Accelerate Property Fund: a cleaner balance sheet, but will the market care?
Hammerson is doing well – and raising capital accordingly
Hyprop has closed the acquisition of Galleria Burgas
Primary Health Properties lives up to its defensive promise
Stor-Age adds some Xtraspace to its portfolio
Accelerate Property Fund: a cleaner balance sheet, but will the market care? (JSE: APF)
Turnarounds are so tough
Accelerate Property Fund is one of the few exceptions I’ve made in my life when it comes to speculative stocks.
I generally avoid companies that have particularly high risk factors. With Accelerate, I got myself across the line through a combination of the underlying property exposure, the progress made in saving the balance sheet and the discounted share price relative to the assets.
The thing that I didn’t do was sell the shares when they climbed significantly in value. I tend to be much better at buying shares than selling them. I’m working on getting better at this. After all, nobody said investing was easy!
My position is still in the green, but not by much. This begs the question: should I be buying more?
There are a number of encouraging elements in the results for the year ended March 2026. For example, Accelerate sold four properties and vacant land for R788.5 million. Subsequent to the end of the reporting period (which was a few months ago), they’ve disposed of further assets for R278.2 million. This has done good things for the balance sheet.
With so many disposals of properties, looking at the movement in total revenue doesn’t make sense. It’s better to look at like-for-like revenue, in which case rentals were up by 1.4%. That’s not exciting, but it’s better than you would expect to see in a battered property company.
Accelerate doesn’t give such user-friendly disclosure when it comes to expenses. Property expenses were lower, but that’s impacted by disposals as well. It does look like they’ve made progress on reducing central costs as well, like professional fees.
Here’s more good news: vacancies have decreased from 19.4% to 10.9%. Once the post-period disposals are considered, vacancies are down at 8.4%. Notably, Fourways Mall saw vacancies decrease from 13.7% to 9.7%, while trading density increased by 8.4%. Recent letting is expected to take that vacancy rate closer to 5%.
Finance costs are critical to consider. Thanks mainly to asset disposals (R777.3 million was used to reduce debt), finance costs on interest bearing borrowings fell by 16.1%. The average cost of funding also helped, as this improved from 10.9% to 9.9%. Notably, a R50 million rights issue funded a R39.6 million capex bill at Fourways Mall. The rest was applied to working capital needs.
Looking ahead, the current funding facilities mature at the end of March 2027. The group has made a lot of progress, so I hope that negotiations with lenders will go well. The loan-to-value ratio has improved dramatically from 48.3% to 43.7% over the past 12 months.
The balance sheet isn’t out of the woods yet, so I’m not surprised that there’s no dividend for the period.
The more controversial element of these results is the fight with Azrapart, the entity linked to Michael Georgiou. This is a long and sordid tale that includes multiple agreements and even a business rescue process. The complexity is that there have been both assets and liabilities on Accelerate’s balance sheet related to this mess. The original plan to achieve a settlement of everything was much cleaner than where we stand today, as there’s a chance that either the asset or liability could be triggered (or both – or neither!). Uncertainty is never fun for investors.
In the prior year, Accelerate impaired the related party balance by R970.7 million, although they are still pursuing the claim. They took the conservative approach of keeping the R300 million liability on the balance sheet, so FY25 saw quite the mismatch on this issue. For FY26, they’ve now derecognised the liability of R300 million.
This means that the net asset value per share of R1.81 is arguably the cleanest it’s ever been. But it also means that there’s risk of a legal surprise putting a stain on the numbers. Technically, there’s potential for upside from the legal battle as well.
Ghost Bite: The current share price is R0.43, which puts this R920 million market cap fund on a price/book of around 0.25x. It’s trading close to 52-week lows. I’m not blind to how tough things are for consumers right now, but I’m very tempted to buy more.
Hammerson is doing well – and raising capital accordingly (JSE: HMN)
Footfall is growing in busy UK city centres
Hammerson, the UK-focused property fund, has had a very busy few days.
Towards the end of last week, they released results and announced an intention to raise up to £190 million in fresh capital for an acquisition. To give you context, that’s around 10% of existing share capital.
The acquisition in question is a 50% interest in Manchester Arndale, giving the fund exposure to the largest catchment area outside of London. The net initial yield based on the purchase price is 7.8%. This is in line with Hammerson’s strategy to focus on busy city centres where they can achieve growth in footfall, despite the obvious disruption of online shopping.
The placement was structured in such a way that space was made for both institutional and retail investors in the UK. I wish we saw more of this in the South African market. As a strong show of support in the raise, the CEO and CFO signed up for a combined £230k worth of shares.
The capital was raised through the placement of shares at 355 pence per share, representing a 3.8% discount to the closing price on 29 July. That’s a bigger discount than I’ve seen in recent raises by South African REITs, but I think that the UK institutional market is a tougher place to raise capital. South African institutions love throwing money at REITs at almost any price.
Alongside the push to raise fresh capital, Hammerson also released interim results for the six months to June 2026. This is where they reinforced the messaging around strong occupancy rates and growth in footfall in busy cities. Like-for-like net rental income was up 5% and the interim dividend jumped by a juicy 22%.
With the balance sheet in good shape (loan-to-value of 39%) and the portfolio performing well, Hammerson felt confident enough to increase the earnings guidance for FY26 to reflect expected growth of 27%. They have also updated medium-term guidance, with an expected compound annual growth rate (CAGR) in the dividend per share of 6% – 8%.
Ghost Bites: None of this timing is by accident. By waiting for the release of results to trigger the capital raise, Hammerson was able to take fresh (and positive) information to the market.
Hyprop has closed the acquisition of Galleria Burgas (JSE: HYP)
On the other side of this deal, we find MAS (JSE: MSP) as the seller
Back in May, Hyprop announced the acquisition of Galleria Burgas in Bulgaria. As those who follow Hyprop closely will know, the company has interests in Eastern Europe in addition to the South African portfolio of iconic shopping centres.
The underlying property was valued at €122.2 million. Due to the debt in the entity that holds the property, the purchase price of the shares was only €53.5 million. This is essentially the net asset value of the company that Hyprop has acquired.
The seller is MAS, the property company that is making a lot of noise about not really being a property company anymore. MAS has just reconstituted its various board committees. It’s anyone’s guess what assets they will buy going forwards.
