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Simon’s weekly wrap: Rebooting the JSE, economy and your yield

This week we looked at new JSE-listed ETNs that track hot US stocks, SA’s zinc potential, how to try to improve yield without increasing risk, reviving JSE listings, why this tech rally is different, and more.
Simon Brown Image: Supplied

Globally, stock exchanges have seen the number of listings decrease markedly since the turn of the century and the JSE is no exception. Alpha Wealth’s Keith McLachlan has a number of ideas about reviving listings and trading activity on the JSE and I spoke to him about some of them ­– such as a central research pool for small caps and Joburg Depositary Receipts (JDRs). JDRs would be like the US version of American Depositary Receipts (ADRs), listing stocks such as Apple on the JSE.

Keith’s idea of JDRs was however already implemented in a sense by FNB, as it listed 20 exchange traded notes (ETNs) on the JSE last week. Each ETN holds different US-listed stocks, such as the high-flying stocks Apple, Amazon, Netflix and Tesla. There are ten different US stocks covered each with a currency neutral option (share code ends with a Q) or one that includes the impact of the currency (share code ends in a C). Being locally listed they are not part of an offshore allowance and are fractional in that they were all priced at 1 000c on listing. So this offers easy exposure to great US stocks via a JSE account. I spoke to FNB’s Bheki Mkhize on these ETNs.

When we think of the mineral wealth in South Africa it’s always about the flashy minerals: gold, diamonds and platinum group metals. But we have a lot more below the surface. For example, it turns out we have the world’s fifth largest Zinc deposit. I spoke to Simon Norton of the International Zinc Association on harnessing SA’s zinc resources to reboot the economy, with JSE-listed Orion Minerals building a new zinc mine in South Africa.

The low interest rate environment is great for those with debt, but for investors looking for yield or cash flow it is a nightmare. This unfortunately means many investors will find themselves in higher-risk funds in the hunt for yield. I spoke to Samantha Steyn, CIO at Cannon Assets Management, on what to look out for and how to try to improve yield without increasing risk.

Also this week:

Petri Redelinghuys of Herenya Capital took us through the key charts for the (now past) week. York Timber CEO Pieter van Zyl talks results. Victor Mupunga from Old Mutual on why this tech rally is different to the 1999 bubble.


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