Ascending Market Cap

“There was a huge announcement from Ascendis Health, I had to rub my eyes at the size of the two separate deals, so big that it was (and is) bigger than their current market capitalisation. One in Cyprus and another in Poland, two operate businesses in deals worth over 500 million Euros”

To market to market to buy a fat pig If you were in everything else you were fine, if you were holding precious metals yesterday, you were not. That of course was the scene in the city that was founded on gold, the busiest province in the country, which is also named after gold. Place of. Results on the local front continue to pour in, there was an NAV update from Brait, it looks spectacular at face value, of course we were well advised a short while back of the moves, the market had pretty much baked that all into the cake. More on that company in the coming days. Tiger Brands, another Vestact investment, reported results that are increasingly seeing the Nigerian escapade being nothing more than a bad dream. Initially the stock was down heavily, it subsequently recovered through the afternoon and into the close of trade.

By the late afternoon we were catching the wave of a strong global market mix, financials roaring ahead, with Old Mutual rumoured to have found a seller for their US business, that stock was at the top of the majors leaderboard, up over five percent after all was said and done, above 40 Dollars again. See the NYT story – Old Mutual Says Buyers Are Interested in Asset Management Arm. The plans of the split coming to fruition, it is going to be another day of wondering what could have been when the group is a smaller and more nimble beast. The good news is that there are apparently several buyers, which may well mean that the company finds itself in the enviable position of being able to watch a bidding process unfold in front of their eyes.

Not winning and at the other end of the majors column were Amplats and AngloGold Ashanti, there seems to be a shift in sentiment towards the recent commodity run, I did see much earlier that the iron ore price was down around five percent on the day. Again, after a phenomenal run, defying expectations and more importantly the supply and demand dynamics that currently exist. There was a huge announcement from Ascendis Health, I had to rub my eyes at the size of the two separate deals, so big that it was (and is) bigger than their current market capitalisation. One in Cyprus and another in Poland, two operate businesses in deals worth over 500 million Euros, see the BD Live story – Ascendis Health acquires two companies in Europe. You have to hand it to this energetic team.

Over the seas and far away, stocks ramped up sharply, a session that saw good news finally interpreted as good news. Some good US home sales numbers for the month of April made Mr. Market think as a collective that it seems OK for the time being if the Fed does raise rates. In other words, whilst there were some people worried about the facility of the US economy, most recently PMI numbers have not been that great, there is a sense that perhaps a rate hike is warranted. The economy is strong enough. Who would have thought? By the end of the session stocks were up across the board, other than basic materials which ended the day flat. Technology was amongst the biggest gainers, Microsoft up over three percent, Google/Alphabet comfortably up over two percent, the nerds of NASDAQ as a collective up two percent exactly. The Dow jones Industrial Average added nearly one and one-quarter of a percent, whilst the broader market S&P 500 closed up 1.37 percent.

Company Corner

The merger of AB InBev and SABMiller is one step closer, Sabmiller Plc – Anheuser-busch Inbev Receives Clearance In Eu For Proposed Combination With Sabmiller. The approval is based on the condition that SABMiller selling most of their European assets. The more Wester European assets have already been sold to Asahi, the Japanese brewer, they now need to find a buyer for their central and Eastern European businesses, which can seen as bitter-sweet for the company. The purchase of Dreher brewery in Hungary was the start of the company’s push to become a global player. The European assets “only” make up around 18% of SABMillers’ revenues and even less of their profits, so AB Inbev won’t to to sad to see the assets go. The main reason that AB INbev wants the SABMiller assets is for their African assets and South American assets, those markets are expected to grow around 40% over the coming decade.

The merger is still waiting for the US, China and South Africa to approve the deal, on the local front the Competition Commotion has asked for 5 extensions on their decision deadline. The date that AB Inbev management will be looking at is the 12 August, the SABMiller dividend payment date, if the deal can be completed before then the cash set aside for the dividend (around $1.5 billion) gets to go AB Inbev instead of SABMiller shareholders. The deal is not expected to be closed before then according to SABMiller.

Linkfest, lap it up

Given that the US is the globes largest economy and that the economy is driven by the consumer, the state of the consumer and their pay cheques have global ramifications – Everywhere you look there is good news for Americans’ paychecks. As the country nears full employment, labour becomes more valuable which is coming through in the rise of wages – Good news is coming for America’s low-wage workers.

Another look at how bad things have got in Venezuela, a terrible situation for the man on the street – Venezuela is on the brink of a ‘political and economic meltdown’. This will no doubt affect Aspens operations there.

Computers may be able to beat humans in the game Go where some form of intuition is required but when it come to the creative side of things humans still have the upper hand – This is what a movie written by an AI looks like. The movie is really bad to the degree that it starts to be comical.

Here is one proposed solution to traffic congestion and air pollution. The new transport bus would take the place of around 40 busses, cutting down emissions and also run on electricity – Can China’s Futuristic ‘Straddling Bus’ Finally Become a Reality?

Home again, home again, jiggety-jog. Our market should open in the green this morning following the wave of green from around the globe. Tencent in Hong Kong is up over 2%, Naspers should be over the R2200 mark again today with it’s all-time high of R2270 with in range. We are also getting numbers from Mediclinic International today, the first look at the combined entity.

Sent to you by Sasha, Byron and Michael on behalf of team Vestact.

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