Gone in a Flash

Good morning {{first_name}},

There’s never a dull moment in this journey called adulting.

I’m not even talking about my malfunctioning alarm sensor in my garage last night, which decided to sing the song of its people twice between 4am and 4:30am. No, I’m talking about the Ghost Mail website, which has been through a serious technical wobbly and is currently recovering in IT hospital.

This means there are no Ghost Bites this morning. There are also no links to the Ghost Mail site at all. But despair not, as it gives me a rare opportunity to just write a letter to you here in the mailer. Don’t get used to it - I can’t make a living without a website!

Well, not yet at least. If ever there was an indication of the importance of YouTube and being on channels like Apple Podcasts and Spotify, this is it. I do have some goodies to recommend this morning, so look out for that.

But first, the biggest story on SENS yesterday was Pepkor, with news of the combination of Flash and Shop2Shop to create a fintech platform that they believe is worth R21.3bn . That’s a very big number, particularly compared to the market cap of Truworths (R21bn) and The Foschini Group (R18bn).

Pepkor will hold 57.1% in “FintechCo” by contributing Flash (worth R10.6 billion) and investing R1.57 billion in cash.

Ultimately, this is a play for the informal market in South Africa, which is core to Pepkor’s growth story. They even plan to separately list FintechCo, so that suggests a value unlock opportunity down the line.

The underlying fintech and (future) banking story is why I’m long Pepkor in this sector. But despite this exciting news, the share price fell nearly 3%. In fact, it found a new 52-week low!

Guess who will be buying this dip? Yes, that’s right…

Internationally, Alphabet (the parent company of Google and YouTube) released results. Somehow, they grew Search revenue by 17% year-on-year, despite the fact that usage of the internet has changed so much.

At YouTube, revenue growth was up by 13%. Revenue in that segment topped $11bn, so they aren’t far behind “Subscriptions, Platforms & Devices” at nearly $13bn. Search remains the biggest part of the group though, contributing $63bn of the total group revenue of $95bn.

I can certainly see the importance of YouTube, which is exactly why I’ve been putting effort into growing my channel there. There’s a lot more to come! Aside from Shorts and excerpts from other podcasts, I’m doing a Ghost Bites podcast that serves as a highlights reel of SENS, with the results of the polls in Ghost Bites for additional context. Please do check it out and consider subscribing to the channel.

I’m also going to send you in the direction of Magic Markets this morning, with the latest podcast covering the world of listed property. On the global stage, Mohammed Nalla takes us through Simon Property Group, Equinix and Digital Realty. Locally, I handled Hyprop and Supermarket Income REIT as examples of capital raises. Enjoy it here.

Finally, PBT Holdings will be presenting on Unlock the Stock later today. Recent results were encouraging, but the share price has been stuck in a range for a while. Is that an opportunity? Register here and attend the event to make up your own mind.

Have a lovely day!

Wall Street closed lower yesterday in a volatile session, with the Nasdaq leading the declines. After the closing bell, Alphabet and Tesla results saw both stocks trading lower in after hours markets. Alphabet's results beat consensus, although markets remain sceptical around the sustainability of earnings trajectories.

Asian equity markets are mostly higher this morning, with the Hang Seng, KOSPI and Nikkei all firmer on the day, although Chinese benchmarks are slightly lower. Semiconductor stocks are leading gains within the region.

The Houthi blockade in the Red Sea is further complicating global oil trade routes and contributing to the continued rise in crude prices, which now approach the $100 a barrel mark.

Surprisingly, the dollar softened yesterday despite the Middle Eastern threat to inflation, lending rates and related risks. The softer dollar has lent support to precious metal prices which, while off yesterday's highs, continue to trade near two week highs.

The rand remains firm. Yesterday's 5% CPI inflation figure for June may be enough to support a marginal 25 basis point hike at today's SARB MPC meeting. The JSE All Share Index is expected to open cautiously this morning.

The ECB announces its rates decision, followed by a press conference, today. In the US, we await initial jobless claims data.

This update is provided by Shaun Murison, Senior Market Analyst at randswiss.com. Connect with him on LinkedIn here and follow him on X here.

Key Indicators:

USD/ZAR R16.42/$ | US 10yr 4.66% | Gold $4,103/oz | Platinum $1,645/oz | Brent Crude $95.95