The Confidential Report - September 2025
3 September 2025 By PDSNETAmerica
Looking at the American economy at the end of August 2025, we see that it is certainly slowing down. Core inflation at 3% remains stubbornly above the Fed’s target of 2% and the shock adjustment to jobs numbers shows that job creation is much lower than expected. Core inflation is affected by housing where inflation remains high at 3,7% for the year or 0,2% month over month. The gains in retail sales have been eaten up by inflation so the inflation adjusted sales are more-or-less where they were 4 years ago in 2021. Ignoring the COVID-19 year of 2020, real consumer spending is the lowest it's been since 2008. So, in our opinion, the Fed’s slowness in reducing interest rates is definitely having an effect.
Almost all S&P500 companies have now reported on their performance in the second quarter – and the results have been way ahead of analysts’ estimates. Analysts predicted a modest 5,8% growth in earnings, but the actual figure has come in at almost 13%. This strong growth was topped off by Nvidia’s results which showed that revenue was above estimates and the company generated 105c (US) of earnings per share in the quarter. The effect of this was boosted by a $60bn share buy-back. In our opinion, the Nvidia results justify its high rating and the ratings of other AI companies on Wall Street.
The S&P500 index has reflected these strong results, compounded by the now widely held expectation that the Fed will reduce interest rates at its meeting in September. Consider the chart:
The chart shows that the S&P has totally recovered from the impact of Trump’s erratic tariff policies that resulted in a V-bottom. It has then gone on to make a series of new record highs reflecting the continued belief that AI is just at the start of its impact on corporate productivity and profits. Our view is that the S&P is probably over-bought in the short term and could experience a correction from current levels. Despite this we still firmly believe that the great bull trend, which began in March 2009, remains in place and that shares will continue to go higher. The JSE and other world markets will continue to follow Wall Street up.
The US dollar has fallen about 12% against a basket of major currencies this year so far. Much of this can be attributed to Trump’s new tariff regime and it calls into question the dollar’s dominance in world markets. Large international investors are beginning to question whether the US can continue in its role as the world’s banker. The Man Group which manages $192bn sees the current upsurge on Wall Street as an opportunity to “rebalance, take some profits and go neutral on the US.” The dollar has suffered its worst first half performance since 1973. The rising US deficit may cause yields to go substantially higher especially on long-dated treasuries. The markets are being sustained by continued investor optimism over new technologies and tech companies like Nvidia and for the moment at least tech is a more important factor.
The US national debt now stands at $37,2 trillion and costs the government approximately $1 trillion a year in interest. Of that debt approximately $9,13 trillion is held by foreigners with the largest being Japan holding $1,15 trillion followed by the UK with $858bn and the China with $756bn. The national debt is about 121% of gross domestic product (GDP). In any other country, this level of debt would be considered dangerous, but the US dollar is the world’s international currency with more than 60% of all world trade conducted in US dollars. This cushions the country to some extent against the impact of having such a high national debt. Despite this, the size of the national debt is a major concern and could easily result in economic problems in the future. Another major factor is Trump’s aggressive stance towards the Federal Reserve Bank and especially its governor, Jerome Powell. Trump’s statement that he would fire deputy governor of the Federal Reserve Bank, Lisa Cook shows that he is still intent on replacing the current members board with his own appointments. His reasons, given on Twitter (X) look unconvincing. Cook is the only black woman on the committee, and she was put there by Biden a few years ago. Cook has appointed a top counsel to fight the case saying that Trump has absolutely no basis for his attack on her. Trump is unhappy with the Fed because of its refusal to cut interest rates more aggressively – partly because of his tariff policies. If Trump gets control over the Fed’s board, it is speculated that it could lead to further quantitative easing (Q/E).
Obviously, Trumps attack on the Fed has a negative impact on international perceptions of the US dollar as a safe haven currency and brings into question its role as the preferred trading currency of the world, about 60% of world trade is still done in dollars and US Treasury Bills are still regarded as very secure asset to hold when investment sentiment is “risk-off”. One point is clear, the weakness in the US dollar almost exactly corresponds to Trump’s second term as President and we see it continuing until his influence over the US economy comes to an end.
