PDSnet Articles

Vodacom


Vodacom is the largest supplier of cell phone connections in South Africa with 39 million local customers. It also has over 30 million customers outside South Africa. In the June 2017 quarter the company added 2,5 million new customers – 2,3 million of them in South Africa. Vodacom is owned about 65% by Vodaphone.

By anyone’s standards, this company is a blue chip. Most of its income is in the form of annuity income and it has a relatively low working capital requirement because it is a service company. It does have some exposure to union action, but appears to have that well under control. It is consistently profitable and is benefiting from the explosion of smart phone usage in South Africa. Read More

The Confidential Report – October 2017


Political

Political polls are hardly solid evidence, but the May 2017 Ipsos poll is at least interesting. It showed that ANC support had fallen to 47% from the 54% that it won in the 2016 local government elections. Clearly, much now depends on who the party selects as its next leader at its December leadership conference. Ramaphosa is probably the ANC’s best option if they wish to retain their majority in the 2019 elections and the majority of ANC members support him. However, the Zuma camp might still have sufficient influence to get Dlamini-Zuma elected, but that will almost certainly lead to the ANC losing their majority in 2019. It appears quite likely that South Africa may have a hung parliament after that election. Obviously, private investors on the JSE will be very interested in the election result, but it seems unlikely that it will have a major impact on the direction of the share market – at least in the short term. Read More

Quantitative Tightening (QT)


Over the past eight years we have all become accustomed to the phrase “quantitative easing” which is a central bank euphemism for printing money. When central banks ran out of money following the sub-prime crisis in 2008, they managed the situation by simply creating vast amounts of new money and injecting it into the world economy. Read More

Record High


By now, we hope that you are an avid watcher of the S&P500 index. If not you can follow this index on your ShareFriend software or, for the minute-by-minute progress on https://finance.google.com/finance?q=INDEXSP:.INX.

The reason for following the S&P is that it is the best indicator of bull and bear markets. If the largest 500 companies on Wall Street are in a bull trend then it is a virtual certainty that other world markets including our own are also in a bull trend – or will be soon. Read More