We kicked off this short week with an interview with Mohammed Nalla looking at the history of structural inflation and the possible threats from inflation in the current environment. Mohammed also made the point that technology advances in the last few decades has ensured a structurally lower inflation meaning that even if it starts to edge higher, we’re unlikely to see sustained high inflation any time soon.
Gary Booysen was our Thursday market guest and I asked him what’s worrying him. Everybody seems bullish and that’s always a concern as there must be some risk somewhere. His key concern? Fear of missing out (FOMO) driving people into stocks and sectors that normally they would either avoid or perhaps have a lighter weighting in. In other words, stick to your strategy.
Schalk Louw has been unpacking Sarb data that shows the current commodity price boom is seeing an extra R10 billion buying per month. Add to this agri prices also booming and suddenly rand strength makes a lot of sense, but how much stronger can it go? Well in the early part of this century the rand strengthened from nearly R14/US$ in 2001 to under R6/US$ by 2005 as commodity prices boomed. As Schalk says “it’s feeling a bit like 2004-2006 again”.
We have a number of holding companies trading well below their net asset values (NAV). I speak with Keith McLachlan of Integral Asset Management on Sabvest specifically but also look at the other discounts asking him what he feels is driving those discounts.
Also this week:
A look at Revego Africa Energy ahead of its listing. CEO Reyburn Hendricks explains that the fund plans to ‘invest in a portfolio of predominantly operational renewable energy assets in sub-Saharan Africa’.