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
Q. “Last month, you sent out an article about the Fibonacci sequence, explained how the different ratios act as support and resistances on any high traded market and gave us a trading strategy.
I found this fascinating and would like to try and build a Fibonacci calculator for currency pairs and markets that aren't available to trade on my trading platform.
Could you help share with me the... ››› more
Q. "I received a trade from PickPocket Trader last week to short the rand using CFDs. Could you tell me a formula I can use to know how many CFDs I must sell, in a way that I don't lose more than 2% on my R35,000 portfolio?"
A. The CFD calculation for Forex currency pairs is a little different to the calculation you need for buying stock CFDs.
Here's a formula you can use for currency CFD... ››› more
Bidcorp's attempted breakout above the R320 per share resistance level failed, this is the third time since 2017 that Bidcorp's share price failed to move above R320.
The share price has pulled back over 3% with further advances unlikely, investors should look to lock in profits as the share price is on a standard deviation of 2.4. This signals a pullback is likely, and a retracement has starte... ››› 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
Telkom released annual results last week and its share price soared after a brief pull back. It has rallied over 50% year to date. Investors were expecting information on the potential property portfolio unlock. Nothing concrete has been delivered.
The CEO Sipho Maseko highlighted “Our strategy to separate our property and mast and tower portfolio to increase management focus and unloc... ››› more
This week I received a message from a friend, P, saying: “Celebration time - we sold the property and took a big loss”
Usually you'd not celebrate when taking a big loss on an investment.
But in this case it is a good thing.
And as soon as I explain I hope you'll see that selling an investment at a loss isn't always losing…
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If this support level holds, we could see our market run to record highs. And the elections could be the catalyst for a strong bounce and rally to the previous highs.
The old stock market adage of “sell in May and go away”, seems to be ringing true for the JSE as we approach May. The JSE (Top 40 future) is pulling back, testing a crucial support level.
This back-up plan will allow Americ... ››› more
On Wednesday 10 April 2019 EOH shares traded at a low point of 946c.
By 10:00 Am on Tuesday 16 April 2019 the share traded at 1625c, up 71.77% in less than 7 days!
That must be one of the biggest runs a stock has done on the JSE this year!
But here's the thing - since 30 September 2016 EOH shares are still down 90% from their level of R176!
So, what does this mean for investors lik... ››› more
Wescoal's share price has pulled back all the way to levels last seen in 2016. The company recently announced a change of the guard as it appointed Reginald Demana, a Nedbank Capital resources banker, from 1 April. This follows the sudden departure of Waheed Sulaiman in January.
WSL share price is also depressed as small and mid-cap stocks remain out of favour, mostly due to these companies be... ››› more
Dischem (DCP:JSE) has pulled back considerably in the past two weeks to its May 2018 low. This isn't on any company specific news, but a broader sell off in the related retail stocks following lacklustre results. Clicks trading update for the 20 weeks to 13 Jan 2019 weren't fireworks, but highlights consistency and a demanding valuation.
Dischem’s results for FY 2019 due... ››› more
After a turbulent 2018, emerging markets are finding favour amongst investors looking for value with strong upside potential.
This is on the back of a few major themes that should play out:
1. A dovish FED that is expected to only hike rates once in 2019,
2. EU monetary policy that will remain accommodative,
3. Chinese stimulus to avoid a “hard landing”,
4. Glo... ››› more
Most investors are losing patience with the JSE as returns have been non-existent.
The JSE All-Share index is back in it's previous trading range - which is pretty much 2014 levels.
The problem with investors losing patience and selling, is they do it at precisely the wrong time.
The Magellan fund managed by Peter Lynch achieved a remarkable 29% annualised return between 1977 to 1990 b... ››› more
The JSE is at the whim of global sentiment. And one thing every investor should remember is sentiment drives prices, but company values change much slower.
This provides investors with opportunities to accumulate mispriced shares at much lower prices than they previously did or could.
As the market takes a leg lower, investors should look to accumulate quality companies on the cheap.
... ››› more
In 1954, 24-year-old Warren Buffett received a phone call that would ultimately change his life.
The person on the other line offered Buffett a job in New York City and he accepted without asking about the salary.
It was arguably the smartest - and most profitable - decision he ever made.
That's because Buffett knew the man who had just employed him. A man he studied under at Columbia Uni... ››› more
While October was the month we had Black Tuesday in 1929, Black Monday in 1987 and a big sell off in October 2008 post Lehman's collapse, it generally ends the month up.
Over the past 100 years the Dow and S&P have ended positive 62% of the time with an average gain of 0.4% but with heightened vola... ››› 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
Trump dialled down his trade war antagonism by pushing for less tariffs with Europe. This saw investors focus on other data which provided support for riskier assets like the Rand.
Last week we had a positive BRICs summit, the ECB held interest rates steady, US advance GDP came out at 4.1% from 2.2% previously, and China indicated a willingness to ease monetary policy further to support domesti... ››› more
The rand has bucked the emerging market currency trend by strengthening 7.6% year to date. The Brazilian Real, Indian Ruppee and Turkish Lira have all weakened over 7%. The Turkish Central bank surprised the market with its 3% interest rate hike last week.
We should see an increase in market and currency volatility leading into Friday's US employment data, which is expected to stay near the 1... ››› more
As earnings season winds down, the market is taking cues from geopolitics and the weekly macro-economic data that comes out.
The biggest boost the markets will receive is from America and China, agreeing to put aside international trade differences to work on a wider agreement. This is very positive and will be a tail wind for markets to rally higher. Add this to the bullish phase global marke... ››› more
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