JSEDirect with Simon Brown

Pick n Pay* Chart Analysis Resistance zone around 26, potential to touch 26.70 Higher highs, higher lows, horizontal resistance Target: 30 bucks to fill the gap Comments on Pick n Pay's potential under Sean Summers No need for a rights issue, potential market spook if it happens Simon's position: Started building, considering more Current status: Down 1.7%, trading at 25.30 Pick n Pay close 13Feb24 (daily) Transaction Capital and WeBuyCars Transaction Capital planning to list WeBuyCars Unbundling process expected in March Valuation: 7.5 billion rand Key information: Founders' put option on Transaction Capital is off the table WeBuyCar's strong performance in January with a record 14,000 cars sold Market Cap of Transaction Capital: R6.5 billion Opportunities and challenges in SA Taxi business Overall assessment: Looking not too bad Current stock level: 850c Expectation of pro rata shares for Transaction Capital holders Timing details expected in the circular Gold Price Movement Gold weaker despite US and UK inflation data Current gold price and chart analysis Simon's position in Anglogold Ashanti* Observations on unexpected weakness in gold price after inflation data Gold daily chart 14Feb24 Canal+ Offer for MultiChoice MultiChoice facing a 105 rand Canal+ offer Market sentiment: Canal+ likely to come back with a better offer Current stock price: 104.63 Speculation on possible offer prices: 120, 135, or even 160 Market confidence in Canal+ making a mandatory offer Global Market Trends and Dollar Strength Dollar strength in global markets DXY trading at 104.87 Money flowing into the US due to fear and concerns Impact on Rand: Trading at 19.07 Market skepticism about inflation concerns DXY (US$ index) 14Feb24 (daily chart) Inflation Analysis Recent US and UK inflation data Market reaction to inflation numbers Central bank concerns about reaching inflation targets Jerome Powell's cautious approach and potential rate cuts Local inflation expectations and potential rate cuts in South Africa The challenge of getting back to the inflation target * I hold ungeared positions.

Disney results: Last week's big story was about tech, starting with Disney, a stock recommended here back in September at ±$80. Key financials: Linear networks revenue up 9%, Direct-to-consumer up 12%, Parks up 16% Direct-to-consumer still incurred a loss of $400 million Consumer products, content sales licensing, and ESPN performance discussed Overall, not a knockout result but not terrible; I remain a satisfied shareholder Big move in streaming sports! ⚾️🏀🏈 Disney, Warner Bros., and Fox are joining forces to create the ultimate sports streaming app, merging ESPN, TNT, and Fox Sports (WSJ). ESPN alone was 18% of Disney's latest quarter revenue.$DIS $FOX $WBD pic.twitter.com/xSPBko0cMO — App Economy Insights (@EconomyApp) February 6, 2024   Meta (formerly Facebook) Earnings: Advertising revenue up 24% year on year to 38.7 billion Other segments discussed, including Reality Labs (MetaQuest) Net profit $14 billion, up 35%; stock surged 20% Mark Zuckerberg's dividend income from the declared 50-cent dividend discussed Positive sentiments about Meta's performance, particularly in comparison to other tech giants Canal+ Offer for MultiChoice: Canal+ made an offer for MultiChoice at 105 Rand per share Market reaction, initial excitement, and stock movement Simon's caution about potential risks and timing of the deal MultiChoice's response: Board concluded the offer significantly undervalues the group Canal+ continued to buy MultiChoice shares, now owning 35.1% Discussion on the mandatory offer threshold and potential scenarios Regulatory considerations: Foreign ownership rules and competition commissions The price of the mandatory offer must be equal to; (i) identical to, or where appropriate, similar to the highest consideration paid by the bidder for those acquisitions and (ii) accompanied by a cash consideration, at not less than the highest cash consideration paid if the shares that carry 5% or more of the voting rights were acquired for cash. Simon's conclusion: Canal+ likely to succeed, potential challenges, and market dynamics Simon Brown

