ALUMA CAPITAL FSP 46449

Online Trading Specialist

THE MORNING NOTE

The Morning Note
24 May 2019 | www.alumacapital.co.za | Research@alumacapital.co.za

South African markets closed in the red yesterday, pulled down by broad based losses in financial and banking sector stocks. Financial companies, Discovery, Sanlam and Old Mutual dropped 4.6%, 3.2% and 2.3%, respectively. Bankers, Nedbank Group, Standard Bank Group and FirstRand declined 3.5%, 2.4% and 2.2%, respectively. Retailer, Massmart Holdings plummeted 13.1%, after the company reported that it expects a substantial decrease in its 1H19 HEPS. Brait SE plunged 12.5%, following a decline in its FY19 Net Asset Value per share. Peers, Shoprite Holdings, SPAR Group and Truworths International shed 3.8%, 2.3% and 2.1%, respectively. Moreover, oil company, Sasol slid 5.8%, extending the previous session’s losses. Market heavyweight, Naspers fell 2.4%. On the flip side, gold miners, Sibanye Gold, Gold Fields and AngloGold Ashanti gained 1.8%, 1.4% and 1.0%, respectively. The JSE All Share index declined 1.7% to close at 54,271.24.

Corporate Updates

Foschini Group Limited: The apparel retailer, in its FY19 results, indicated that its revenue rose to R37.13bn from R31.46bn posted in the corresponding period of the previous year. Its diluted EPS increased 6.7% from the same period of the prior year to 131.30c. The company declared a gross final dividend of 450.00c per share.

Tsogo Sun Holdings Limited: The hotel, gaming, and entertainment business, in its FY19 results, indicated that its net gaming revenue rose to R9.82bn from R8.12bn posted in the corresponding period of the previous year. Its diluted EPS decreased 26.0% from the same period of the prior year to 147.60c. The company declared a final gross dividend of 56.00c per share.

Massmart Holdings Limited: The retail company announced that Mitchell Slape has been appointed as Chief Executive Officer (CEO) and Executive Director of the company. He replaced Guy Hayward who will therefore step down as CEO but will remain in the company until later in the year to ensure an orderly handover and transition. Separately, the company in its trading statement for the first 20 weeks of FY19, revealed that group sales rose 6.1% to R33.50bn. The company expects its 1H19 HEPS to be 50.0% lower compared with the same period of the prior year.

Brait SE: The investment holding company, in its FY19 trading statement, revealed that the company expects its net asset value per share to be between R40.75 and R42.75.

Hosken Consolidated Investments Limited: The investment holding company, in its FY19 results, revealed that its revenue advanced 5.0% from the same period of the preceding year to R15.33bn. Its diluted EPS stood at 821.49c, compared with 1,056.23c recorded in the corresponding period of the previous year. The company declared a final ordinary dividend of 210.00c per share.

Hospitality Property Fund Limited: The real estate investment trust, in its FY19 results, reported that its revenue declined 4.5% from the same period of the preceding year to R827.79mn. Its diluted loss per share stood at 33.74c, compared with EPS of 22.97c recorded in the corresponding period of the previous year.

Afrimat Limited: The open pit mining company, in its FY19 results, stated that its revenue increased to R2.97bn from R2.38bn posted in the corresponding period of the previous year. Its diluted EPS rose 22.6% from the same period of the prior year to 219.50c. The company declared a final dividend of 62.00c per share.

Ascendis Health Limited: The healthcare company announced that Mr Thomas Thomsen, CEO and Executive Director will step down from his roles as his employment contract has been terminated with immediate effect. Mr Andrew Marshall, current Chairman will act as CEO until a suitable replacement for the role is appointed.

Niveus Investments Limited: The investment company, in its FY19 results, indicated that its revenue rose to R18.40mn from R17.33mn posted in the corresponding period of the previous year. Its diluted loss per share stood at 46.50c compared with an EPS of 153.70c from the same period of the prior year.

Brait’s net asset value to decline by a quarter: Two months after angering some investors by committing additional resources to bail out an executive share ownership scheme, Brait said its net asset value (NAV) per share would fall by about a quarter for the year ended March.

Momentum says high-profile life claim has made more people disclose information: Momentum, the insurer that came under fire in 2018 for initially refusing to pay a claim to the family that lost its member through violent crime, says it has not seen a trend of customers buying less or cancelling their insurance.

Regulatory review could boost SME funding, says Absa: Absa Bank’s head of business banking in North West Kgalaletso Tlhoaele has asked the Black Business Council (BBC) to lobby the government about making exceptions for the reserves banks need to hold when lending to small- and medium-sized enterprises (SMEs) so that more businesses can get business loans and at cheaper rates.