Trump is crowing about his deal for the US government to acquire 10% of the US chip maker Intel. On the face of it this looks like a good deal for America, but it can also be seen as a move towards nationalising key US industries. Intel has been struggling with stiff competition from Samsung and TSMC and the Biden administration had already supported it with the Chips and Science Act in terms of which it received $7,9bn in funding in 2024. Earlier this month Trump demanded that Intel’s CEO, Lip-Bu Tan, resign because of his links to China. Tan now says that Intel is “...deeply committed to ensuring the world's most advanced technologies are American made.” Some analysts are suggesting that the Trump administration is executing a slow take-over of the American government. In general, governments should not own businesses because they are not usually as efficient as private enterprise. In the past US has been staunchly capitalist and adhered to the Thomas Jefferson’s principle that “The least government is the best government.” However, the deal does not give the US government a board seat or any direct control over the company and the company’s shares have gone up since the deal was announced.
Ukraine
The meeting between Putin and Trump in Alaska was, as the German Chancellor put it, a victory for Putin where Trump got nothing. While the meeting was in progress both Russia and Ukraine continued attacking each other with missiles and drones and the fighting on the front line continued. Putin, who has been shunned by Western leaders for years got to meet the US President and did not give up anything in the process. Trump is now saying that a cease fire is not necessary for peace talks to begin and this flies in the face of Ukraine’s requirements and those of the EU. In our view, the war is likely now to drag on until such time as one of the sides can no longer sustain it. The Russian economy is in deep trouble with the Ruble falling to just 0,80 of a US cent at a time when the US dollar is the weakest that is has been for years against international currencies. It seems that a significant escalation like the commitment of NATO troops in the war will be necessary before a cease fire can be agreed. Putin probably knows that his future as leader of Russia would come to an end if the war in Ukraine ends without Russia making significant territorial gains. Despite this, we see Putin’s position as essentially unsustainable and we expect some sort of resolution in the relatively near future.
The latest meeting in Washington between Trump and President Zelensky was heavily supported by half a dozen European leaders who are members of the Coalition of the Willing. Zelensky said that the meeting was a “major step forward”, but Russia has continued to bomb Ukrainian cities with missiles and drones. A number of EU countries have indicated their willingness to commit troops to the war in support of Ukraine and this is likely to be the next major escalation. Putin is still trying to get Trump to force Ukraine to concede territory in the Donetsk area, but Ukraine is unlikely to agree to that. Our perception is that there is definitely a movement towards arriving at a ceasefire, but that neither side is yet willing to commit to it in the short term. The dire situation in the Russian economy is forcing Putin to begin trying to find a politically workable way out of the Ukrainian conflict.
Ukraine’s new long-range drones are taking a serious toll on Russia’s fuel refineries. Since the beginning of August 2025 Ukraine has struck 8 major oil refineries and shut down 5 of them. This has eliminated close to 20% of Russia’s refining capacity, pushing up fuel prices and causing a major pollution problem. Fixing these refineries is a big job and Ukraine will simply continue bombing them. Since the beginning of the year fuel prices have risen by 32%. Rising fuel prices will inevitably feed through to food inflation and the general level of inflation making it worse than it already is. Russian petrol stations are not getting re-supplied and where there is petrol, kilometre-long queues have developed. Russia is now being forced to import gasoline to meet local demand which is absurd for a major oil-producing country. Because of Western sanctions, the Russians are being forced to rely on Chinese parts to re-build the destroyed refineries which often forces them to completely rebuild the facility. Clearly, this is becoming a major problem for the Russian economy and consumers. Russia currently spends about 40% of their gross domestic product (GDP) on their Ukrainian war effort which is now causing many aspects of their civilian economy to collapse. Ukraine’s new Flamingo missiles, which carry a 1-ton explosive payload and have a range of up to 3000km, are expected to cause even more chaos.
Political
The South African Communist Party’s (SACP) decision to contest next year’s municipal elections independently rather than stand with the ANC is a further blow to the ANC that has been bleeding support steadily ever since it came into power. The SACP was one of the members of the Tripartite Alliance and has been aligned with the ANC for many years. It says it can no longer tolerate the ANC’s alliance with the DA in the Government of National Unity (GNU). ANC support is thus likely to be fall even further at next year’s election – probably as low as 30% or less. This will further shift and fracture the political landscape in South Africa. In our view, the time is rapidly coming when the ANC will no longer be the largest party in the GNU – and that will have significant consequences for the way in which the country is run. Next year’s municipal elections are likely to see the DA take over some of the key metros.
