Sasfin Securities David Shapiro joins the BizNews group as Monday evening’s BizNews Energy Hour co-host, with the veteran analyst outlining that markets have had a strong begin to the week after a interval of concern. Commodities got here off strongly in the course of the latter a part of final week with the JSE All Share Index negatively effected as a result of lopsided weighting of useful resource counters on the native bourse. Shapiro and Bronwyn Nielsen contact on quite a lot of subjects in the course of the dialogue, with the rand and Shapiro’s ‘pick-and-shovel’ inventory picks the principle speaking factors. Visibly excited, Shapiro talks us by means of his first expertise in a Tesla, of which he’s extraordinarily complimentary. – Justin Rowe-Roberts
David Shapiro on what is occurring within the markets:
It’s tough to place all of it collectively and to resolve the place to go. Look, the one factor that’s bettering is markets are just a little steadier as a result of we had a little bit of a scare final week. We weren’t fairly certain the place we have been going – notably with what was occurring in Afghanistan and the Fed minutes about pulling again and tapering. So all of this stuff did shake the market. In truth, there was much more unhealthy information than excellent news. I’m nonetheless struggling to search out the excellent news, however markets held up and it’s a very good signal to see this morning that even Asian markets are bettering quite a bit. So I nonetheless suppose we going to…I don’t wish to say limp by means of to the top of the yr, however we’re in all probability simply going to ratchet up very slowly into the brand new yr. And the opposite good factor is that I feel commodity markets have stabilised as a result of what we noticed on our market final week was an enormous shake up in commodities, which was additionally a little bit of a scary transfer. So I’m hoping that there’s some base being shaped in and the consumers are returning and issues are getting steadier.
On the place the rand is heading:
Properly, I don’t suppose anybody is an professional in currencies. I feel you maintain your self out to be an professional. You’re setting your self up for failure. I’m watching it fastidiously. I’m extra of a commodity bull than a bear. I feel that we’ll discover a degree and issues will choose up as a result of I’m basing this on the themes which are dominating the worldwide economic system, which is round local weather change. I feel we received to resume not solely the digital economic system – not solely the setting – but in addition the bodily economic system. These are market strikes after some very robust upward strikes, you get corrections. I’m taking my lead from mining bosses – I feel you’ll discover commodity costs regular. That may nonetheless dictate the extent of the rand. So I feel we’ve had the shock with R15.35 (in opposition to the greenback) – I’d in all probability guess it would degree across the R15 degree. I’m not a pessimist to the R18 degree as a result of with that can come some very critical actions in international markets.
On the monetary sector, particularly the banks:
I don’t analyse it to a degree the place I can actually differentiate, to an extent. I have to say that the majority of my funding focus is offshore. However in fact I preserve a really watchful eye on what’s occurring in South Africa. You’ve heard me earlier than, I like to have a look at the macro image. It doesn’t imply I don’t go into the micro degree and have a look at companies individually, however I’m nonetheless extra involved in regards to the macro degree and I haven’t seen something in ABSA or in Commonplace Financial institution’s outcomes that will get me excited. It exhibits me that companies aren’t going out with growth in thoughts and borrowing – they aren’t saying we want cash to construct new factories to broaden our operations. Plenty of the companies would possibly have already got cash – actually the mines have. That’s the aim of a financial institution – it’s actually to fund growth, not likely to fund consumption – as a result of that’s harmful lending. So I’m nonetheless not satisfied that we’ve seen any factor of that but. And when that begins to occur, then I’m going to get bullish. And the opposite story – the place I do like financials, is on the cost facet of issues.
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