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Sun International continues expansion into Peru

Financial and industrial sectors driving the market up – Maudi Lentsoane on Wednesday’s market moves.

NASTASSIA ARENDSE:  Good evening and welcome to the SAfm Market Update with Moneyweb. My name is Nastassia Arendse.

Maudi Lentsoane, who is the CEO of Lehumo Investments, joins us on the line. Maudi, how are you?

MAUDI LENTSOANE:  Good evening, Nastassia, and good evening to your listeners. I’m doing very well, thank you.

NASTASSIA ARENDSE:  How did we do on the markets today?

MAUDI LENTSOANE:  Another positive day, up 0.2%, similar to yesterday, where the financials and the industrial sector were what’s driving this market up. However, pressure continues in the resources sector today – I think even worse than yesterday. Today we finished on the resources sector down 1.87%, almost 2% lower.

The industrials were up almost 0.8%, financials also up 0.75%. So you’ve got pressure coming from the gold mining index, which is down 2.6%, and you’ve got platinum also pretty much flat, 0.1% down. When I look across the board I’m looking at the likes of AngloGold Ashanti coming under pressure, down 2.6%. Also diversified miners came under pressure. South32 down 1.8%, BHP Billiton also down 1.6%.

In Australia we are seeing pressure continuing. Those commodity prices are coming off. Certainly pressure across those resources counters. Anglo Platinum as well down about 0.9%.

An interesting one that I looked at was Stadio, which is now down almost 25%.

NASTASSIA ARENDSE:  Why, though? Is that normal when you unbundle?

MAUDI LENTSOANE:  What goes up must come down at some point. If you look at the performance, it went up quite aggressively after the listing and I guess it was a little too much within a short period of time. I think some people feel that perhaps it was unjustified to have run so hard. Today it’s down 25%.

But there were some greens. PPC up just over 5%. You’ve got Sun International as well. They came up with a trading update. And I see they are continuing to buy more. I thought when they were exiting Panama they would pause a little before they went into another acquisition. But I see they are already busy again. They’ve announced that they are going into Peru, and they’ve acquired a casino and resorts company through their subsidiary, Sun Dreams SA. So they are busy there, continuing to acquire some stakes. Hopefully they get it right because one of the reasons they are exiting Panama and Colombia is because those operations just haven’t performed very well for them. So it looks like they are more optimistic about continuing the expansion in in Peru.

But other companies – PSG coming through. I see it finished up. It came with its unaudited results for the six months, very positive results. The sum of the parts, which is the way they measure this company, is around R262.32. So slightly above where it’s trading at I think around R256.

The other one was Mondi of course.

NASTASSIA ARENDSE:  Maudi, unfortunately we are running out of time, and I do want to get into that discussion with PSG, who are waiting on the line. Thank you so much for your time.

MAUDI LENTSOANE:  You are more than welcome.



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