The Government of National Unity (GNU) has survived for one year now – which, in our view, is no small achievement. It has made some progress on reforms in certain areas but has probably not lived up to the expectations that it came into office with. Investment into South Africa continues to be minimal with only a 1% increase expected in 2025. Despite this there have been some areas on improvement especially in DA-controlled areas like Home Affairs. The disagreements over the budget have now been resolved and lessons learned in the process. The mere fact that the GNU survived the budget is, in itself, an achievement which has been recognised by overseas observers and investors. Perhaps the best indication of this is the relative strength of the rand against the US dollar over the past year – despite the imposition of US tariffs against this country.
Transport Minister, Barbara Creecy, says that improving the performance of Transnet will take longer than the transformation at Eskom which resulted in the end of loadshedding. The reforms are based on improving efficiency and getting the private sector involved directly in the management of various facilities. Creecy says that South Africa is trying to implement “what the rest of the world did 20 years ago.” The Treasury approved an additional R95bn in guarantees for Transnet which brings the total amount guaranteed up to R146bn. This should provide sufficient funds for Transnet to meet its debt repayments for the next five years. In the past, the volumes of goods being transported by rail has dropped sharply because of an insufficient investment in infrastructure and a shortage of rolling stock as well as continuous vandalism and theft. Out of the 25 applicants from the private sector 11 have been selected to operate 41 routes in Transnet’s 6 corridors for the next decade. Beginning in 2026/7, these private sector operators should increase goods transported by 20m tons per annum. The operating companies will also be able to invest in rolling stock through leasing companies which is expected bring in an estimated R100bn of additional investment. At the moment the amount of goods being transported is about 90m tonnes – well short of the target of 250m tonnes per annum. Obviously, if Transnet’s efficiency can be improved there will be a major ripple effect through the economy. Rail transport generally costs about one quarter of road transport.
The National Health Insurance (NHI) Act was brought to Parliament in August 2019 and approved by the National Assembly in June 2023. In a desperate last-minute attempt to improve the ANC’s election performance, it was then signed into law by the President immediately before the general election last year. However, it has faced considerable opposition on the grounds that it is unaffordable and impractical. Now the Board of Health Funders (BHF) has become one of several organisations to launch an application in the Constitutional Court to have the Act declared unlawful and invalid on the grounds that insufficient public consultation was undertaken by Parliament. The BFH is claiming that the ANC used its parliamentary majority before the last elections to push the legislation through. Critical issues like how the Bill would be funded were not resolved and the role of medical schemes and provincial health departments was not clarified, making the legislation irrational. Obviously, the NHI is also a major sticking point between the ANC and the DA – which means that the ANC will not be able to get it passed without bipartisan support now that it has lost its majority in parliament.
Economy
The economy is expected to grow by a tepid 0,1% in the second quarter and by 0,9% in the whole of 2025. This is obviously well below the Government of National Unity’s (GNU) goal of 3% growth and is mainly due to the absence of meaningful growth in infrastructure and productive assets. Gross fixed capital formation (GFCF) is expected to shrink by 1,5% in 2025 and to grow by only 2,2% per annum for the next three years. Some growth is filtering through from the low inflation rate which has allowed salary earners to get a real increase in their income over the last two years, but mining and manufacturing have been depressed. Agriculture is a wild card, but may slow down in the second quarter from the first quarter’s 15,8% growth. Overall, economic growth is still muddling along and is unable to absorb the flood of school-leavers looking for work each year.
The consumer price index (CPI) increased by 3,5% in July month mainly because of a sharp rise in food prices. Meat prices increased by 10,5% and vegetables were up 14,6%. Food prices have been driven by the rand’s relative stability against the US dollar and price movements on international markets. April, May, June and July have now all seen substantial increases in food prices, but food prices are expected to begin coming down in the coming months. Outbreaks of avian flu in Brazil and foot-and-mouth disease in South Africa temporarily pushed the price of meat up. Vegetable prices were negatively impacted by excessive rains in the last few months. Core inflation which excludes food and fuel prices was 3% and the CPI increased by 0,9% month-on-month due to increases in municipal tariff increases and water increases.