Ghost Bite: Hyprop is sticking to its knitting with this deal. Nobody really knows what MAS is up to!
Primary Health Properties lives up to its defensive promise (JSE: PHP)
Despite all the macroeconomic noise, the portfolio is solid
Primary Health Properties has released an important set of financial results. The interims for the six months to June 2026 reflect the combination of this company with the business of Assura. You may remember that merger process how Primary Health had to beat off other potential buyers.
This is why the numbers feature growth rates like 123% in net rental income. This is obviously not the growth being achieved by the assets on a like-for-like basis. In fact, in a share-for-share merger, the quickest way to see this is to compare the total number to the per-share numbers. With HEPS flat for the period and with the dividend per share up by only 2.8%, it’s clear that most of the growth is thanks to the merger.
To be fair, the strategy is built around a defensive healthcare portfolio rather than a fast-growing asset class. It’s been a tricky time in the world, so a modest uplift in the value of the property portfolio is indicative of the assets doing their job. 76% of the group’s rent is funded directly or indirectly by the UK and Irish governments.
Here’s a stat that is fun to compare to South African REITs: the loan-to-value ratio of a developed market property fund. Primary Health Properties has a LTV of 57%, which is a ratio that would send a South African fund into a crisis. But with a weighted average cost of debt of 3.8% in a stable market like the UK, having more leverage on the balance sheet is key to unlocking better returns. I must point out that the target range is 40% to 50%, so they are running a hot balance sheet even by UK standards. Still, South African funds tend to target 30% – 40%.
The corporate finance reshuffling isn’t over, either. Hot on the heels of the merger, they are now looking at establishing a joint venture with an institutional investor that Primary Health would seed with £0.7 billion in private hospital assets. The company would look to act as asset manager, so the idea is to juice up return on equity by generating fee revenue in addition to rentals.
Ghost Bite: This is more of a “get rich” rather than “stay rich” asset, which is why it appeals to institutional investors looking after the interests of income-focused investors. Those with higher risk appetite and a growth mindset would probably look elsewhere on the market.
Stor-Age adds some Xtraspace to its portfolio (JSE: SSS)
There are juicy management fees to be earned as well
Stor-Age has announced the acquisition of 10 Xtraspace properties for R387 million. The portfolio is spread across the Western Cape, Gauteng and KZN.
Importantly, Stor-Age has also locked in a deal to manage a further six Xtraspace properties for an initial period of two years. Xtraspace has been around since 2007 and has 16 properties, so Stor-Age will either own or manage the full Xtraspace portfolio going forwards.
This approach is in line with Stor-age’s recent push to earn more management fees as part of its operating deal.
But what is the magic of management fees?
As all bankers know, it’s about OPM – Other People’s Money. If you are getting paid to manage someone else’s capital, it does wonders for your own return on capital. You’re getting a return without needing to put money down.
In practice, Stor-Age is very much still a capex-heavy landlord. They are just open to opportunities to drive higher returns through management deals as well.
Ghost Bite: It wouldn’t surprise me at all to see Stor-Age acquiring the remaining six properties in years to come. That’s often how these things turn out in the end, unless the owners of Xtraspace are happy to keep their long-term capital tied up in properties that they are no longer managing.
Nibbles:
Primeserv (JSE: PMV) has very little liquidity in its stock, with an average daily value traded of around R20k. For this reason, the results for the year ended March 2026 only get a passing mention in the Nibbles. The liquidity is a pity, as the business support services group grew HEPS by an impressive 12% despite revenue increasing by only 2%. This R330 million market cap company has seen the share price increase by only 7.7% over 12 months, so the market isn’t paying much attention here.
Lesaka Technologies (JSE: LSK) announced the details of a new employment agreement with the Executive Chairman, Ali Mazanderani. The agreement takes the parties to June 2029, with Mazanderani committing 50% of his time for an annual base salary of $600k. He’s not eligible for cash bonuses. In addition, he has an employment contract with the South African subsidiary that runs until June 2028, although it may be extended to 2029. This contract pays R5 million per year plus up to R4 million in travel. No other bonuses will be applicable.
Africa Bitcoin Corporation (JSE: BAC) has found a way to describe itself as the “world’s first bitcoin backed SME growth accelerator”. The word “backed” is working very hard at the moment, as the bitcoin holding is tiny relative to the rest of the balance sheet (R1.5 million out of R512 million). The latest from the company is that they’ve placed new shares and raised R5.5 million in the process. Also, trading in the shares on the Aquis Growth Market in the UK will commence from 17 August.
AngloGold’s profits soar, but watch out for inflation
Someone needs to explain to Hulamin how trading statements work
Impala Platinum has made a ton of money this year
MC Mining prepares for a milestone quarter
August 2026 will be absolutely critical for Orion Minerals
AngloGold’s profits soar, but watch out for inflation (JSE: ANG)
The gold price pulled them through in Q2
AngloGold’s second quarter is a useful reminder of why this saying exists: “It’s a gold mine!”
With the gold price remaining at juicy levels (up 35% year-on-year), the company grew Q2 2026 EBITDA by 46%.
Now, you might be wondering why the EBITDA increase isn’t higher, as a period of such strong metal prices usually drives a considerably higher increase in earnings. You’ll find part of the answer in the total cash costs per ounce, which increased by 21% year-on-year. Although this increase is lower than the percentage increase in the gold price, it was high enough to take some of the shine off.
This was driven by a mix of factors including labour, royalties, fuel and forex. Here’s the breakdown, for those of you who don’t follow me on X:
Another factor that explains the gap between the gold price and EBITDA movements is the amount of gold sold. Aside from the sale of Serra Grande in December 2025, there was lower production at Obuasi due to a tragic fatality of a contractor. When combined with maintenance projects, this led to a decline in gold production of 7.5%.
Thankfully, the gold price did more than enough to offset the lower production and higher costs per ounce. When combined with other sources of leverage in the business, AngloGold experienced a 58% increase in HEPS.
The next thing you should ask yourself is: did this translate into cash returns for shareholders?
Free cash flow was up 36%, so the impact of capex is being felt. The company is investing heavily in the future, with non-sustaining capex doubling (from $108 million to $217 million). Sustaining capex was also up significantly ($332 million vs. $273 million in the comparable period).
