🌍 World Wide Markets Ep. 648 – Cash-Rich Companies, Fed Cuts & China's Housing Woes

Host: Simon Brown Date: 17 September 2025

📉 China's Housing Market

• New house prices fell 2.5% YoY – still negative since May 2022.
• Bottomed in October 2023 (-5.9%) and now trending upward.
• Reflects weak Chinese consumer confidence, similar to South Africa 🇨🇳🇿🇦.
• Evergrande's collapse still casts a shadow.

Chinese New Home index YonY

🏦 Central Banks in Focus

FOMC (US): Decision due Wednesday evening.

• Market expects 25bps cut, with more cuts likely in Oct & Dec.
• US unemployment says "cut", inflation says "don't cut" – a real policy squeeze.
• Trump pushing for FOMC shake-up & questioning quarterly reporting 📊.

MPC (SA): Decision Thursday.

• Inflation at 3.5%, close to target.
• Mixed economist views: some say no cuts until 2027, others see cuts sooner.
• Fed cuts could influence SARB moves via rand 💵➡️🇿🇦.

📊 Trump vs. Quarterly Results

• Trump suggests companies report every six months instead of quarterly.
• Argument: reduces costs and red tape.
• Counterpoint: US market's strength lies in transparency & discipline from frequent reporting.
• Unlikely to change, but sparks debate on market "exceptionalism" 🇺🇸.

🏢 Three Stocks With More Cash & Investments Than Market Cap

1. 📰 Caxton (JSE:CAT)

• 💰 Cash: R3bn + R1.3bn stake in Mpact.
• Market cap: R4.4bn → stock "almost free" if stripped for parts.
• Dividend payer, PE \~7, yield \~5%.
• Not flashy, but offers Buffett-style margin of safety.

2. 🚚 Supergroup (JSE:SPG)

• 💰 Cash: R5.2bn, but liabilities of R9.5bn linked to assets held for sale.
• Supply chain, dealerships, fleet solutions.
• Debt-heavy, UK exposure risky 🇬🇧.
• Verdict: less attractive vs. Caxton.

3. 🛒 Pick n Pay (JSE:PIK)

• Owns 65.6% of Boxer → worth \~R20bn.
• Plus R5bn cash, R1bn debt, R2.8bn deferred tax asset.
• Market cap \~R20bn → potential undervaluation.
• PE ugly now, but 2027/28 earnings growth could re-rate it.
• Selling down Boxer stake could unlock value.

⚒️ Mining & M&A

Anglo American buying Teck Resources (Canada, copper focus).

• * Increases copper weighting to \~⅔ of revenue.
• Head office shifting to Toronto 🇨🇦.
• Deal raises takeover questions – could BHP* come back for Anglo?

🇨🇳 Nvidia vs. China

• China says Nvidia violated anti-monopoly laws (linked to 2020 acquisition).
• Also probing Texas Instruments for "dumping".
• Comes as US-China trade talks continue, TikTok deadline looms ⏳.
• Possible bargaining chip in ongoing negotiations.
• Simon still holds Nvidia.

🧠 Next Week: Second Brain Special

Simon explains how to build & use a "second brain" for decision-making & information management. Because our brains are great at decisions 🧠✔️ … but terrible at remembering ❌.

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Simon Brown

* I hold ungeared positions.

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