Today’s markets. ‘On the year we are still up 20% in a very, very tough environment.’

HILTON TARRANT: David Shapiro is with Sasfin. The market down 1.4% today. I suppose we should get used to this.

DAVID SHAPIRO: Ja. I think we've retreated 4.5% since we hit that recent peak, I think about 10 days ago - I remember, the 23rd October. We've come back 4.5%. But Hilton, on the year we are still up 20% in a very, very tough environment. So you are bound to have some sell-off. Still jitters there. A lot of news that took markets down today, particularly the banking news in the UK.

HILTON TARRANT: Our banking sector really struggling today, some of our shares as low as 2%.

DAVID SHAPIRO: I think what happened - we had bad results from UBS, also the Royal Bank of Scotland, Lloyds raising money in the UK. They are heavily owned by the taxpayer...

HILTON TARRANT: Royal Bank of Scotland is almost a nationalised bank...

DAVID SHAPIRO: I think that's about 80%, Lloyds about 40%. But I think the worry is that we haven't seen the worst in the banks. There are still going to be write-offs. So I think it created just a few jitters. We thought we were over it, and I think that triggered the sell-off and its spread to other sectors of the market.

HILTON TARRANT: The big bombshell - Wesizwe's board sacking the CEO and chairman, Mike Solomon and RG Rainey being asked to step down as directors with immediate effect. Those two directors are challenging their dismissal. Market talk has it, though, that the two directors were paid round about R14m in unauthorised bonuses, the board discovering this and sacking them. It's going to be an interesting fight.

DAVID SHAPIRO: Ja. I don't think we can add to that if it's market talk, because the announcement didn't say anything - the announcement merely said that they were asked to step down. Mike's a big friend of ours. He's appeared on the show many, many times. But it is an unusual movement. Look, the juniors have been hit and I think a lot of those operations must be under considerable pressure. I know that Wesizwe's got quite a bit of cash now, and it's been holding back, waiting for developments. So I am not sure what the backdrop is.

HILTON TARRANT: Other company news - Illovo out with a trading statement, headline earnings per share up between 25 and 30%. The market not liking it, the share down 6.5%.

DAVID SHAPIRO: Ja. I can't make head or tail of it. At the moment we are seeing quite a bit of selling coming through, and a lot of it I would attribute to foreigners taking profits, particularly with the rand having weakened a bit. That takes a bit of profit away. It also triggers a momentum or a snowball effect on the market. So it may have been that. Looking at Illovo throughout the day, it was a steady decline. It appeared that there was a large order, somebody wanted to get out; it wasn't a quick, sharp movement. So the ironic thing is that Tongaat was at the other end. Tongaat was one of a handful of gainers on the market today.
HILTON TARRANT: Cashbuild out with a first-quarter update. The company really discloses information well, hey. They update us every quarter. Revenue up 10%, and I suppose with no price inflation - they mention that there's no price inflation in their goods - a good set of numbers.

DAVID SHAPIRO: I think in these circumstances very good. A very solid operation, continuing to expand. Botswana still a problem. They are still having problems there. It's the only area where revenue seems to be down, but otherwise a good operation. I still think it's one that you have to look closely at in terms of positive outlook. I think a very well-run operation and one where they just seem to be selling the right goods.

HILTON TARRANT: And the other one, Imperial, Hubert Brody at the AGM suggesting that their South African business, while the performance has been a bit lacklustre over the past couple of months, has finally hit bottom.

DAVID SHAPIRO: Ja, I think he's done a great job. You know, when he first came on there was a lot of scepticism, questions being asked, but he slowly got rid of it. He's improving the cash flow, getting rid of those cash-consuming companies. And he's in a better position now, he's certainly in a  very good position to take advantage of the turnaround, if it comes, or when it comes, at what time, whatever.

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