A highlight for investors will be the sharp increase in the dividend. Year-to-date payments to shareholders (i.e. Q1 + Q2) came in at 188 US cents per share – more than double the 92.5 US cents in the comparable period. More cash will be raining down on investors, with a share buyback programme of $2 billion approved by shareholders in July.
This performance has given the company confidence to reaffirm the 2026 guidance, although the important caveat is that production is heavily weighted towards the second half of the year.
Ghost Bite: After a generational run, gold took a breather in early 2026. Even the yellow stuff can be the victim of a hype cycle! Here’s an indication of the volatility, with the 52-week low at R799.25 and the 52-week high all the way up at R2,146.73:
Someone needs to explain to Hulamin how trading statements work (JSE: HLM)
I somehow doubt they achieved incredible clarity on earnings in the space of a weekend
As part of my new approach to earnings season, I’m going to group updates together in a way that makes sense. Previously, I would’ve written about Hulamin’s trading statement (released on Friday) in this morning’s Ghost Bites. I would’ve ignored the freshly released results out on SENS this morning and only written about them tomorrow. This doesn’t feel like a good user experience for you.
Not that Hulamin seems too bothered about user experience, mind you. The point of a trading statement is to be an early warning system for investors when earnings will move by more than 20%. Best practice is definitely not to release a trading statement at 3pm on a Friday and then results at 7am on Monday!
It’s not like the 20% threshold was in any doubt. Reported HEPS increased from 15 cents per share to 79 cents per share. They’ve known about the 20% movement for a while now. This is an area of the rules where I feel that the JSE needs to show some teeth.
Before carrying on, normalised headline profit per share from continuing operations tells a very different story. This metric was down by 62%, coming in at 10 cents. The big difference here is the removal of metal price lag and any non-trading income or expenses.
For further context (and as we saw in the comparable period), there’s no interim dividend.
A mixed bag of operational results saw revenue from continuing operations increase by only 2%. The good news is that the commissioning and quality problems in the can business in the second half of 2025 have largely been resolved, with production ramping towards the upgraded plant’s design run-rate. The drag on performance was rolled products, down year-on-year but improving over the six months.
This suggests that some positive momentum could be carried into the second half of the year. Investors will certainly hope so!
It’s worth mentioning that Hulamin has been streamlining its group. The disposals of both Hulamin Extrusions and Hulamin Containers are now complete. The effective date on the Extrusions sale was 1 July 2026, so those proceeds will improve the balance sheet for the second half of the year.
Ghost Bite: The share price spiked on Friday afternoon, but I would wait for today’s trading before forming any conclusions. The stock has lost 22% of its value year-to-date.
Impala Platinum has made a ton of money this year (JSE: IMP)
But the share price chart suggests that the good times didn’t last long
Impala Platinum released a production update for the year ended June 2026. Production from managed operations increased by only 0.7%. 6E group production was up just 0.5%. This wasn’t exactly an exciting time for them in terms of this metric.
Things get a lot better when you look at refined 6E production though, with the South African processing assets achieving record milling rates at the base metal refinery. To achieve a 5% increase in this metric after such tepid growth in 6E production is really impressive.
Sales volumes increased by 4.2%. Not bad.
Thankfully, the PGM prices were a much more exciting story in this period. A strong rand couldn’t ruin this party, with sales revenue up by more than 50% on a per ounce basis.
With unit costs per ounce only up by 8%, it’s likely that HEPS has moved beautifully in the right direction. We will have to wait for the release of full financial results to know for sure.
Ghost Bite: In the first half of the financial year, HEPS increased by 5x (from 206 cents per share to 1,035 cents per share). I can’t wait to see what the full year move looks like! But here’s the crazy thing about the mining sector: the share price is actually flat over 12 months:
MC Mining prepares for a milestone quarter (JSE: MCZ)
The Makhado project is making great progress
As all junior miners must do, MC Mining released a quarterly activities report.
This report comes after the news of the CEO stepping down after a long and successful period that included a rare thing in South Africa: the attraction of substantial foreign direct investment. Kinetic Development Group recently became the controlling shareholder in the company. They are making it possible for MC Mining to develop the flagship Makhado steelmaking hard coking coal (HCC) project.
It’s impossible to overstate the importance of this project to MC Mining. Makhado will be the largest HCC project in South Africa, with a life-of-mine of 28 years.
A number of important commissioning milestones were achieved in the latest quarter, but the next quarter is even more important. Performance testing is scheduled for August. If you listen carefully enough, you can almost hear the management team holding their breath!
It’s a very different story at Uitkomst Colliery, where operations are suspended due to cash losses. The company hasn’t made a final decision on the future of Uitkomst, but they have received a binding offer from a potential buyer for the asset. Kinetic Development Group may be funding the Makhado project, but I’m sure it wouldn’t hurt to just get the Uitkomst headache out of the way.
Ghost Bite: The share price is up 38% year-to-date, but it all happened right at the start of the year. Junior mining share prices tend to move based on operational milestones above all else. If testing in August is successful, that would be the likely next catalyst. Of course, if testing is unsuccessful, that would also be a catalyst – just in the wrong direction.
August 2026 will be absolutely critical for Orion Minerals (JSE: ORN)
It’s time for funds to flow from Glencore (JSE: GLN)
Investors in Orion Minerals are desperate for any news on the Glencore prepayment financing arrangement. When we recently hosted the company on Unlock the Stock, most of the Q&A related to getting this deal across the line. Management couldn’t give specifics of course, but this session is still well worth watching:
In addition to releasing a quarterly update, Orion has given the market something to chew on regarding the Glencore arrangement.
The SARB approval is now in place. The intercreditor agreement between Glencore and Triple Flag Precious Metals is in an “advanced form”. Based on my corporate finance experience, I can well imagine how complex that agreement is. Speaking of complicated legals, the offtake agreements with Glencore are also described as being in final form.
These agreements still need to be executed, but Orion expects tranche A of the financing to become unconditional by the end of August 2026. This will trigger the construction of the Uppers at the Prieska Copper Zinc Mine. Tranche B will come later, with Glencore needing to secure non-recourse funding from third parties to make that happen.
The other project in the group is the Okiep Copper Project, where they are busy with the optimisation of the Flat Mines 2025 Definitive Feasibility Study.