Reserve Bank governor, Lesetja Kganyago, is continuing his on-going battle with inflation in South Africa by reducing the Bank’s target to 3% from its current official target range of between 3% and 6%. Kganyago says that the lower inflation target will reduce the risks of investing in South Africa by reducing interest rates and improving investor confidence. It will also have a benefit of reducing the government’s interest bill on its massive debt. The Minister of Finance, Enoch Godongwana has so far not supported Kganyago’s move to a 3% target. Obviously for inflation to come down it is important for fiscal policy and monetary policy to be aligned. A 1% drop in interest rates would save the government about R50bn a year in interest.
The official unemployment rate increased in the 2nd quarter of 2025 to 33,2%. The high unemployment figure supposedly includes those employed in the informal sector, but some business people, like the CEO of Capitec, have challenged this number and suggested that the true unemployment rate is closer to 10%. One of the aggravating factors is Trump’s blanket 30% tariff on SA goods exported to America. This move alone is anticipated to cost South Africa between 30 000 and 100 000 jobs. Growth in the economy is expected to be 0,9% in 2025 indicating that the government of national unity (GNU) has yet to have a significant impact on unemployment.
The BankServ BETI index climbed 0,2 in July to 139,3 showing that the total value and number of electronic transactions in South Africa is still going up. The index has risen by 1,9% over the past year showing that economic activity is still increasing. Obviously there is still considerable uncertainty over the impact of US tariffs, but businesses are adjusting to the new threat and searching for alternative markets. The low level of inflation, which is expected to be 3,5% this year, is a major benefit because it is resulting in a steady increase in real income levels.
Factory output rose by 1,9% in the year to the end of June 2025 indicating a turnaround. However it is not certain that this improvement will be sustained given Trump’s 30% blanket tariffs on South African exports to America. In the three months to the 30th of June 2025 growth was strongest in the chemical, petroleum, rubber and plastics section where it reached 4,3%. Motor vehicles, parts and accessories increased by 9,8% while food and beverages grew by 6%. In the second quarter of 2025 sales were up 1,2% above the first quarter.
The DebtBusters Debt index for the second quarter of 2025 shows that 95% of consumers applying for counselling had at least one personal loan and 54% were using high-interest (23%) pay-day loans to get through the month. Consumers are struggling with increased municipal rates for electricity and water. Electricity has gone up 265% since 2016 and fuel is up 75%. Among those seeking counselling the average debt-to- annual income is 112%. Consumers earning R35000 a month or more who get counselling are spending an average of 78% of their income on debt servicing. Consumers have, however, benefited from lower interest rates and the 2-pot retirement system which released capital into the economy.
The 3-year deal signed by the National Union of Metalworkers of South Africa (NUMSA) for increases of 6%, 5% and 5% is clearly above inflation which is at 3% and will result in a real increase in the take-home pay of workers. This deal is typical of deals being made across the economy where, because of the low level of inflation, are resulting in significant real improvement in consumers’ incomes. It shows the direct benefit of reducing inflation and then keeping it at the current low levels.
ABSA, the Chamber of Commerce and Unisa have collaborated in a survey of small and medium sized enterprises (SME) and discovered that more than one third of them say that they are unlikely to survive for more than six months due to rising costs. Only 11,5% said that they would survive for the next two years. SMEs account for the lion’s share of employment and productivity in South Africa so their dire situation should be a cause for concern. Transport and fuel costs are their major concern with the rising cost of electricity as the second most problematic. Their ability to absorb cost shocks like Eskom’s 12,74% price hike in April this year is limited. About 25% of SMEs have had to retrench staff in the last six months and only 1 in 11 businesses have added new staff.
Trump’s tariffs on South Africa exports to America are expected to impact the motor industry worst. Motor vehicle exports to America have already reduced the number of units sent to that country to just 2875 in the first half of 2025 from the first half of 2024 when 16112 were sent. In the whole of 2024 South Africa exported R28,7bn worth of motor cars and R4,4bn worth of auto parts to America. America is South Africa’s second largest trading partner so any increased tariffs will have a negative impact. However, South Africa businesses will look for alternative markets in Europe and Asia to take the slack. The government will also provide assistance to the worst affected industries.