Diversification yields dividends for Afrimat: Open-pit mining group Afrimat’s diversification strategy paid off in the year ended-February as its bulk commodities business countered poor performance from its other segments.

Falling egg prices and rising raw material costs hit Quantum Foods: Quantum Foods, the Western Cape-based poultry and animal feeds business, has bemoaned rising feed raw material costs and declining egg prices, which have put pressure on its operations.

Healthy iron ore prices boost Afrimat’s full-year earnings: Building materials supplier Afrimat says earnings rose 29.6% in the year to end-February, thanks in part to higher iron ore prices. Group revenue rose 24.6% to R3 billion, while headline earnings per share grew 29.6% to 234.1c, the group.

Hulamin: Bloated and battling: Aluminium extraction specialist Hulamin — which was unbundled from Tongaat Hulett in 2007 — came under fire at last week’s AGM for not "setting the tone at the top" in terms of its much-hyped cost-cutting endeavours.

British Steel in liquidation after failing to secure loan: London — British Steel, the country’s second-largest steel producer, has collapsed after failing to secure emergency government funding, jeopardising some 25,000 jobs, Britain’s official receiver said on Wednesday.

Avon to recruit 500,000 sales agents in SA: Beauty company Avon says it will recruit 500,000 resellers in SA by 2020 as part of its drive to grow its local business and also promote entrepreneurship.

TFG’s investment in online offering pays off: Clothing group TFG, whose brands include Foschini, American Swiss and Markham, went against the prevailing retail trend by producing strong results in a difficult economy.

Massmart appoints new CEO, but shares fall on warning earnings will halve: Shares in Massmart, which owns the Game and Makro chains, fell 12.5% to R68.24 in early trade on Thursday after the retailer said earnings in the six months to June could more than halve.

Pret a Manger buys EAT as demand rises for vegetarian options: Bengaluru — Pret a Manger (Pret) has bought smaller rival EAT, the British sandwich and coffee shop chain said on Wednesday, as it looks to capitalise on the thriving vegan and vegetarian market through its Veggie Pret brand.

Montauk facing the big question: Montauk Energy*, which produces gas and electricity from landfill sites across the US, has reversed the astounding price gains made in 2018 when the counter was one of the JSE’s few big gainers.

Weak trading conditions weigh on Hospitality Property Fund: Hospitality Property Fund, a subsidiary of gaming and leisure group Tsogo Sun, said that rental income in the year to end-March fell 4%, largely due to a poor performance of its Western Cape assets.

Amazon working wrist-worn ‘human emotion reader’: Seattle — Amazon is developing a voice-activated wearable device that can recognise human emotions. The wrist-worn gadget is described as a health and wellness product in internal documents reviewed by Bloomberg. It’s a collaboration between Amazon Lab126, the hardware development group behind Amazon’s Fire Phone and its Echo smartspeaker, as well as the Alexa voice software team.

Mediclinic set to roll out more day clinics: Private clinic and hospital group Mediclinic International intends to build six more-day clinics in the next two years, CEO Ronnie van der Merwe said on Thursday. The group said day clinics are a new growth area.

Mediclinic’s R7.4 billion impairments drag it to another loss: Mediclinic International says it made another annual loss after writing down the value of its investments in UK-based Spire Healthcare Group and Switzerland’s Hirslanden by a combined £405 million (R7.4 billion).

Tsogo Sun will bring the largest hotel business in SA to public investors: Tsogo Sun is set to list the country’s largest diversified hospitality group on the JSE in June, giving investors exposure to an array of top-rated hotels such as Monte Casino.

Source: Bloomberg, ShareData, RMB & Anchor Capital 

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Increase in Value Added Tax (VAT)

The National Treasury announced an increase in Value Added Tax (VAT) from 14% to 15% effective 1 April, 2018.

As a result some of our services subject to VAT will increase on the 1st April 2018.

Changing of Withdrawals Process

Dear Valued Client,
 
We are in the process of releasing our automated withdrawals module on Tradedesk.
 
From the 22nd February 2018, clients will need to login to the Tradedesk portal in order to request a withdrawal.

Please follow this link for a user guide: How to request a withdrawal from your trading account
 
If you have any questions please contact the support team.

Android Mobile Application Update 

We are pleased to advise that we have released an updated ProtraderSA application on the Google play store.
 
Clients using android devices should please update the application at your earliest convenience.

 

Aluma Capital clients received the following high-probability trade idea via SMS

"Learn the art of patience. Apply discipline to your thoughts when they become anxious over the outcome of a goal. Impatience breeds anxiety, fear, discouragement and failure. Patience creates confidence, decisiveness, and a rational outlook, which eventually leads to success." Adams

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