To support the group balance sheet, you may recall that Orion completed a capital raise of $15.4 million in June 2026.
Ghost Bite: The best way to think of Orion is to imagine yourself standing at a stove with two pots on the go. Okiep is simmering at the back on low heat, not getting much attention. The Prieska Copper Zinc Mine is in full view of everyone, right on the cusp of boiling over and needing to be carefully managed. But the Prieska pot is also where the tastiest food is being cooked, with hungry (and excited) investors waiting at the table. With the share price up 115% in the past year, there’s already been much activity in anticipation of this dish. All eyes will be on the Glencore money flowing by the end of August.
Results of previous poll:
Nibbles:
Director dealings:
For whatever reason, the CEO of Argent Industrial (JSE: ART) bought and sold roughly 40,000 shares (worth R1.6 million) from 28 to 30 July. There’s no explanation given in the SENS for this strange behaviour.
A non-executive director of Shaftesbury (JSE: SHC) bought shares worth R567k.
When Copper 360 (JSE: CPR) listed, I remember joking about the stock ticker CPR. My hope was that investors in this junior mining asset wouldn’t need to be resuscitated. Alas, with the share price down 88% over 3 years, my joke was horrendously on point. The latest from the company is an update of a technical accounting nature, with a restatement of the results for the year ended February 2026. Things always seem to get worse, with the headline loss per share corrected from -19.46 cents to -27.36 cents. It’s thankfully for non-cash reasons related to the recapitalisation and debt restructuring transaction.
There’s bad news from Wesizwe Platinum (JSE: WEZ), with the Bakubung Platinum Mine suspending operations after a s189 consultation process with employees became heated. Our mining industry’s history of violence around wages and job security remains a far-too-vivid memory. I hope this is resolved as quickly as possible.
Oando (JSE: OAO) caught up on two sets of quarterly results. They released numbers for the three months to March 2026 and the three months to June 2026. In the March quarter, revenue was up by 6%, but profit fell by a nasty 67%. The three months to June was as excellent as I would’ve expected from this energy company during a fuel price spike, with revenue up by roughly 36%. This helped them swing from losses in the comparable quarter to profits in this quarter. There’s almost no liquidity in this stock on the JSE.
After further purchases of shares, Novus (JSE: NVS) now has a direct stake of 50.79% in Mustek (JSE: MST). The indirect stake is 71.08%.
Labat Africa (JSE: LAB) continues to create more questions than answers about its investment case. The latest update is that Alpvest Equities has a 12.6% stake in Labat.
Sebata Holdings (JSE: SEB) has renewed the cautionary announcement related to negotiations with a third party for the potential disposal of certain assets.
African Dawn Capital (JSE: ADW) has been suspended from trading since July 2025. This is because the results for the year ended February 2025 are still outstanding. They are obviously very far behind now, although they expect to catch up on everything by the end of August 2026.
Why European car manufacturers serve as a cautionary tale for Japanese manufactuers of green tea powder
You’ve no doubt seen it: the bright green latte in the hand of the person ahead of you in the queue. Matcha soft-serve, matcha cheesecake, thelimited-edition matcha KitKat. Matcha is everywhere right now. What was once a ceremonial powder whisked in Kyoto tea rooms has become the flavour of the decade.
The global matcha market was wortharound $5.1 billion in 2025 and is forecast to nearly double to $8.9 billion by 2033. Asia Pacific still drinks the lion’s share, but the growth is everywhere: coffee shop menus, dessert counters, supplement aisles, and the feeds of every wellness influencer with a bamboo whisk and a ring light.
Japan, understandably, has been enjoying the moment.
In 2024, the country exported 5,092 tonnes of matcha, up 18.7% on the year before. Export value climbed 25.9% to roughly $185 million. The US, Germany, Malaysia, Thailand and Taiwan led the buying. Demand has run so hot that revered houses like Ippodo and Marukyu Koyamaen havehad to cap sales because Japanese tea production simply couldn’t keep pace.
A shortage, in other words – the good kind of problem, if you’re the only one who can make the stuff. But that’s exactly the kind of assumption that will get Japanese matcha in hot water if they aren’t careful.
Enter the dragon
The twist in this tale is that matcha isn’t originally Japanese at all.
It was born in China, flourished during the Song Dynasty, and only later crossed the sea to Japan, where it was refined into the tea ceremony we now think of as quintessentially Japanese. For centuries, that origin story was a footnote. China let the tradition lapse while Japan made it an art form and, eventually, an export. Then, China decided it wanted the footnote back.
In 2018, matcha production ramped up in China’s Guizhou Province, a high-altitude, mist-wrapped region in the country’s southwest that turns out to be excellently suited to growing the tencha leaves matcha is milled from. The playbook is familiar to anyone who’s watched China enter an industry: invite Japanese experts to share advanced production techniques, build a very large factory, and then switch on mass production.
Tongren, the city at the centre of it all, now calls itself the matcha capital of China and hosts what’s billed as the world’s largest single-site matcha factory.
In 2024, Tongren’s matcha output topped 1,200 tonnes and over 300 million yuan in value. China shattered its own prediction that it would produce 5,000 tonnes of matcha in 2025. The country produced an eye-watering12,000 tonnes instead (according to the 2026 China Matcha Industry Development Report), or around 70% of global output.
And then there’s the detail that should make Japan sit up and pay attention: earlier in 2025, Guizhou matcha achieved its first large-scale export to Japan, competing directly, on Japanese soil, with Japanese matcha.
Chinese matcha isn’t beating Japan’s finest ceremonial grade (at least, not yet). But it doesn’t need to. It only needs to be good enough for the cheesecake, the latte and the KitKat – the vast, hungry middle of the market – at a price Japan can’t touch. And that is what it’s excelling at.
Where have we seen something like this happen before?
A cautionary tale from Chery
“So what?”, I hear you ask. Why does it matter that China is getting better at making matcha?
It matters because once the Chinese set their minds to something, they usually get it done with an efficiency that leaves their competitors in the dust. Take, for example, the Chery story that played out on our own shores in the early 2000s.
If you can’t remember what a Chery QQ looked like, then you’re in good company. Chery’s first attempt at entering the South African car market with their run-of-the-mill compact hatchback was anything but memorable. Those unlucky few who do recall the QQ (perhaps through painful lived experience?) remember it only for its worst features: dismal build quality, patchy after-sales support and non-existent resale value. By 2018, Chery took the hint and packed up their South African operations.
