Simon’s weekly wrap: what moves the rand, BAT shares and more

Also, views on the US/China trade war and its risks for SA, hammered UK property stocks, views on Exxaro, Clicks, Airbnb’s IPO and other stories.
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Has China overstepped the mark in global geo-politics with the US, India and Japan all pushing back against Beijing? Will China respond to mounting pressure by banning Apple? These are the questions I asked Viv Govender from Rand Swiss when we spoke about the US/China trade war. The world’s two largest economies have not seen eye-to-eye for a number of years and the risks are aplenty – especially for our market, as Prosus and Naspers hold a significant stake in Chinese Tencent.

Locally-listed UK property stocks Capital & Counties’ (CapCo) and Hammerson have seen serious price pressure over the last few years and especially as of late. The former on results, while Hammerson announced a massive rights issue. I spoke to Garreth Elston of Reitway Global asking if there’s value in either stock, and his view was that the risks still outweigh the rewards.

The British American Tobacco share price has been under pressure for ages and just can’t get moving higher, even as results show increasing profits. FNB’s Wayne McCurrie is not so worried about the share price, as he views it as a classic defensive stock with a solid and attractive dividend yield paid in sterling. We also touched on the string balance sheets of diversified miners – perhaps the strongest they have ever been.

The rand is one of the more volatile currencies in the world and as South Africans we tend to take it personally every time it weakens. But Varushka Singh of RMB explains that a lot of what is driving the short-term moves in our currency has nothing to do with us. Rather it’s been driven by the US dollar moves against other major currencies, such as the euro, and we’re even influenced by events in Turkey that hit its currency (the lira).

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