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Massive buying in JSE shares

Grindrod looks to split up the company, list shipping separately – David Shapiro on Tuesday’s busy market

NASTASSIA ARENDSE:  Good evening and welcome to the SAfm Market Update with Moneyweb with me, Nastassia Arendse.

Joining me on the line to tell us how the markets performed is David Shapiro from Sasfin. David, how did the markets do?

DAVID SHAPIRO:  A little bit better. There weren’t any outstanding features in the heavyweights, and I think all the gains were shared among all the major centres. The rand came under a bit of pressure, and that had nothing to do with President Cyril Ramaphosa’s new cabinet, but rather with the dollar gaining strength. As I’m talking to you now, Jerome Powell, the new Fed governor, is actually addressing Congress, answering questions. I think the market has been quite encouraged by what he has to say.

So, just looking at US stocks, they seem to be holding pretty steady. But apart from that there wasn’t big news. We had a couple of results, nothing really worth mentioning. I’ll cover one or two of them in a sec.

But looking at the mining board – Sasol up 1.25%, I think on the higher oil price. Also I think responding to yesterday’s numbers.

Anglo is still drawing investors in after its numbers and turnaround there. That was up 1.5%. Assore gave a last-minute run. It was negative for most of the day and just picked up in the last minute. It was up 2.5%. But I see Kumba and Exxaro down.

Gold and platinum shares are off with Sibanye losing about 3%.

Then just looking at industrials, again, mixed reactions at the top end of the market. British American Tobacco, Naspers, Richemont, Bidvest and Bidcorp all traded down again. But then we had MTN, Vodacom, Aspen, Mondi up with Aspen the feature, up 2.25%.

Then, just looking at Pioneer Foods, I’m not sure what happened there. Cash was up about 6%. That was followed by Grindrod, which was up 5.5%. Grindrod is splitting off the company. It’s hoping to list its shipping division separately; it’s also going to then restructure the freight side of the business and its banking side. So I think the market is beginning to respond to what the split up will look like, although if you go through the results, those are very, very difficult to understand because they show the difference between continued and discontinued operations.

Just one thing we are seeing is that local companies are now starting to attract a lot of attention. It seems that big money is coming into those. We saw it in retailers. Massmart is up 3%. Also yesterday on Shoprite’s results some big gains there.

Just looking at construction, WBHO came out with their half-year profit. Going through the results, a good turnaround. But all the profit is coming from Botswana, or the rest of Africa, then Australia. Nothing happening in the local market. A big worry that they mention that the South African operations have fallen because of a subsiding building markets here.

And on the financial market, the mystery – I can’t see a reason – but the JSE itself was at another new high today, up 3%. I’m not sure who is buying it but from November we’ve just seem massive, massive buying of the shares. Nicky [Newton-King] has to tell us or she’s got to start looking in the registers, because I don’t know whether someone is coming to buy her out or something, but lots of action there.

And PSG, Capitec down, Standard Bank up.

That’s was about it.

NASTASSIA ARENDSE:  We didn’t get to speak yesterday because we had Bright Khumalo from Vestact, but you would definitely be following is Warren Buffet’s 2017 newsletter. I read through it. What did you think of it? I liked the part where he was talking about Wall Street’s obsession with wanting to acquire companies, etc, and I thought if only some SA CEOs had got this memo about this acquisition frenzy that they were all on.

DAVID SHAPIRO:  He’s always been around that and he identified what he would look for in a company, which includes management. But he’s always said you must buy at the right price, and also look for companies where they generate internal growth.

NASTASSIA ARENDSE:  Thanks, David, for your time.

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