Tag: Formations

FirstRand


FirstRand (FSR) is a company listed on the Johannesburg Stock Exchange (JSE), well renowned and highly favoured by big institutions because of its large volumes (trading daily on average 1.3 million shares per day) and its quality management.

It operates in 10 African countries, and has platforms in Africa, Asia and Europe. It also has representative offices in Dubai and Shanghai, as well as a branch in India. The company was founded by Laurie Dippenaar, G.T. Ferriera and Paul Harris in the 1970’s. With a market capitalisation of R355bn, it is by far the largest banking group in South Africa. FNB offers a diverse range of banking products to consumers, small and large businesses and government departments. Wesbank is the largest asset financing company in Southern Africa covering vehicles of all types, both private and consumer, as well as aviation assets and agriculture. It also has operations in the UK and in Africa to the North. Ashburton is in asset management and related markets in the UK. RMB offers corporate and investment banking in 35 African countries. Read More

The Confidential Report – May 2019


US Economy

Seven months ago on 20th September 2019, the S&P made a new record high at 2930 – and from that level began a correction. Corrections are completely normal and even healthy events which occur regularly during the course of a bull trend. This ten-year bull trend began on 6th and 7th of March 2009 when the S&P made an intra-day low of 666.79 on 6th and then made its lowest close at 676.53 on 7th.

The fall in the market, before this bull market began, had been caused by an American banking crisis which later became known as the “sub-prime crisis” when Lehman Brothers collapsed. What followed was an inordinate monetary policy stimulation of the world economy during which more than $12 trillion worth of quantitative easing (QE) was done to try to avoid a repeat of the Great Depression of 1929.

Ten years later we can say that the QE was eventually successful and the world economy has finally turned around – but not without some very scary moments such as the Greek crisis during which it looked as though the entire European Union was in danger. Read More

Institutional Blindness


The Business Day reported on 10th April 2019 on the Investment Forum in Sandton where several asset managers talked about the major share collapses of the past three years – most notably Steinhoff, EOH and Tiger Brands. The big institutions and major fund managers (like Alan Grey, PSG and Coronation) lost hundreds of billions of rands when these stock market “darlings” suddenly collapsed.

But in each of these cases, there was clear technical evidence that all was not well long before they collapsed.

STEINHOFF

In the case of Steinhoff, the share made a perfect declining triple top at least 15 months before the Viceroy report came out and caused the share to collapse. Consider the chart:

Steinhoff (SNH) January 2016 to April 2019 – Chart by ShareFriend Pro (Click to Enlarge Image)

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S&P500 Support


Investors have been nervously watching the progress of Wall Street against the background of mounting allegations against Donald Trump and senior members of his staff, and the “trade war” which he has instigated against China. At the same time, investors are also concerned that the continuing strength of the US economy will result in a more rapid increase in interest rates going forward.

The effect of this nervousness has been to take the S&P500 index into a correction from its all-time high of 2930 made on 20th September 2018. The fears usually associated with October month are now well behind us and it is unusual for markets to be in a corrective phase over the festive season – but then the political situation in America is nothing if not unusual. Read More

The Confidential Report – September 2018


Political

The DA’s loss of Nelson Mandela Bay and its near loss of Tshwane are perhaps a sign of the shift in political power since Cyril Ramaphosa took over as president. Without the political incompetence of Zuma to work off, the DA appears to have descended into in-fighting and has clearly lost some support. The ANC, on the other hand, appears to have benefited from Ramaphosa’s on-going reform of key government institutions – such as the National Prosecuting Authority and with the new Integrated Resource Plan (IRP) which eliminates nuclear power and moves strongly in the direction of renewable energy sources. The EFF is doing its best to be king-maker in the hotly contested administrations like Tshwane. The weakening of DA support will be a major factor in the 2019 elections.

Steady and essential clean-up of state owned enterprises (SOE) by Pravin Gordhan, with the backing of the president is vital to the recovery of the South African economy. The recent settlement with the public enterprises director general, Richard Seleke, is a good example. Seleke was implicated in various Gupta-linked e-mails and came to some negotiated agreement with the presidency to step down. The nature of the agreement is not known, but it is clear that the process of getting rid of captured senior officials at the SOEs continues. Gordhan has come in for criticism from the EFF for being too autocratic and engaging in a “reign of terror” – but perhaps that is exactly what was needed. South Africa cannot afford to delay in this clean up. Seleke also faces criminal charges from OUTA for his involvement in state capture. Read More