and international markets, with a specific focus on the pressure faced by US equities at the latter end of last week. Despite international markets falling lower, the JSE has managed to climb to all-time highs, led by Rupert’s Richemont. Shapiro, who has been an advocate for technology-centric businesses for a while now, has picked index heavyweights Naspers and Prosus to outperform in 2022. Although the tech giants of the West continue to dominate, Chinese internet-based companies have had a year to forget; Chinese regulatory bodies spook investors. Much uncertainty lies ahead but the correction has gifted investors who believe in the Chinese growth story to get exposure to assets such as Naspers and Prosus at attractive valuations, given the decline. 

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In this episode of the BizNews Power Hour, South Africa's favourite market commentator David Shapiro gives his stock picks for 2022; currency expert Andre Cilliers from TreasuryOne gives us all the insight and happenings with the local and international foreign exchange markets; Jeremy Maggs chats to Chris Vick, Chairperson of Covid Comms, an organisation created with the aim to deconstruct Covid-19 scientific language with the aim of distributing comprehensible information in South Africa’s 11 official languages. Jeremy is also joined by Heather Casey Head of Brand at Investec where the two discuss Investec’s new campaign, 'Anything is possible', and how the new campaign stands out against the conventional themes associated with financial services planning.

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News headlines:

*An untimely dump of 17,718 historic Covid-19 cases on 22 November created the impression that South Africa had seen a dire spike in coronavirus infections - just as the country told the world about the Omicron variant.

*President Cyril Ramaphosa is expected to receive the report on vaccine mandates soon, as businesses, unions and health groups call for the policy to be implemented.

*Ahead of an anticipated "avalanche" of cases emanating from the State Capture Inquiry, the National Prosecuting Authority (NPA) has made corruption its priority, said prosecutions boss Advocate Shamila Batohi.

Opportune Investments founder Chris Logan sheds light on his investment stock picks for 2022. Given the uncertain macroeconomic environment we find ourselves in, coupled with high valuations, Logan decided to go with two low-risk South African businesses. The one is PSG-controlled Zeder, an agriculture investment holding company, which is currently under cautionary announcement relating to possible disposals. The thesis behind the Zeder investment is that its share price is markedly lower than the net asset value of the business and Logan is hoping management will be able to unlock this value through corporate action. His second pick is niche real estate business, Stor-age. It’s been one of the few successful South African property companies, having successfully diversified into the UK. He says while neither investment will be a multi-bagger, he expects a safe return from both. 

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BizNews founder Alec Hogg caught up with journalist, researcher and author David Williams, discussing the state of State-owned enterprise PRASA after CEO Zolani Matthews was fired over very 'questionable' dual citizenship grounds."There are a couple of issues here. [He comes] in and, from what one hears, he's trying to put things in place. Now, he's been dismissed apparently for having not declared a dual citizenship, on security grounds. You have to ask, what is so top secret about passenger rail?"

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The current coronavirus has disrupted the markets and created an environment where, in theory, active managers should thrive. However, rapid changes in the economic outlook and high volatility in the markets show that the performance of active managers gets much, much worse. Corion Capital CIO David Bacher unpacks the drivers of outperformance, indexed strategies and S&P sustainability. He notes that behind the uncertainty of the new Covid-19 variant, there’s been a lot of volatility in asset classes, best represented by the Volatility Index, which has shot up during November. 

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Counterpoint’s Piet Viljoen unpacks what the disastrous unemployment data means for South African-focused investments, with nearly half of the labour force without a job. Viljoen says the ruling party needs to implement urgent reforms in order for the South African economy to thrive. He also gives his two best stock picks for 2022: Sasol and Rebosis. Sasol has had an incredible year supported by strong oil prices and Viljoen explains that the lack of investment in this space will keep pricing robust for the foreseeable future. He also chose the real estate company Rebosis, a highly leveraged property business that seems to slowly be getting back on its feet. 

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In this episode of the BizNews Power Hour, ace money manager Piet Viljoen offers a couple of undervalued stocks worth adding to your bundle of stock twigs for 2022; David Williams revisits PRASA after the chaos deepened today with the firing of the recently appointed CEO Kgosie Matthews on extremely flimsy grounds; David Bacher looks back at the performance of investment markets in the month of November; and Gary Stroebel of BizNews's Namibian partner NOVO Fm talks to Alec Hogg about the stories making headlines in the past week.

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*Yesterday, BizNews reported the Ballito Rage festival had been cancelled owing to a total of 36 positive Covid-19 cases. Organisers of the Plett Rage have said the festival will continue, despite the risk associated with this decision. According to officials for the event, the festival has passed the point of no return, with 900 people expected to attend. Organisers have said only vaccinated party-goers will be permitted to enter.

*The Passenger Rail Agency of South Africa (PRASA) has terminated the employment of group CEO Zolani Matthews. The former chief executive was placed on suspension in November, with an investigation carried out in relation to his employment contract. Part of this was to distinguish whether Matthews had deliberately failed to disclose information of his dual citizenship. PRASA learnt of his UK citizenship after the State Security Department rejected Matthew’s top secret security clearance. The state-owned entity will begin with a recruitment process for a replacement CEO.

*Head of the Western Cape Health Department, Dr Keith Cloete, has said the province has officially entered a Covid-19 resurgence, following increased infections. Cloete remarked that the week-on-week percentage change in the seven-day moving average of new cases has been more than 20% for more than a week.

*Petrol prices reached a record high this week, with some South Africans paying R20 a litre to fuel their vehicles. Despite the ongoing financial challenges facing ordinary citizens, Minister Gwede Mantashe has said that if e-tolls are abandoned, fuel prices will, most likely, increase even further to cover the costs.

The hard-hitting Magnus Heystek compares the BizNews share portfolio’s performance to some of South Africa’s largest asset managers that have greatly underperformed offshore-focused funds over the past decade. Alec Hogg’s BizNews portfolio is focused on exponential companies that can grow at more than 20% per annum; the portfolio includes the likes of Apple, Amazon, Microsoft and Netflix. The point Magnus is trying to convey is that many South African savers lack diversification and offshore exposure in their portfolios, which have made them poorer as a result. The South African economy has been beaten to its knees. The unemployment data released earlier this week shows that … with no signs of a recovery. Magnus also announces his first bitcoin purchase, the investment strategist having a change of heart following an investment conference he attended. 

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