Last week I wrote about never letting a good crisis go to waste. It's one of the most difficult things for investors to do while you're in the thick of it. You don't want to deploy capital when things look like they are going to get worse, much worse. But that is the precise time to “slowly drip” capital into the market. It's an investors primary focus to look past the noise to see opportunity... ››› more
It's been a tough few weeks for South Africa.
It all started when finance minister, Tito Mboweni, unveiled yet another bailout for Eskom. The R59 billion taxpayer band aid then spooked international investors and prompted announcements from ratings agencies Fitch and Moody's.
Both echoed the usual concerns about slowing growth, rising government debt and the inability of our policy framewo... ››› more
I'm sure you have seen the headlines signaling the Rand is on a downward spiral. We highlighted the Rand being at risk of weakness when it was below R13.90 to the USD two weeks ago. It's lost almost 3% but recovering steadily.
This bout of weakness is on the back of Eskom's new lifeline of R59 billion, over the next two years. After government committed R69 billion over three years earlier thi... ››› more
Early on Tuesday last week, Finance Minister Tito Mboweni announced that Eskom will be receiving an additional R59 billion over the next two years, to help Eskom service its debt.
There are mixed reviews about the bill and how it will help South Africa.
Some people say this could be the light at the end of the tunnel and others say it's just another wait for an oncoming train…
As ... ››› more
EOH's share price has pulled back and our stop loss at R24 helped us protect 71% of our gains. The share price has pulled back to R20.00 and the company has indicated the forensic inquiry has identified R1.2 billion in suspicious payments.
This is not a massive number and signals that the turn around in EOH will materialize over the coming months as Stephen van Coller delivers on his strategy. ... ››› more
The rand has only just broken back below the key R14/$ level and I can tell from the client flows going through our treasury desk, many South Africans are once again keen to get money out of the country.
The USD/ZAR exchange rate was well over R15/$ just a few weeks ago.
This means, the rand has firmed up around +7.75% in the last month-and-a-half. Put another way, that's about a year's wo... ››› more
The Rand has staged a stellar rally. Strengthening from above R15 against the USD to below R13.90. It came within half a cent of our R13.8550 target against the USD but the price is consolidating. It's time to bank our profits after a 6.24% gain, with gearing your gain could have been more than ten times larger.
Trading the other way and going long the USD against the ZAR has good risk to rewa... ››› more
Gold's been a form of money, an investment and a store of value for almost as long as modern day man has walked the earth.
Some argue gold is a barbaric relic that no longer holds the monetary qualities of the past. They say paper currency, or electronic currencies such as Bitcoin, are the assets of choice.
But the fact remains that gold has been a very stable appreciating asset for centur... ››› more
The G20 summit in Osaka, Japan has just finished.
Who would have thought this two-day conference could have such an impact on our stocks, economy and even our currency.
And even the bullish sentiment towards the world markets and the US dollar, has left South Africa in a troubled state for the rand for rest of 2019.
Today I'm going to discuss two reasons why I expect the rand to we... ››› more
The Rand fell over 3% from its open to close last week. This is on the back of Ace Magashule's surprise (and incorrect) inclusion of changing the Reserve Bank's mandate and possible quantitative easing. When you add the bad GDP growth figures, you can see why people panicked and sold the Rand for any price they could get. Typically, this herd mentality happens at exactly the incorrect time creatin... ››› more
South Africans are at the edge of their seats, with what's going on this year.
From the ongoing US-China trade war, never ending Brexit decision, South Africa going back into the dark ages, the spreading rumours that the US is about to enter a recession this year - and this is just the tip of the iceberg for 2019.
The worst is yet to come. And it all starts, and ends, with the rand.
To... ››› more
If you have a JSE portfolio, you know the markets have been bad for the last few years.
From the start of January 2015 until the end of February 2019, the JSE top 40 is up less than 15%, which is less than 5% per year. This is much less than the “normal” return of about 15% per year.
The recent underperformance of the JSE is a key reason many retirees are now experiencing a shortfall i... ››› more
On Friday Firstrand (JSE: FSR) released a positive trading update indicating earnings will be up over 22% on the back of its final payment for the Discover Card transaction.
This R2.3 billion is a welcomed boost for FSR as its operational earnings growth has matured and grows steadily in the high single digits.
Having been awarded the “Most Innovative African Bank” in 2017 and the “B... ››› more
The Rand has been one of the strongest EM currencies in the past few weeks, but the strength will be short lived. The Rand has been boosted by a dovish FED, an ECB trying to balance monetary policy and economic growth, and the easing of Trade War fears. But all the positives are fickle and cautious investors should be looking a few steps ahead.
Investors looking to diversify off... ››› more
Last week I made my first prediction on gold.
Click here to catch up if you missed it. Today I'm going to let you in on my 2nd prediction for the year – The South African rand.
In the last three months we’ve seen the rand strengthen from R15.40 down to R13,70.
We’ve seen the petrol price drop from over R16 down to R13,70 as well.
Whil... ››› more
The aim of any sports bettor is to make accurate predictions of what is likely to happen during an event.
A common mistake most sports bettors make when trying to predict a game of soccer, is trying to predict everything. From the result of the match, number of corners, will both teams score, under/over; the list just goes on and on…
Instead of trying to predict everything, focusing on o... ››› more
The rand has been buoyed by tighter monetary policy in Turkey, Russia and Argentina. Our local inflation data assisted in the strength even though the Reserve banks held rates on Thursday.
The Rand has gained over R1.30 against the Euro, USD and GBP in the past three weeks.
Investors tend to panic and run for the exit all... ››› more
The JSE remains in its consolidation phase but the current Rand weakness has created opportunities to buy some blue chips on the cheap.
The Rand has followed emerging market currencies lower over the past week on the back of concerns in Turkey. The Turkish Lira has more than halved in value as they deal with their own “Nenegate”.
The main reason for the Rand's significant weakness and ... ››› more
The JSE has remained buoyant after falling due to the ANC's EWC announcement last week. It's been range bound since breaking above its previous consolidation phase.
A rally into year-end is still on the cards thanks to several JSE heavy weights earning significant offshore revenue.
Stronger global growth and a rand that is facing headwinds into next year's elections should see earnings inc... ››› more
It's with great sadness I announce the demise of the rand!
In the last few weeks, we've seen the rand drop 19.13% from R11.50 to R13.70.
Thanks to dismal bond yields; declining GDP, increased borrowing costs and less money printing!
Of course, you are probably thinking… So what? Same old and why the drama?
Well, it's what I saw in my charts this morning that made me lose all hope... ››› more
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