WorldWide Markets with Simon Brown

• Anglo-American's decision to unbundle its stake in Anglo-Platinum raises concerns.
• Declaring a special dividend of R59 per share wipes out the company's entire R17.6 billion cash reserves.
• Implications for investors: selling pressure expected as shares land in new brokerage accounts.

• The appearance of Jack Ma and Xi Jinping together could mark a softening stance toward tech companies.
• Alibaba partners with Apple, integrating its AI into Apple's ecosystem.
• Is China reopening the door for its tech giants?

• Global indices continue to hit all-time highs, with AI and tech stocks leading the charge.
• Not just tech: European and Asian markets show strength.
• Are valuations stretched, or is there more room to run?

Simon Brown

* I hold ungeared positions.

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• Sasol Reversal Pattern? – Examining Sasol's technical setup and the significance of a 'kangaroo tail' pattern.
• Rand Stability Amid Trump's Threats – Despite geopolitical concerns, the rand remains steady.
• Top 40 at All-Time Highs – Market momentum and investor confidence.

• Revenue shortfalls and potential tax bracket adjustments
• Universal Basic Income and National Health Insurance funding discussion
• Expectations for the fiscal policy outlook

• Telkom: Revenue up 0.9%, in a turnaround phase, but Simon remains skeptical about telcos.
• Santam: Strong earnings growth (40-60% increase in HEPS), but insurance sector risks remain.
• Shoprite*: Consumer stock pullback; long-term bullish outlook despite short-term pressure.

• Alibaba up 40% on Apple collaboration
• Satrix China ETF – is it time to reconsider investing in China?
• General sentiment split between 'China is uninvestable' vs. 'China has potential'

• SA Bonds Showing Volatility: A significant move in bond yields post-Trump comments, raising concerns about borrowing costs.

Simon Brown

* I hold ungeared positions.

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• Initial tariffs of 10% (China) and 25% (Canada, Mexico) announced but later revised.
• U.S.-Canada relations strained, with Warren Buffett warning of reputational damage.
• Global negotiation shifts—China, Russia, and Europe eye opportunities.
• Continued U.S.-China trade tensions, including semiconductor restrictions and rare earth tariffs.
• Market volatility expected; long-term investment strategies recommended.

• Volatility is high—avoid panic selling.
• Keep cash reserves for opportunities (buy the dip cautiously).
• Long-term focus: presidential terms are temporary, investments span decades.

• Bank of England expected to cut rates.
• U.S. Fed Chair Jerome Powell pauses rate hikes due to inflation concerns.
• South Africa's MPC cuts rates, prime now at 11%.
• Analysts predict one to two more rate cuts in 2024.

• Gold price hovering near $2,900, with potential to break $3,000.
• Supply constraints—minimal new gold mining projects.
• Strong central bank purchases—1,000+ tons bought in 2023.
• Retail ETF inflows return after three years of outflows.
• Gold miners like Harmony, AngloGold*, and Pan African positioned well.

Gold weekly | 06 February 2025

Retail Sector & Consumer Spending:

• Mixed trading updates: Pick n Pay and Boxer show early turnaround signs.
• Modest growth in TFG, Mr. Price*, and Clicks; Shoprite* remains strong.
• Cautious consumer spending patterns persist.

• Initial withdrawals lower than expected—around R50 billion.
• Future ongoing withdrawals expected as a structural component in SA's economy.

• January sales at 46,400—stronger than expected.
• Used car market expanding, Chinese brands gaining traction.
• Auto sector investment options: CMH*, Motus, and Zeda.

Such African monthly vehicle sales

• Six-month trading update—earnings per share around R14.
• Continual asset write-downs and operational challenges.
• PE ratio suggests market pricing for bankruptcy, but survival likely.
• No clear turnaround signals yet—investors should wait for stronger confirmation.

Simon Brown

* I hold ungeared positions.