The motor industry is calling on the government to implement 30% tariffs on cheap imported vehicles which now account for as much as 64% of new cars sold in South Africa. The vehicles are imported from China where government subsidies allow manufacturers to reduce costs by between 20% and 30%. There has been a flood of imported vehicles into South Africa and the industry says that it cannot survive. Mercedes Benz has reduced production, and Nissan is considering closing its factory. The industry is operating at about 75% of its capacity. Motor manufacturing accounts for about 22,6% of total manufacturing in South Africa.
Agricultural exports to America increased by 10% in the 2nd quarter of 2025 and by 26% over the same quarter a year ago. Much of this increase can be accounted for by exporters trying to get orders in ahead of the imposition of Trump’s tariffs. The substantial fruit harvest contributed to the increase. The government has put in place arrangements to shield the agricultural industry from the worst of Trump’s 30% tariffs, most of which consist of relaxing the anti-trust laws around shipping and allowing exporters to work together and share information. Exporters are also obviously looking for other international markets for their produce.
The national energy regulator (NERSA) has admitted to making a mistake in calculating Eskom’s energy shortfall. This means that Eskom will now be trying to recover R54bn from consumers and businesses that use their electricity – R12bn next year and R23bn the year after. Obviously, this is going to impact electricity users very badly. Some small businesses will not survive and for consumers using Eskom power this will constitute a substantial increase in their cost of living. It will also impact the inflation rate and delay the reduction of interest rates. NERSA, like many government agencies has once again demonstrated its incompetence.
Eskom’s energy availability factor (EAF) for the three months from April to the beginning of August this year has come in at 65,4% showing a significant improvement over the past two years. In recent weeks the EAF has ranged between 62% and 70% and as electricity demand declines in the summer months it should improve even further. Three major units have come onstream – Medupi’s unit 4, Kusile’s unit 6 and Koeberg’s unit 2 - together adding about 2,5 gigawatts of power to the grid. Eskom’s main problem is its on-going price increases which are forcing more and more consumers and businesses to find alternative, mostly solar, solutions.
A new study produced by the Reserve bank suggests that climate change will have a significant impact on the South African economy through droughts, floods and unpredictable rainfall patterns which will increase the cost of production in the agricultural sector and cause cost-push inflation. This could force the Reserve Bank’s monetary policy committee (MPC) to increase interest rates to contain inflation resulting in an economic downturn. Climate induced shocks to the economy could also impact employment levels in various sectors, especially if they are prolonged. Aside from the general impact on the economy, rising food inflation will have a direct impact on food producers, retailers and other listed companies. In our view, it is becoming increasingly important to consider the climate exposure of listed shares before investing.
The rising levels of crime and illegal firearms in South Africa is a reflection of the high level of unemployment, ineffective border control and poor quality of policing in the country. The latest “Victims of Crime” report shows that incidence of murder, housebreaking and rape are increasing steadily. Illegal possession of firearms increased by 2,7% in the year while burglaries have increased from 1,9m in 2020/21 to 2,6m in 2024/25. Substance abuse is one of the main causes of crime as is the high rate of illegal immigration into the country. Obviously, the high crime rate is not good for the economy generally and discourages foreign direct investment (FDI).
The Rand
The rand continues to be range-bound against the US dollar, testing and re-testing the R17.50 level. It briefly broke below that level last week on Friday but quickly weakened again. Its strength since the beginning of June 2025 is linked directly to the general move in international investor sentiment back towards “risk-on”. As the fears around Trump’s tariff regime faded, investor sentiment began to focus once again on AI which is still driving productivity on S&P500 companies and on all companies around the world. On the 3rd of July this year, the S&P500 rose to a new record close at 6279 and at the same time the rand reached a new cycle high against the US dollar - and for the same reason. Consider the chart:
In our view, the rand will in the coming weeks break below the R17.50 resistance level and continue to strengthen – just as Wall Street will continue to record new record highs. The AI revolution which is driving Wall Street has only just begun in our opinion.
The rand continues to be one of the most liquid and freely traded emerging market currencies in the world. As such, when sentiment turns to risk-on it tends to strengthen rapidly – even if sentiment towards South Africa at the time is negative or neutral. The relative success of the government of national unity (GNU) is helping to improve the general perception of South Africa among overseas investors - and that encourages foreign direct investment (FDI), but the fluctuating attitudes of international investors towards high-risk, high-return emerging market assets is a much more powerful market force.