But they didn’t go home – instead, they went to Frankfurt, Germany and set up an advanced European R&D centre. You may be shaking your head in dismay at this point, wondering how the same car brand that bounced off the South African market without leaving a dent could dream of cracking Europe.
But cracking Europe was never the plan. The plan was to go in, observe and learn. Chery’s location in Frankfurt was within reach of some of the world’s most respected automotive engineers and a supply chain famous for its efficiency and precision. All they had to do was watch and take notes.
In late 2021, as the fog of the pandemic started to lift, Chery re-entered South Africa with the velocity of an asteroid. Gone were the hatchbacks; instead, they brought the Chery Tiggo 4 Pro and quickly followed up with the Tiggo 7 Pro and Tiggo 8 Pro. In less than 5 years, they’ve managed to go from market entrant to claiming the 7th position in the top 10 car sales stats in South Africa, holding 4.6% overall market share. For reference, Ford, which has been in the country since 1923, holds 5.4% market share.
Chery and their QQ may have left in disgrace, but they returned with designs that felt less like knock-offs and more like contenders. All of a sudden, those European legacy brands that Chery was looking to as tutors are in real danger of getting knocked off the podium.
China takes the world
The Chery story isn’t a fluke. It’s a template that is playing out across the global car industry at a scale that makes what happened in South Africa look like a warm-up act.
For decades, Chinese automakers learned patiently from their Western joint-venture partners, absorbing everything about how a modern car gets designed and built. Meanwhile, their government committed to an ambitious 20-year plan to develop electric vehicles (perhaps this is the part the West underestimated?) and stuck to it with a discipline that quarterly-earnings capitalism struggles to match.
When the world reopened after the pandemic, Western executives lifted their heads and discovered that the race had already been run. Chinese manufacturers were spinning out new cars on development cycles of 20 to 24 months against the West’s 40 to 50 months, with mature technology reaching showrooms in half the time, at roughly 30% lower materials costand 30% lower capital expenditure.
Watch a Chinese EV brand set up dealerships in Germany today, on the home turf of Mercedes and BMW, and you’re watching the Chery playbook run at continental scale.
Matcha do about nothing?
It’s tempting to file the current matcha craze under “passing wellness fad” – a flavour that’ll fade the way kale chips and cronuts did. And maybe the froth will settle, but that’s not really the point. The point is the pattern.
Chinese matcha in 2026 looks a lot like the Chery QQ of the early 2000s, or the first tentative Chinese EVs a decade ago: not quite there, a little bit cheaper than the original, easy to dismiss. The mistake – the expensive, market-losing mistake – is to keep dismissing it. Because the Chinese approach to any industry it decides to enter is remarkably consistent – learn from the best, build at scale, undercut on price, then return better than anyone expected.
They will keep improving until “good enough for the latte” becomes “good enough, full stop”.
Japan still makes the finest matcha in the world, just as Germany still makes exquisite cars. But with economic pressure squeezing consumers from every side, will that be enough to outrun the waking dragon?
The next time you buy a matcha product, take a proper look at the packaging. There’s a rising chance that the magical green powder inside travelled not from a hillside near Kyoto, but from a misty mountain factory in Guizhou.
The student, it would appear, is becoming the teacher.
About the author: Dominique Olivier
Dominique Olivier uses her love of storytelling and ideation to help brands solve problems.
Her first book, Lessons from Loss, has been published by Penguin Random House.
She is a weekly columnist in Ghost Mail and collaborates with The Finance Ghost on Ghost Mail Weekender, a Sunday publication designed to help you be more interesting.
Artificial intelligence is moving faster than almost anyone expected.
After attending two of the world’s biggest technology conferences in Boston and San Francisco, Investec global equity analysts David Smith and Zane Bezuidenhout unpack what they learned from the executives shaping AI’s future.
From surging demand and infrastructure bottlenecks to agentic AI and the companies best placed to benefit, they explore what investors should be watching next.
This podcast is hosted by Jeremy Maggs. Listen to the full conversation to find out more. Read more on www.investec.com/now
Please scroll down for the transcript if you wish to read instead of listen.
Hosted by seasoned broadcaster, Jeremy Maggs, the No Ordinary Wednesday podcast unpacks the latest economic, business and political news in South Africa, with an all-star cast of investment and wealth managers, economists and financial planners from Investec. Listen in every second Wednesday for an in-depth look at what’s moving markets, shaping the economy, and changing the game for your wallet and your business.
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00:00 – Introduction Jeremy: Everyone these days seems to have an opinion on artificial intelligence. Some believe we’re in another technology bubble. Others think we’re only at the beginning of one of the biggest investment cycles in decades.
So, to separate the hype from reality, two of Investec’s global equity analysts have just returned from Boston and San Francisco, where they attended some of the industry’s biggest conferences: J.P. Morgan’s Global Technology, Media and Communications Conference, and Bank of America’s C-Suite Technology, Media and Telecom Conference.
They spent several days speaking to executives from many of the world’s largest technology companies about where AI is going. So, what did they learn?
Hello, I’m Jeremy Maggs, and you’re listening to No Ordinary Wednesday, an Investec Focus Radio podcast that tracks the macro moves shaping our world today.
Joining me from London are Investec global equity analysts David Smith and Zane Bezuidenhout. Gentlemen, welcome back to the program.
01:01 – AI investment opportunity bigger than ever Jeremy: All right, David, when you and Zane joined me on the podcast, if memory serves, last October, you argued that AI still had a long runway as an investment theme. So having spent some time now with some of the world’s biggest technology companies, as I referenced at the start of this interview, I’m wondering if anything has changed. Is demand for AI still as strong as you expected?
David: Jeremy, to answer your second question first, it absolutely is as strong, if not stronger, than we had expected in October. The opportunity is bigger, and it’s coming way quicker than we expected. Google, for example, has just reported 82% growth in its cloud division last night. This was largely driven by the demand for AI products.
Anthropic, which has been in the news a lot recently, is looking at a $70 to $75 billion recurring revenue run rate at the moment. I’ll give you context, when we spoke in October last year, it was about $5 billion. Four years ago, they didn’t make a single cent in revenue. The pace of acceleration has been quite extraordinary.