Breaking News: Canal+ Offer for MultiChoice: Canal+, French TV business, offers 105 rand per share for MultiChoice minorities. Synergies between the two businesses. Legal considerations regarding foreign media ownership. MultiChoice closed at 75 rand; market likely to respond positively. Market Updates: Hyprop reports positive festive trading for its tenants. Transaction Capital plans to list WeBuyCars in March; potential value unlock. Evergrande declared bankrupt with over 300 billion dollars in debt. Hong Kong economy expanded 3.2% in 2023. China overtakes Japan as the world's top car exporter. Cristal Challenge Stock Picks: Richemont*: Luxury brand with potential in a recovering economy. [caption id="attachment_41062" align="aligncenter" width="849"] Richemont weekly chart close 31Jan24[/caption] Calgro M3*: Debt under control, potential dividend, well-managed company. [caption id="attachment_41063" align="aligncenter" width="849"] Calgro M3 weekly chart close 31Jan24[/caption] AngloGold Ashanti*: Gold as insurance; geopolitical concerns. [caption id="attachment_41061" align="aligncenter" width="849"] Anglogold Ashanti weekly chart close 31Jan24[/caption] Zeda: New listing, unbundling, potential growth. [caption id="attachment_41065" align="aligncenter" width="849"] Zeda weekly chart close 31Jan24[/caption] Mr. Price*: Positioned well in the retail sector, positive trading update. [caption id="attachment_41064" align="aligncenter" width="849"] Mr Price weekly chart close 31Jan24[/caption] Closing Remarks: Reminder to sign up for email alerts before live sessions. Host: Simon Brown * Simon holds ungeared positions. Host: Simon Brown Date: 1 February 2024

dd Introduction: JSE Direct Episode 571 for January 25, hosted by Simon Brown. Simon introduces the idea of transitioning the podcast to a live format using Riverside, allowing viewers to see charts and interact during recordings. Market Updates: Richemont*: Stock surged 10% on better-than-expected trading update. Identified as an opportunity last year when it pulled back to R2,500. Trading at R2,653 at the time of the recording. AVI: AVI delivered a strong update, but struggling with I&J. AVI focuses on defending margins, willing to lose volumes for profitability. Potential sale or listing of INJ discussed. Woolies*: Mixed trading update. Struggles in Australia, especially with David Jones, while food segment remains strong. Concerns about the performance of the clothing segment. Clicks: Mostly a strong update, struggles in UDP (wholesale drug distribution). Selling price inflation averaged 7.5%, higher than the previous period. Clicks achieved highest-ever daily sales in late December. Economic Updates: December spending records discussed with BankserveAfrica. Expectations for rate announcements from local and European central banks. Hawkish tone expected from local governor; questions about Jerome Powell's stance. Global Market Highlights: All-Time Highs: S&P 500, Nasdaq, Dow Jones hit all-time highs. Russell 2000 still 20% off its highs, considered in bear market territory. India's stock market surpasses Hong Kong, becoming the world's fourth-largest share market. China in trouble, is it over? Should we be worried? Simon reflects on recent data and developments in China. Population decrease and aging population noted. Speculation on a potential $278 billion spending spree to support the market. Concerns about state-directed capitalism and common prosperity policies. Recent crackdowns in gaming, education, and potential implications for healthcare. China's focus on national defense and potential impacts on Taiwan. China's shift towards a more inward-looking and self-focused path. Conclusion: Speculation on the impact of China's changes on global growth, commodity prices, and investments. Simon announces plans to start recording the podcast live, with notifications on social media and newsletters. Acknowledgment of the podcast's longevity (571 episodes) and a request for reviews. Closing: Simon Brown signs off, encourages reviews, and mentions future live recordings. Reminds listeners to take care of themselves and others. * Simon holds ungeared positions.