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00:00 Market Overview and Podcast Introduction 01:10 Trump Tariffs and Global Trade Dynamics 06:25 Interest Rates and Economic Implications 10:02 Gold Market Trends and Predictions 12:51 Retail Sector Performance and Consumer Behavior 14:17 Vehicle Sales Insights and Market Trends 16:40 Sasol's Financial Challenges and Future Outlook

The Cristal Challenge runs until October, with participants picking five local stocks (no ETFs or sub-20c stocks) to hold through the year.

Simon's picks include a mix of stable "banker" stocks and speculative plays:

• High-end luxury giant with strong fundamentals and global market appeal despite challenges in China.
• Trading near R3,500, with long-term potential boosted by luxury market recovery and stable global demand.

• Dominant grocery retailer in South Africa, benefiting from market share growth and diversified business lines like 60/60 delivery.
• A steady performer with consistent earnings growth and market dominance, trading at a PE of 24.

• Education sector leader, well-positioned to meet growing private schooling and tertiary education demands.
• Education giant trading below its historical PE average, supported by asset-light growth strategies.

• Affordable housing developer, thriving on demand for low-to-mid-income housing in South Africa.
• Value pick with a PE below 3 and a focus on affordable housing, addressing a critical market need.

• Innovator behind EasyEquities, leveraging platform fees and expanded product offerings to drive revenue growth.
• Growth potential through EasyEquities' platform fees, rising customer base, and additional financial products.

Simon Brown

* I hold ungeared positions.

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TSMC's Record-Breaking Results

Taiwan Semiconductor Manufacturing Company (TSMC) hit $26 billion in quarterly revenue. A strong contender in the AI supply chain with growing global operations.

Gold remains a strong investment pick for Simon, with a potential to hit $3,000/oz.

Gold | Weekly | 21 January 2025

Rising oil prices could hurt both the global and South African economies.

Trump and Melania meme coins: Novelty or nonsense? Simon unpacks the hype.

Operational risks in Mozambique but potential opportunities with Transnet's private rail plans.

Simon's picks for the Cristal Crystal Challenge: Shoprite*, Purple Group*, ADvtTch*, Calgro M3*, and Richemont*.

Simon Brown

* I hold ungeared positions.

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For the twelfth year in a row Marc Ashton, Keith McLachlan & Simon Brown get together and make three predictions each for year ahead.

They then also give their expectations for the local Top40 index and the Rand against the US$.

But first every year they start by scoring their previous year predictions to keep things real and honest.

In the final show of the year Simon looks back at the many local and offshore winners (and a few losers) of 2024. There have been some excellent returns, but will they carry on into 2025?

• Boxer* (JSE code will be BOX) lists on 28 November, debuting at R54/share after a highly oversubscribed IPO.
• Strategies discussed for trading or investing in Boxer shares, including buying through Pick n Pay shares.
• Key takeaway: Patience is key; wait for potential pullbacks.

• Early evidence of consumer spending from the two-pot retirement system.
• Stocks like Mr. Price*, Pepkor, and Keith McLachlan's picks (e.g., Afrimat, Netcare) reviewed as beneficiaries.

• Launched in 2000, the Satrix 40 has delivered an annualized return of 11.3%.
• Impact: Introduced passive investing and slashed fees for South African investors.

• Bitcoin fell short of the $100K milestone, retracing to around $93K.
• Analysis of big psychological levels in markets and what this means for Bitcoin's momentum.

Bitcoin | Weekly | 27 November 2024

• Anglo-American reduces its stake in Anglo-Platinum, selling at cycle lows.
• Discussion on PGM market challenges and future outlook.

• Announced 10% tariffs on all Chinese imports and 25% on goods from Mexico and Canada.
• Potential economic implications and geopolitical fallout analysed.

• The Rand holds surprisingly well despite DXY strength; predictions for 2024 suggest potential recovery.
• Gold price fluctuations and long-term bullish outlook.

