PBT: Big data, bigger accounting adjustments
The word “trading statement” is typically the intro line to a horror movie on the JSE at the moment. Companies need to release a trading statement when they have reasonable certainty that the results for the upcoming reporting period will differ by at least 20% (up or down) from the prior period. Think of it as either an early celebration …
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Capitec: be afraid of what you cannot see
Back in March, Capitec suffered a price drop so severe that management released a SENS announcement to try and stop the bleeding. They highlighted that earnings growth still looked reasonable and that only 9% of Capitec’s customers have credit from the bank, so it isn’t the high-risk lender that the market sees it as. They also noted that the bank’s …
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Become a realist, not an optimist
Close your eyes. Take yourself back a few months. The date is March 26th 2020. The country watches with bated breath as President Ramaphosa announces a landmark step: the country will shut down for three weeks. Just three weeks. That’s all that would be needed to flatten the curve, save lives and fight this together. R2bn in support is announced, …
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Wealth creation is a game of inches
Stock market investing / trading / speculating – all these concepts involve the purchase of shares, but the intentions and strategies vary enormously. The stock market has become appealing to thousands of new investors over the lockdown period. This is great news, because it means more people are recognizing the value of taking control of their financial futures. My worry …
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Who’s afraid of the Big Bad Bias?
Humans are a weird bunch. We oscillate between rationality and irrationality. We develop probability theories and then we don’t use them. We do odd things like differentiate between “fun money” and savings, as though there are two types of money in this world. We spend differently depending on where the money came from, even though money is perfectly fungible. We …
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Ghost (????????????????????????) busters – edition 4
In this edition, we focus on two concepts that are a core part of equity capital markets. It’s complicated to understand how listed companies work and what the benefits are, but with each term you learn and understand, you’re getting closer. Initial Public Offering (IPO) An IPO is a capital raise by a company as part of a new listing. …
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Curro: rights issue, wrong time
One of the fundamental reasons to list a company on a stock exchange is to access capital from the market. There’s so much strategy in capital raising that an entire industry of highly-paid advisors and bankers exists around it. Curro Holdings, one of the private school companies listed on the JSE, has announced a rights issue. The Foschini Group did …
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Ghost (????????????????????????) busters – edition 3
In this edition, we focus on one of the most important terms in finance: liquidity. This isn’t just useful in your investing journey, but is a key part of any personal finance decision like buying cars or houses. We will just scratch the surface of this concept. We also touch on the development board of the JSE: the AltX. the_ad …
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Multichoice – Africa’s storyteller rewards shareholders
The front page of Multichoice’s results booklet that was released today describes the group as “Africa’s most loved storyteller” – that’s beautiful, but perhaps not as beautiful as the stunning improvement in their profitability. StatsSA’s last major survey (done in 2017) estimated that there are 16.2m households in South Africa. Multichoice has 8.4m subscribers in South Africa, which suggests that …
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Capital Appreciation Group – right place, right time
The JSE was a hot place to raise capital back in 2014 – 2016. Red hot. At the height of this capital raising frenzy, the JSE allowed a new type of company to be listed: a Special Purpose Acquisition Company (SPAC). Enter the SPAC Normally, a company listing on the JSE must have a decent track record and meet stringent …
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