02:07: Scale of demand has outstripped supply Jeremy: So Zane, to you now. If demand isn’t necessarily the issue as far as this is concerned, then I’m wondering what is. We hear a lot about shortages of advanced semiconductors, for instance, but it would sound as though building the infrastructure to support AI has become a lot more technical, a more complex challenge. What’s your reading of the environment?
Zane: Absolutely. From the conference in San Francisco, I think there was a common thread through all the executives that presented, was that given that, as David alluded, that demand’s got out of the starting blocks at a rapid pace, the supply chain, maybe once bitten and twice shy from past boom-bust cycles, was a lot more skeptical and cautious and has now been convinced that AI demand is real.
But there is a great degree of catch-up that is needed from the supply chain, whether that’s across the advanced chips, memory chips, the networking side which is connecting the chips, and then, you know, demand keeps on moving. And the big impulse late last year, early this year, has been agentic AI, which we’ll get into.
And this was all never mind the constraints around power and energy that is needed to fuel this demand growth. So definitely the scale of demand has outstripped supply, and supply needs to scale rapidly, and the complexity of it is ever-increasing.
3:30: What is Agentic AI? Jeremy: So David, let’s pick up on that. So much new terminology these days. Agentic AI is obviously the new buzzword. For those of us who are still getting our heads around the term, maybe just tell us what it is and why the industry is so excited about its potential.
David: The best way to think of it is as an online employee. In your personal capacity, the best way to frame it is probably think about someone like Jeff Bezos or Elon Musk, who’s a multi-billionaire.
They will employ 10 to 20 people to run their lives behind the scenes, from their finances, to their health, to their diaries, organizing household chores, food.
In 5 to 10 years, if we are right in our view in how agentic AI play happens, we think everyone will have access to the same opportunities to have someone run those chores for you, just this will be done with AI rather than people and will cost a lot less.
In a work capacity, it’s an employee that you can ask to do a task for you that never sleeps. You will need to manage them, of course. You’ll need to direct them and check them and make sure the output’s what you wanted.
But each person is probably going to have the opportunity to have a veritable army of digital employees working for them, and you will be the manager of those employees.
04:44: When will agentic AI be truly embedded in our lives? Jeremy: So when do you think this capability is really going to start to kick off? We really are on sort of the slope period right now. A long way to climb?
David: Yeah, you’re spot on. So, we met with the CFO of OpenAI fairly recently, and her view was they think it’s going to happen soon. We’re talking six to 12 months for use cases that are genuinely value-adding and potentially can act on your behalf.
My expectation is that definitely in two to three years, we will have a meaningful step-up in the value that agents can provide, and it’s going to be fairly broad-based in terms of adoption. So somewhere between six months and three years would be my best guess. Hopefully sooner rather than later.
05:27: The rise of “intelligence per dollar” and “token optimization” Jeremy: Zane, a year or so ago, I think it was all about building bigger and more powerful models, and that’s fairly understandable. But people are now talking about “intelligence per dollar”. What does that tell us about where the industry is heading? Intelligence per dollar. Rolls off the tongue nicely.
Zane: Yes, this industry’s full of a lot of the unique acronyms and phrases, but yeah, it’s basically a way of saying, “Are you getting bang for your buck in terms of AI compute?”
And I think for us it’s a very rational and healthy signal that people are now focusing on this, what’s also called “token optimization”, as opposed to previously we’ve been in a period of what was called “token maxing”. And I think token maxing is just where people were encouraged to go and spend as much as they can in terms of their IT budget on input tokens. That’s queries or prompts, and then what you receive back from these large language models being output tokens.
And I think it’s a signal that we are shifting from experimentation, playing with this. I think it shows that enterprises have identified use cases, and now it’s around optimisation in terms of making sure that these tokens and the cost associated with it is directed in the right direction.
I mean, it pretty much means you don’t need a powerful foundational model for every query. It’s that ability to flex between low-cost models or free models for maybe trivial queries or prompts, and then you use the powerful models when, you know, super intelligence is ultimately required. So for me it’s a very healthy signal that we are making that transition from experimentation to implementation ultimately.
07:07: Are companies starting to see returns on their AI investments? Jeremy: David, let me circle back to that bang for your buck then. For the past two years or so, we’ve heard about the enormous sums being invested in artificial intelligence. So to push on a little further from what Zane was saying, do you think companies are now starting to see measurable returns, or is this still very much an investment story?
David: We are seeing genuine returns. Obviously, it’s been particularly amazing for the infrastructure layer, which have been direct beneficiaries of all the spend. But the cloud providers, those who are spending a lot of the money, are seeing an acceleration of demand from their clients.
They’re not able to keep up with demand, that is consistent, and that wouldn’t be happening if their clients weren’t seeing value for money in using the cloud service providers.
So, we obviously have particular use cases where it’s very easy to see value, right? So you’ve see massive upside to people who want to code. The effectiveness of online advertisers, like Google or Meta, has exploded in terms of what they can extract from on a revenue basis. Customer service – business lines have changed fundamentally. The chances of you speaking to a person is quite small on your first call into anywhere.
And we are starting to see operational businesses, things like you need to go check this bit because it’s on security or compliance or legal. Those bits of the businesses are being impacted, and quite rapidly.
08:26: For investors, what distinguishes the winners in the AI race? Jeremy: So, Zane, if companies then are beginning to see real returns, as David has alluded to, what do you think is going to separate then the long-term winners in AI from the rest? And maybe more importantly, how should investors be thinking about that?
Zane: Yeah, so a framework that has helped us, you know, in terms of our analysis and thinking for the long term is we ideally are looking for companies that can be the bridge between the infrastructure layer, that’s the compute, and basically the end use, which is workflows or even personal use.
So, some examples with that could be in enterprise software, e-commerce, payment providers. So we’re looking for these companies that can serve as a bridge. But being a bridge isn’t enough on its own, and a way that we look at it is, I think in a fast-changing environment, I think customers, whether they’re enterprise or, you know, small-medium businesses, are looking for almost one-stop shops in the provision of these services.
So we would call those platform companies, where they have a portfolio of products which they can essentially wrap around their customer. And ideally, I guess a holy grail would be companies that have a degree of control over their ecosystem or a degree of network effect. So this is the interplay between developers on their platform as well as the end customers.