Commodities
GOLD - In last month’s Confidential Report, we drew your attention to the fact that the US dollar price of gold was approaching the resistance level at $3424 for the fifth time and suggested that it might break up through that level. That happened on Friday last week when the metal rose to $3443 on the strength of investor confidence that the Federal Reserve Bank would reduce interest rates at its meeting in September. Consider the chart:
We now expect gold to continue its upward trend, and gold producing shares like Sibanye and DRD to benefit.
BRENT OIL – The price of North Sea Brent Oil has fallen back from resistance at $72 per barrel and is now trading for about $68. The continuous destruction of Russian oil facilities is now estimated to have cut the availability of fuel in the country by as much as 20% and may be beginning to impact oil exports. Oil speculators were briefly encouraged by Trump’s meeting with Putin in Alaska but when it turned out to be a non-event as far as reaching a peace deal was concerned, the oil price bounced back. We believe that the general decline in energy prices is a direct function of the steady implementation of alternatives, especially as solar power becomes cheaper and more ubiquitous. What was a support level at around $72 has now looking more and more like a resistance level and we believe that Brent will probably struggle to get back above that level. Consider the chart:
The chart shows the long-term downward trendline which has been in place since September 2023 and is supported by various declining cycle highs. It also shows that Brent has fallen convincingly below the support level at $72 reaching a cycle low of $60m two months ago in May. We believe that barring a major escalation of tensions in the Middle East, the oil price is likely to continue drifting down.
PLATINUM – In May this year, the platinum price broke up through its long-term downward trendline. That downward trend has been in place since the sub-prime crisis of 2008, so the upside break was somewhat unexpected. We drew attention to the upside break in last month’s Confidential Report and pointed out the on-going supply problems. Simply put there has been insufficient investment in PGMs, and especially platinum itself, for many years resulting in shafts being closed and workers being laid off. It can take up to ten years for a new mine to be brought into production, the current supply problem is likely to be protracted, especially given the growing interest in hydrogen fuel cells. Consider the chart:
Platinum Group Metals (PGM) also benefit from increased military expenditure – so the wars in Ukraine and the Middle East will benefit PGM demand if they continue. The European Union (EU) is ramping up military spending towards 5% of gross domestic product (GDP) by the year 2035. Germany’s Finance Minister has said that the country plans to increase its military spend to 3,5% of GDP by 2029. PGMs are used in the manufacture of aircraft engines, lasers and night vision equipment as well as missiles and capacitors. Another area of increased demand comes from the spread of hydrogen fuel cells which is expected to increase 10-fold in the next four years. Fuel cells are gaining acceptance as a practical clean-energy alternative to solar and wind power.
We expect PGMs to continue to appreciate as the supply shortage deepens and demand increases.
Companies
WINNING SHARES LIST
You will have noticed that the number of shares on the Winning Shares List (WSL) has increased in recent weeks. This is because the JSE, following Wall Street, has been reaching new record highs. The WSL now has 120 shares of which 10 have gone down since they were added and 22 are performing above 100% per annum. There are three new additions which particularly warrant watching. They are Sasol, Astral and Grindrod. All three have gone up sharply in the last week since they were added. The worst performer on the list is currently Firstrand which is down 3,94% since it was added, but which we see as undervalued and due for an upward re-rating. Altogether 10 of the shares on the list have fallen below the prices at which they were added.
BANKS
Banking Shares are a good barometer of the health of the economy. The JSE Banking Index (JS3011) is a market-cap-weighted index that reflects the performance of South Africa’s major listed banks. Consider the chart:
As you can see, the recovery from the COVID-19 pandemic was followed by a two-year period of sideways movement. That was broken by the formation of the government of national unity (GNU) last year. The GNU is generally perceived as being a very positive development for the economy and has already resulted in some notable reforms.
Banking shares have been improving steadily, but they still look cheap to us. The key is their dividend yield (DY). Usually, any blue-chip share which is trading on a DY of 5% or more is regarded as cheap and will attract institutional buying. Right now the banking sector is on a DY of 5,5% and is trending up towards a new record high. Standard Bank has reached a new all-time record a week ago at R255 per share and we expect the other major banks to follow.
