Worldwide Markets โ Episode 656 (12 November)
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1) JSE Under Pressure ๐๏ธโ๏ธ
Two issues in the spotlight:
a) Competition Commission Complaint
A2X alleges JSE is being anti-competitive around BDA & settlement. This could have a long regulatory process. No quick outcomes expected.
b) Matengu Allegations
Matengu alleges share price manipulation and claims to have emails implicating JSE directors.
- JSE has fired back and asked: Produce the emails.
- There is also a clear seller overhang (ex-director wanting out), which explains the price pressure more plausibly.
Takeaway: Overhang selling often looks like manipulation. But without proof, it’s just selling pressure.
2) Should We Scrap SENS Announcements & HEPS? ๐ค๐ฐ
The JSE is consulting on two potential changes:
- Reduce some SENS announcements (e.g., administrative ETF notices, floating rate resets, etc.)
- Possibly remove HEPS (Headline Earnings Per Share)
Simonโs view:
๐ซ Do not remove HEPS.
HEPS is invaluable as an adjusted earnings measure, especially in SA where one-off corporate events are common. The process cost argument doesnโt justify removing a critical metric.
4) Donโt Fight the Trend ๐ข๐
Two strong trends right now:
a) Gold ๐ฅ
- Back above $4,100/oz after two brief red weeks.
- Long-term trend still strongly up.
- No point trying to call tops โ enjoy the trend while it runs.
b) Rand ๐ฟ๐ฆ๐ช
- Strengthening since the โliberation blowoutโ in April (~19.90).
- Now around R17.14 โ and trend still down (strengthening).
- This is not just USD weakness.
- Big inflows into SA bonds + stronger commodity prices supporting.
Next key level: R17 โ If broken, expect move to low R15s.
5) Results Round-Up ๐๐ผ
| Company | Sector | Key Takeaways | Outlook |
|---|---|---|---|
| Stor-Age* | REIT / Self-storage | SA strong, UK okay. Trading near NAV (R17.77). Yield ~7%. | Fairly valued, solid operator. |
| Premier Group | Bread, food manufacturing | Revenue +6%, HEPS +27%. Efficiency gains + declining input costs. | Not cheap, but high quality compounder. |
| GE Aerospace (formerly General Electric) | Aviation Engines & Service | 75% of commercial planes use GE turbines. Service business = high margin recurring revenue. | Trend beneficiary as global travel grows. Expensive, but maybe deserved. |
6) KAP (PG Bison, UniTrans, beds, auto aftermarket) ๐๏ธ๐๐ ๏ธ
- Earnings slump โ PE looked blown out, but forward expectations show return to single-digit PE once capex is absorbed.
- Small-caps remain deeply unloved.
- Worth watching, but needs a catalyst.
7) Gold Miners โ Pick Your Favourite โ๏ธโจ
If gold keeps running, most producers will make serious money.
Simonโs preferences:
- AngloGold Ashanti* (ANG) โ strong price action, holding trends well.
- Pan African (PAN) โ up 7x since Oct 2022.
Others:
- Harmony โ now has meaningful copper exposure.
- Sibanye* โ gold + PGMs.
ETF option: Satrix RESI* โ doubled this year (helped heavily by gold).
โณ How long to hold?
While gold trend remains intact.
Events & Dates ๐๏ธ
- Monday 17 November @ 10:00 โ 91 Income ETFs webcast
Book: justonelap.com/events - Friday 8 December โ Final Power Hour:
โPosition Your Portfolio for 2026โ
Bookings open next week.
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JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.
Wednesdays are all about hard-core investing and trading with Simon Brownโs famous JSE Direct podcast. JSE Direct started life on ClassicFM in July 2008 and became a podcast in 2011. Every week Simon shares his views on the state of global economies, individual shares and events moving markets.
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JSE โ The JSE is a registered trademark of the JSE Limited.
JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.