It almost becomes a network of systems providers. And an example of this is, you know, which we favour, is a company like Microsoft as an example of a company with strong ecosystem control.
10:00: Continuity announcement: Investec Global Leaders Portfolio Jeremy: On Investec Focus Radio, you’re listening to No Ordinary Wednesday. Today, Investing in AI’s Next Chapter. My guests are Investec global equity analysts David Smith and Zane Bezuidenhout. Gentlemen, hold all those thoughts. We’ll be back to the conversation in just a moment.
Many of the technology companies mentioned today feature in the Investec Global Leaders Portfolio. The portfolio invests in 30-50 high conviction, global quality growth companies with enduring competitive advantages, taking a long-term approach to capital growth. To find out more, visit investec.com.
The Global Leaders portfolio invests exclusively in equities and carries a high degree of risk. The value of investments can go down as well as up, and investors may get back less than they invested. Past performance is not a reliable indicator of future results.
10:54: Is China closing in on the US when it comes to AI prowess? And welcome back. This is No Ordinary Wednesday. Now, David, one topic that’s impossible to ignore is China. So is the AI race still America’s to lose, or are Chinese technology companies, do you think, beginning to close the gap?
David: We think the USA is likely to stay ahead on leading models, but China has some big advantages, and that’s generally around access to energy.
They don’t suffer from the term of NIMBY, which is “Not In My Backyard”, which is playing out in a lot of the developed markets, in the US and Europe in particular. They have a lot of government support, and they don’t have the same level of guardrails or regulation that’s starting to show its head in other parts of the AI world.
11:36: Increased regulation on the horizon Jeremy: So Zane, back to you. And last week, OpenAI disclosing that one of its autonomous AI agents independently hacked into another company’s systems during testing. So, incidents like this would obviously increase the likelihood of tighter regulation. What do you think that might mean then for the pace of AI innovation?
Zane: A very scary incident, and ultimately already demonstrates a pace at which these large language models are developing. And directionally, which I think is probably consensus, is that regulation is naturally going to increase. That being said, we’re of the view that given the speed and change of innovation, that typically regulation follows innovation.
But we do view it as a necessary step to safeguard use and provide the necessary guardrails that will ultimately help long-term adoption of artificial intelligence.
12:28: AI opportunities beyond the Mag 7 Jeremy: David, let’s get back to the investment case. When most people think about AI investing, they immediately think of Nvidia, of Microsoft, or Alphabet.
After everything that you’ve seen on this trip to the United States, do you think the opportunity is beginning to broaden beyond the Magnificent Seven?
David: It’s been interesting, ’cause the best opportunity this year has by far been in the bottlenecks in the AI data centre build-out. Think of things such as memory players or fibre optics. They have absolutely rallied. They’ve had a stormer of a year, where the big large names that you’ve mentioned have actually had a pedestrian year would be quite generous. They’ve actually had a pretty bad year so far.
So with that, we think that where we stand today, and because of valuation, which we want, the best risk-adjusted return, and that doesn’t mean you’re going to have the best share price, but the best when you adjust for risk, we think sits with the large players who have what Zane referred to as having control over an ecosystem and having a platform or an ecosystem effect. So, we actually really like those large names. We think that investors will be very well rewarded to own them over a long period of time.
But, I have to say that on a slightly longer-term time horizon, we think that robotics or physical AI is likely to be the major opportunity in a few years’ time. It’s just probably not there yet.
13:49: What could derail the AI investment story Jeremy: Zane, a little earlier you were talking about, uh, regulation. So- Beyond cybersecurity risks and tighter regulatory environment, maybe a view on what you see the biggest threats to the AI investment story are right now.
Zane: Gosh, there are quite a few curve balls that have potential, and I think that’s where you see investor behaviour be quite skittish in markets, which is natural given, you know, this is a new and fast-developing technology.
From the demand side, I’d say a key risk is the rate of improvement from the large language models, whether that’s out of the US and China, whether there is a diminishing return to the improvements in these models. That could be a potential risk.
On the supply side, and you know, Dave alluded to the rollout of data centres where there’s obviously the unpopularity of having these data centres built in people’s, you know, call it backyards, as it were.
And a very realistic constraint in the short term is around power supply, energy supply, which is linked to the unpopular view with a lot of consumers potentially experiencing high electricity bills off the increased electricity demand.
Another area, you know, and kind of delves into our space of capital markets is around access to capital and the behaviour of investors in the market. It’s something we always keep an eye on, whether we see irrational behaviour rearing its head within the public market space.
15:16: One message for investors Jeremy: And David, finally to you, there’s no doubt that both you and Zane have come back from this visit with a head full of information. But if there’s one message that maybe investors should take away from this fact-finding trip, uh, what would it be?
David: That we are very, very early in the AI cycle. There’s a massive runway for the entire ecosystem to benefit, and this is probably the most transformative technology we are going to be exposed to in our lives. So we don’t think it’s one or two years, we think this could be decades’ worth of growth.
15:57: Outro Jeremy: And that’s where we are going to leave it. To both of you, thank you very much indeed, and we look forward to welcoming you back soon, whether in person or via your agentic counterparts.
Now, before we go, just a quick favour. Thousands of people listen to Investec Focus Radio every month, but many haven’t hit the follow button. So, if you enjoy these conversations, please follow Investec Focus Radio on Spotify, Apple Podcasts, or YouTube podcasts. It’s the easiest way to make sure that you don’t miss an episode. Until next time, goodbye.
Disclaimer: The views expressed are those of the contributors at the time of publication and do not necessarily represent the views of the firm and should not be taken as advice or recommendations. Investec Limited and subsidiaries, authorised financial service providers, registered credit providers, and long-term insurer.
At Anglo American, the De Beers story continues to fascinate me
ArcelorMittal is “fundamentally different” – but when will the profits come?
Gemfields is being carried by emeralds
Mondi suffers an ugly drop in margins
At Anglo American, the De Beers story continues to fascinate me (JSE: AGL)
Anglo American has released results for the six months to June 2026. As you are probably aware, the company is in an important transition phase in which they are selling off some major assets.
The steelmaking coal deal is being implemented, with a price of up to $3.9 billion on the table (of which $2.2 billion is payable upfront).
