🌍 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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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 Brown’s 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 – 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.
