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Simon’s weekly wrap: Corporates defensive, but some are finding their feet

This week MoneywebNOW looked at which banks are best placed to start paying dividends, why Master Drilling shares are cheap; Murray and Roberts’ prospects; income protection and more.
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Three of the large local banks (Standard, Absa and Nedbank) have published half-year results all recording vastly increased debt impairments and no dividends (the latter as per the request from the SA Reserve Bank’s Prudential Authority). Jan Meintjes from Denker Capital helped us understand the difference in their results and importantly, who is better placed to start paying dividends at the next set of results due in March 2021.

Murray and Roberts was having an alright year until the pandemic hit in March and shut down its operations. Ultimately, it reported an overall loss but mostly due to pandemic costs. CEO Henry Laas says most projects are back on track, with only two having been lost due to the pandemic. Murray and Roberts’ South African water and power division again reported a very modest profit, but Laas says it’s keeping the business for as long as it’s not loss-making, due to its great potential for when local water infrastructure spend starts.

During hard lockdown Master Drilling moved into defensive mode and stopped spending on new capex and the result was a surge in cash generation. Keith McLachlan from Alpha Asset Management has held the stock in his small cap fund for years; he gave us insights into why the share trades at such a cheap valuation.

We insure our cars, our possessions, our homes and even our lives. But what about our income? If were unable to earn due to ill health the lack of income could be crippling to our financial security. FMI’s Leza Wells spoke to us about income protection – something that is especially relevant during a pandemic.

Also this week:

Nick Kunze of Sanlam Private Wealth talks Nedbank and Absa results out this week, and ARB CEO Billy Neasham discusses the company’s financial results and the tough two to three years ahead.

Livestream MoneywebNOW weekdays from 6:30am to 6:50am on Moneyweb.co.za or catch the podcast here afterwards.

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