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“Of course the Fed meet today again, the middle of March, the “ides” in which Julius Caesar was murdered by his fellow senators. The politics of 2000 years ago was less civil I suppose, although ….. Janet Yellen and her cronies will deliver their prognosis, the market is expecting a rate hike here.”


 

To market to market to buy a fat pig Stocks were up and down, closing at the weakest point of the day as the closing bell rang. In cyber-land of course, there are no more bells here. As impressive the entrance is at the JSE building, it is also perhaps a let down to those that may have expected a throng of people. In the age of the machine, you can be wherever you need to be, as long as you have a reliable internet connection. That second part is very important. It was pretty much a broad based selling of the market, Bidcorp was down sharply, the biggest loser inside of the majors. Perhaps the weakening Pound Sterling to the US Dollar, the Brexit discussions in the UK parliament are quite some sight, with old stuffy people shouting “hear, hear” and almost disagreeing in unison. It must be part of the parliamentarian 101 course.

Shoprite, Tiger and Amplats were amongst the winners on the day, Discovery shares also hit a 12 month high, as did Capitec and Santam, as well as Advtech. Banking, insurance and education, some things you cannot live without. There wasn’t too much going on in terms of the majors and their news day, Bell equipment had a rather sad looking trading update:

“The expected decrease in results is due to fraud and mismanagement in the Company’s subsidiary in the Democratic Republic of Congo (DRC), as previously communicated to shareholders; to continued depressed conditions in the markets and industries in which the Company operates, and to the strength of the Rand in the second half of 2016.”

 

If your “Africa strategy” is to just stick to being headquartered in Jozi/Durban/Cape town, then I am thinking out loud that you are not alone. The boom and subsequent bust of many an African economy as a result of fluctuating fortunes in mining and commodity prices has taken many by surprise. And unfortunately many were seeing a bright new bold future. We will get there, it will just take a little more time than we thought.

Choppies, the Botswana based and JSE listed supermarkets chain is in the best place to tell you about the future of retail across the region. Along with Shoprite of course, who are the real big daddy here. Botswana, South Africa, Zimbabwe and Zambia, as well as early stages in Kenya and Tanzania, that is where Choppies operates their 200 odd stores. Half year revenues of 4.7 billion Botswana Pula is nearly 6 billion Rand, this is not exactly huge, nor is it small. And it is growing. One to watch. Market cap is 4.33 billion Rand, the stock has been hammered, down 38 percent over the last 12 months, no thanks to the stronger Rand. Mr. Market liked what they saw yesterday, the stock was up over six percent post these results.


 

Over the seas and across the oceans, stocks finished better than at the beginning of the session, they still registered a losing session. The broader market S&P 500 was down one-third by the end of the day, as were the nerds of NASDAQ, with blue chips, the Dow Industrials, down one-fifth by the close. A monster storm has dropped a blanket of snow over the North East of the US, not completely rare for this time of the year, rather late nonetheless. Our guy in New York sent us a picture of an empty subway, on his way to work. There was nobody else there, indicating that many had just stayed away, or were unable to make the commute to work. Extreme weather stopped work is better than the dog ate my homework.

Nike had a good session, the company reports numbers next week on our holiday, the 21st of March. It is outside of the “normal” reporting period, they have a slightly different quarterly reporting cycle. The market went cold for a while on the US sales portion of their business, which is around half of all their sales. The stock has rallied hard this year, up nearly 13 percent after being one of the “dogs of the Dow” last year. We will watch and report back next week on the company. Tesla was another stock that had a ripping session, some of the same old recycled news of the Tesla Model Y sent the stock up nearly five percent. The Model Y will no doubt be a hybrid vehicle, somewhere between the falcon door X model (the SUV) and the not yet in production Model 3.

Of course the Fed meet today again, the middle of March, the “ides” in which Julius Caesar was murdered by his fellow senators. The politics of 2000 years ago was less civil I suppose, although ….. Janet Yellen and her cronies will deliver their prognosis, the market is expecting a rate hike here. And there is no anxiety. Which is weird, that is just the point we are at in the cycle. Stronger growth and labour additions, inflation is just starting to creep in, business confidence is soaring. Time to inch the punchbowl closer and closer to the edge of the table, right?


 

Linkfest, lap it up

It was Pi day yesterday, the month of March followed by the day, 3.14. If you ate a pie, then good for you! My father in law loved: “Pie are squared (Pi.r.2) but cake are round”. The Business Insider had a pretty cool video – A mathematician gave us the easiest explanation of pi and why it’s so important. Math, never gets tiring.

Thanks to economics US power production is getting cleaner. The Fracking revolution has resulted in a huge drop in natural gas prices, lower prices mean that people are now using more of the cleaner energy source – Energy milestone: Nat gas has surpassed once-dominant coal as fuel source for electric power – and it’s here to stay.

I can’t think of the last time I drank a “fizzy drink”, it is a trend that is gaining momentum globally. Instead we pay a huge premium for what is normally just filtered tap water – Soda Loses Its U.S. Crown: Americans Now Drink More Bottled Water


 

Home again, home again, jiggety-jog. Markets in the East of the world, where the sun rises first, are mostly down slightly. All eyes on the Fed tonight, we “know” rates will rise but what will Yellen have to say?


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

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