US$ Index (DXY) | Weekly | 27 November 2024

• Coffee prices hit 20-year highs due to Brazilian droughts, impacting consumer costs.
• Cocoa prices stabilise after a surge, with Nestlé and soft commodity ETFs in focus.

• SG Fleet receives a buyout offer, boosting share prices.
• Opportunities in second-tier stocks like Invicta and Hudaco highlighted for a potentially improving economic environment.

• South African Reserve Bank increases rates by 0.25%, citing risks from core inflation and external pressures.

Simon Brown

* I hold ungeared positions.

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00:00 Market Overview and Boxer IPO Insights 03:08 Two-Pot Money and Consumer Spending Trends 06:03 Satrix 40: A 24-Year Retrospective 08:51 Bitcoin's Psychological Barriers and Market Sentiment 11:40 Anglo-American's Strategic Moves and Market Reactions 14:58 Commodity Prices: Coffee and Cocoa Trends 17:49 Monetary Policy Committee Decisions and Economic Outlook

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• Local CPI at 2.8%, yet prime is 11.5% ahead of the MPC decision this afternoon.
• The gap is far to wide, SARB needs to cut aggressively.

South Africa | Prime vs. CPI

• Gold has bounced, but is this for real?
• Bitcoin heading for US$100k

• The US$ remains string and is hurting the Rand.

US$ Index

• Good results
• Paid back R1.1billion short-term debt
• But volatile, a trading stock.

Simon Brown

* I hold ungeared positions.

All charts by KoyFin | Get 10% off your order

Crypto Surge, Gold Decline: Bitcoin rallies as investors shift from gold to crypto. Gold hit a recent high of $2,800 but is now pulling back, possibly towards $2,300-$2,400. Central banks continue to buy gold as a hedge against U.S. dollar dominance and geopolitical risks.

[caption id="attachment_43623" align="aligncenter" width="849"] Gold | Weekly | 13 November 2024

Rand Weakness: The ZAR weakened above 18 to the dollar, driven by strong U.S. dollar demand amidst market volatility. South African Rand overshoots due to its high liquidity, making it vulnerable to sharp moves.

Market speculation suggests Trump may be crypto-friendly, unlike the current SEC chair Gary Gensler, known for his strict regulatory stance. Potential shifts in the regulatory landscape could benefit cryptocurrencies, particularly Bitcoin.

Simon holds Bitcoin and advises caution: ensure crypto is stored in a hardware wallet for safety.

Bitcoin | Weekly | 13 November 2024

Both companies struggle with weakened African currencies like the Ethiopian Birr and Egyptian Pound. Profits are impacted when converted back to ZAR.

Despite attractive dividend yields (MTN ~4%, Vodacom ~5.6%), Simon remains bearish, highlighting high capex demands and sector challenges.

Strong results from Raubex, showing resilience in a struggling sector. Diversification into renewable energy and mining operations boosts performance.

Simon notes it as one of the few quality construction plays left, alongside Afrimat.

Updates from AVI and BidCorp indicate persistent weak consumer demand, despite optimism from a possible government of national unity. Inflation has eased, but consumer spending remains subdued as households repair balance sheets.

Retail updates show mixed results: Truworths reported disappointing numbers, while The Foschini Group* performed better.

Tencent posted strong results, though it did not significantly boost Naspers or Prosus stock prices. The market reaction was muted despite the solid performance.

The market remains volatile, with significant moves in crypto, gold, and the Rand. Simon advises a cautious approach, with a focus on quality stocks and long-term plays.

Remember: be kind and look out for others. Kindness is rule number one.

Simon Brown

* I hold ungeared positions.

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00:00 Market Overview: Crypto vs Gold 02:50 The Trump Effect on Gold and Crypto 06:01 The Future of the Rand and Emerging Markets 08:55 Sector Analysis: Vodacom, MTN, and Raubex 16:02 Consumer Trends and Company Updates

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