SIKI MGABADELI: Let’s check those markets. It’s a better day than yesterday. The all-share is up almost two-thirds of a percent at 54 305. The Top 40 index is up 0.5%. The rand is at R14.87/dollar, R21.62/pound and R16.88/euro. And all the major indices are in the green, in the black, however you want to call them.
David Shapiro is with Sasfin and joins us now. Hey, I’ll be very happy with a green day over what we saw yesterday, David.
DAVID SHAPIRO: Siki, the market’s in positive mood across the board. Some of the areas are incredible. Retailers – Mr Price up another 4%, Spar 3%, Clicks 2.5%. I don’t know whether they are breaking away from reality because I’m not sure – when you look at the economic numbers and everybody complains about households – that this is a reflection. So I’m not sure where people are getting money to actually support these kind of prices.
SIKI MGABADELI: Woolies was down about 0.33%. It’s not a lot, but it’s still in the red.
DAVID SHAPIRO: It was one of the few. Do you want me to go through the whole list? I’ve got a computer here and I can argue with you. But I think markets are also up globally. I actually listened to Janet Yellen talk yesterday and she was quite upbeat about the economy, a little puzzled about Friday’s job number. Obviously it’s going to set back any chance of an interest-rate rise in June and probably July, and markets have picked up on that. So we’ve got the US markets closing in on their all-time high, only a few points away. If the momentum continues like this we will breach that.
And then Europe had some very good growth numbers which also supported the market. And then oil prices are up and Bloomberg is talking about a bull market in commodities. I’m not sure whether Trevor Goodlace would agree with that. When you look at platinum from its bottom it seems to be going up – and that in itself is attracting a lot of buyers into the market.
So overall a lot more gainers today than losers, not that the miners were all that strong. Gold miners actually supported the market. I see Anglos down. Sasol still off.
SIKI MGABADELI: And it’s interesting – Sasol down about 0.1% but the BEE share scheme down quite sharply, about 11% on the day.
DAVID SHAPIRO: They would be more highly geared to that. But investors are now arguing whether it’s good value at these levels or whether you stay out of it. No one is quite sure how to interpret yesterday’s updates. So there will be a lot of debate about Sasol. But I think generally analysts are kind of neutral on that.
SIKI MGABADELI: The all-share – did we go above 55 000 today?
DAVID SHAPIRO: No, we are still at 54-and-a-half, so we’ve still got a good 1 000 points, about 2 or 3%, to go before we hit the highs.
DAVID SHAPIRO: But one company that did make me a little nervous – Invicta. It’s an industrial company that services the mining industry and also the manufacturing industry and it supplies or distributes equipment to those industries. It’s always a good indicator, and it came out with a trading update that was quite distressing. Profits will be down between 25 and 30%. The share is down about 5%. That’s a more realistic count of what’s happening down at the ground.
SIKI MGABADELI: I suppose that’s what’s being reflected again in the Business Confidence Index that we are are going to be speaking about, because those are the companies really at the coalface of industry.
DAVID SHAPIRO: Nampak was recovering after last week’s slaughtering, when the share fell dramatically. And Telkom was one of the big features today, up 8%. I think there are just hopes that management can actually deliver on the promises. I think there are a lot sceptics out there, those of us who use their services. I think they’ve laid off so many people you can’t get a technician any more.
SIKI MGABADELI: Those who use their services have to worry. Group Five – any movement from them after their trading update?
DAVID SHAPIRO: They were up. Admittedly it’s not a cash profit they are reflecting. It’s a fair-value adjustment, taking into consideration their investment in East Europe. They manage toll roads there and I think because the rand was down so much against the euro they valued it up. But the shares were quite strong. I think up about 2, 3% on the day.
SIKI MGABADELI: And the rand? I think everybody had invested so much worry in what Standard & Poor’s was going to do last week that everybody just breathed a massive sigh of relief.
DAVID SHAPIRO: I think so. I was a bit surprised – I think the rand actually gained more on those job numbers. The last time we heard Janet Yellen speak it was almost inevitable that it was going to be either June or July. That’s gone now, so the dollar has been under pressure. That’s helped the rand quite a lot. Of course that helped gold and precious metals and metals all picked up on that. But I thought to a large extent all of the downgrade or non-downgrade was already in the market. But I suppose there was a slight kicker from it. But I think it’s more dollar weakness than surprise over S&P.
SIKI MGABADELI: You have to come to the studio tomorrow so you don’t have your computer in front of you.
DAVID SHAPIRO: No, don’t challenge me on anything.