In this episode of JSE Direct, Simon Brown discusses various market topics, including the bleak outlook of the Hang Seng Index due to Chinese GDP results. Positive news for Grindrod with the Maputo Port Development Company's impressive performance. The rise in uranium prices driven by increasing demand for nuclear power plants, he found two US listed ETFs benefiing from this trend. [caption id="attachment_40966" align="aligncenter" width="849"] Spot uranium price[/caption] The approval of 11 Bitcoin ETFs by the SEC. When does the JSE get a crypto ETF? Do elections matter for markets? Upcoming elections in 2024 across 70 countries. Simon explores the question of whether elections truly matter for investors, emphasising historical examples where market reactions were short-term and highlighting the importance of focusing on long-term investment strategies amid political volatility.

Now for the eleventh year in a row, we kick off the new year with a prediction show. Marc Ashton, Keith McLachlan and Simon Brown put their heads on the block with three wild and woolly predictions for the markets for 2024 followed by a call on the Top40 and ZAR for the year ahead. Importantly we start each show with a review of the previous year’s predictions and you’ll find the 2023 predictions show here.

Position your portfolio for 2024. Top local ETFs for 2023. Simon Shares Transaction Capital (JSE code:TCP) results swung into a massive loss, no surprise. SA Taxi loss making but overall H2 was better then H1 in all three divisions. Purple Group* (JSE code: PPE) results also swung into a loss. But as a discretionary consumer business, why is everybody so surprised? Average client has 1.45 products. This seems low, very low. Philippines not yet regulated, but they not giving up. Project delays. Tigerbrands (JSE code: TBS) show a tough environment and RFG (JSE code: RFG) may offer better value. Local Q3 GDP at -0.2%. Gold at all-time highs. Charts by KoyFin. Get 15% off a two-year subscription * I hold ungeared positions. Simon Brown

Share buybacks and stock compensation, the bad and the ugly Share buybacks are good right? The company uses their free cash to buyback shares which reduces the number of remaining shares such that each share has a higher claim over future profits which adds to their value. Further they're tax efficient in that paying dividends results in dividend tax. BUT; Firstly, in cyclical stocks you need to be buying back at lows, not highs and the companies usually have no free cash at lows, so either they don't buy back or they do so at highs when they have the cash. Horrid value destruction. Secondly, some companies are buying back but also issuing new shares to staff, at times at a rate faster or similar to what they're buying back. This is then effectively an underhand salary to staff. This is especially an issue with large tech stocks, see examples below. Thirdly, new share issues are considered non-cash, but ultimately they are cash as you gave somebody real shares that have future claim on profits. Fourthly, often acquisitiosn are done with stock increasing the outstanding shares. Many will see this as a free deal as shares don't cost. But they do cost as they reduce every other shares value and if the company has been buybacks, well then they paid cash for those shares, just indirectly. Locally we do see buybacks, but share issues are relatively small so the impact is less shares and more value per share. Using IFRS accounting diluted HEPS uses the share count of all outstanding shares PLUS all promised shares not yet delivered. These are basically options that could become shares and gives a way better reflection of the profit, even thugh not yet issued they will potentially come to makret and be issued. Apple (Nasdaq code: AAPL) has been buying back shares and as such over the last decade it's outstanding shares is down about 38%. Apple shares outstanding Meta (Nasdaq code: META) has also been buying back, but they also issue shares at such a pace that over the last decade shares outstanding is basically flat. Meta shares outstanding Charts from Koyfin 15% discount for first 2 years Simon Shares US October CPI was 3.2%, down from 3.7% in September (after peaking at 9.1% in June 2022) and markets absolutely loved the data. Expectations for Fed rates is now no more raising and cuts starting maybe as soon as the 19-20 March or 30 April - 1 May meeting. Shoprite* (JSE code: SHP) trading update shows they still knocking it out of the park and taking market share. Woolies* (JSE code: WHL) trading update had more excuses tha a five-year old caught eating all the picnic ice cream. Decent Stor-Age* (JSE code: SSS) results with ±10% yield and discount to NAV of ±25%. The yield is nice, but you can get the same in cash right now. But when rates start coming down the yield is more impressive and lower rates could see higher valuations. A global luxury ETF Simon Brown