In general banks offer the investor a very stable, relatively risk-free investment which will pay regular dividends and grow slowly over the long term. In South Africa, Capitec is perhaps the exception. In March 2002 you could have bought Capitec shares for 92c each and today they are trading for R3568 each. In their 2025 financial year they paid out a dividend of R65.10. The only problem is that because of their meteoric rise, their shares are relatively expensive trading on a DY of 1,46%. We published an article recommending Capitec 7 years ago on the 19th of February 2018 when it was R800 a share and we added it to the Winning Shares List (WSL) on the 4th of November 2023 at R1855. Consider the chart:
The chart shows Capitec’s progress from March 2002, including the impact of the sub-prime crisis in 2008 and the effect of COVID-19 in 2020. We expect it to continue to perform strongly.
MTN GROUP (MTN)
MTN competes directly with Vodacom, Cell-C and Telkom for the connectivity market in South Africa, but actually its business in South Africa is only a part of its total business which extends throughout Africa. Nigeria is its strongest market and accounts for most of its growth. In its results for the six months to the 30th of June 2025 the company reported service revenue up 23,2% and headline earnings per share (HEPS) of 645c compared with a loss of 256c in the previous period. In Nigeria service revenue increased by 54,1% and data revenue by 68,5%. In general the first half of 2025 was supported by better macroeconomic conditions and more stable currencies in those parts of Africa where the company operates. Consider the chart:
The chart shows MTN’s share price from December 2024 to date. As you can see, it began performing strongly from the beginning of this year and we added it to the Winning shares List on the 15th of January 2025 at a price of 9729c. Since then it has been in a strong upward trend and reached a record high of 17268c on the 14th of August 2025.
So MTN is a more volatile company than Vodacom because it has extensive businesses in Africa and is vulnerable to currency fluctuations. Its investment in Africa, however, also gives it enormous potential for growth which Vodacom does not generally share. We expect it to continue performing well in the future, although it is obviously risky.
PREMIER (PMR)
Premier is a company whose major business is the production of baked products mainly for markets in Southern Africa. It also produces and markets feminine hygiene products and a variety of confectionary products. The company is directly impacted by the prices of grains on international markets and especially the local price of maize. In the year to the 31st of March 2025 the company reported revenue up 7% and headline earnings per share (HEPS) up by 26,8%.
From September 2024, the share was included in the JSE/FTSE All-Share index. This resulted in a much stronger demand for its shares from institutional investors who needed to include it in their index-tracking portfolios. At the time we decided to anticipate this development by adding it to the Winning Shares List (WSL) on the 21st of August 2024 at a price of 7635c. Consider the chart:
Since we added it to the WSL it has appreciated by 88,6% in just over a year. We expect it to continue going up for the foreseeable future as it benefits from the advent of the government of national unity and lower maize prices.
WEBUYCARS (WBC)
Since its listing on the JSE in April 2024, WeBuyCars has performed extremely well. It published its maiden results on 14th June 2024 and has been steadily gaining ground as it attracted institutional interest. More recently, on the 19th of May 2025 it published its results for the six months to the 31st of March 2025. In those results revenue was up 15,2% and the company produced a headline profit of 121,5c per share. Buying and selling volumes at 92 339 and 91 392 units were up 12,9% and 13,5%, respectively. Consider the chart:
This company is consolidating the second-hand car industry in South Africa and has achieved some notable economies of scale. It performs far better that those companies (like CMH) which are involved in the sale of new cars because it has complete control over its margins. We always felt that it would be a share with great potential and it was added to the Winning Shares List (WSL) on 3rd May 2024 at a price of 2085c. It has subsequently gained 125,94% in just over 15 months. We expect it to continue performing well in the future.
THE PURPLE GROUP (PPE)
The Purple Group is best known for their innovations in the equity market with Easy Equities and other related financial services businesses. They now encompass crypto currencies, asset management, retirement annuities, exchange traded funds and property. In their results for the six months to 28th February 2025 they reported revenue up 25,8% and headline earnings per share (HEPS) up 204%. Their active client base increased by 8% to slightly over one million.
At the beginning of this year the share was moving sideways and did not appear interesting to us. Then in April it began to appreciate and we added it to the Winning Shares List (WSL) on 16th April 2025 at a price of 120c. It has subsequently moved up to 170c - gain of 41,6% in just over 4 months. Consider the chart:
We expect the share to continue to perform, especially once it begins to attract more institutional attention.
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