The De Beers sale has been in the headlines, with speculation that the company is in talks to sell the business for $1 billion. I would encourage you to only believe numbers that are officially announced by the company. I must also remind you that such a sale is by no means guaranteed at any price.
There’s also a nickel disposal in the works, with the deal currently going through European competition authority approval processes.
And on top of all this, Anglo American is also busy with the planned merger with Teck to create a “global metals and minerals champion”!
With so much change in the business, Anglo is encouraging shareholders to work with underlying EBITDA from continuing operations. Helpfully, this metric happens to be up 35% for the six months to June 2026. An important and less-than-obvious nuance is that continuing operations actually includes De Beers, making this a more reasonable metric than you might think.
We won’t talk about the loss attributable to equity shareholders of $0.9 billion (driven by impairments), although it’s less ugly than the loss of $1.9 billion in the comparable period.
On the plus side, free cash flow was $803 million – a significant jump from $322 million in the prior period. The interim dividend has also moved much higher, from $0.07 per share to $0.23 per share. It’s still an absolutely tiny dividend yield on a share price of around R850!
If we look deeper, copper production was flat year-on-year, premium iron ore was down 2% and manganese ore increased 52%. Diamonds – those “rare” shiny things from the earth – saw production increase by 46%.
The pain in De Beers is best explained by this EBITDA table:
Yes, that’s a loss of $113 million at De Beers in the space of just six months. It’s better than the prior period thanks to the higher production, but that’s not saying much. If that rumoured $1 billion is true, I would take it and run.
Here’s the official wording from the financial report on the diamond market:
“At the retail level, global sales of finished diamond jewellery were stable year-on-year. There were encouraging consumer demand signals in the United States, where natural diamond jewellery sales returned to growth among independent jewellers. Demand in India remained robust, however demand overall in mainland China continued to decline.”
To be fair, they also say this:
“De Beers continued to progress its Origins strategy in the first half of 2026, with a particular focus on revitalising consumer desire for natural diamonds and streamlining the Group to manage the cost base. Following the encouraging performance of the Desert diamonds marketing campaign in late 2025, which seeks to promote natural diamonds across a range of colour hues, De Beers expanded the concept, with a new campaign focused on bridal, with a range of classic ‘icon’ designs set to launch in the second half.”
Ghost Bite: In a world where people can barely afford to have kids or buy a home, I don’t think natural diamonds will ever return to previous glory among mainstream buyers. It just is what it is.
ArcelorMittal is “fundamentally different” – but when will the profits come? (JSE: ACL)
The underlying EBITDA story is encouraging
ArcelorMittal has released results for the six months to June 2026. They start with a rather strong statement: “ArcelorMittal South Africa today is fundamentally different from eighteen months ago.”
That may be true, but they also just reported a loss of R1.49 billion vs. a loss of R1 billion a year ago. The numbers aren’t exactly matching that narrative, are they?
Of course, you have to stop dropping in order to start growing. Have they bottomed out, with management focusing on resizing the business and getting out of severely loss-making operations?
On a like-for-like basis, steel production was down 5%. Revenue fell by 1.4% on a similar basis. If you don’t make the like-for-like adjustments by the way, revenue was down 30%! This is why they can say things like “fundamentally different” – but it is fundamentally better?
Perhaps it is. This is where you have to be very careful, as quarterly momentum is critical in a turnaround. They are still loss-making, but losses are diminishing quickly. In Q3’25, underlying EBITDA (excluding the Long steel business) was a loss of over R1 billion. In Q2’26, it was a loss of only R67 million!
Despite some encouraging underlying momentum, the free cash outflow for the six months was almost R1.2 billion. This is why net borrowings increased from R5.8 billion to R7.9 billion between December 2025 and June 2026.
Looking ahead, one of the positives is the restart of smelting activities in the ferrochrome industry. This should boost commercial market coke sales in the second half of 2026 (of the non-fizzy drink variety). But what would really do wonders here is a return to positive EBITDA…
Ghost Bite: The 52-week low on this stock is R0.85 and the 52-week high is R1.88. The current level of R1.26 is pretty much smack in the middle. This remains a highly speculative stock, although range traders might find this chart interesting:
Gemfields is being carried by emeralds (JSE: GML)
Will the rubies play ball later this year?
Gemfields is a stock in distress. The share price has shed 47% year-to-date. If you can believe it, this is after a significant bounce from the 52-week low.
This business model has layers of risks. They have to deal with the variability of Mother Nature, as gemstones come out in all shapes and sizes (and thus grades). They also have to navigate the trials and tribulations of operating in Africa, ranging from fights with governments through to actual conflict on the ground.
To try and navigate this dangerous cocktail, the company has some (but not much) diversification. They mine rubies in Mozambique and emeralds in Zambia.
Mozambique has been a significant challenge recently. Recoveries of premium grade rubies have been weak. The benefit of the second processing plant will only be felt in months to come, as it will be fully commissioned later this year. In the meantime, the share price is as red as the rubies themselves.
In the green corner, we find a happier story in Zambia. Emerald production was strong during the first half, although they’ve had pressure on operating costs from increased mining activities and fuel costs.
Overall, total auction revenues were $102.9 million for the first half of the year, up from $60 million in the comparable period. The emeralds are no doubt doing the heavy lifting here. The net debt position of $44.2 million (before auction receivables of $33.3 million) remains a significant worry for investors.
Aah yes, I forgot to mention this particular layer of the risk cake: Gemfields carries a lot of debt.
Ghost Bite: The combination of operating leverage, financial leverage and political risk has had predictably unfortunate outcomes.
Mondi suffers an ugly drop in margins (JSE: MNP)
But clearly better than the market expected, with the share price up 12% on the day!
Mondi’s share price has been swirling the depths of the toilet since October last year.
The numbers for the six months to June 2026 aren’t a favourable story by any means, but they must’ve been better than the market had feared. That’s the only explanation for a 12% share price increase in response to news of HEPS dropping by 85%!
The broader paper and packaging sector is a cyclical affair that tests even the strongest stomachs. The debate at the moment is whether there’s a structural decline in addition to cyclical pressures. Areas like graphic paper (a focus at Sappi (JSE: SAP)) have been terrible, as the world has shunned printed magazines. But even Mondi, with an arguably better mix of products (a tilt towards packaging), has suffered the same fate over the past few years:
Looking at the Mondi numbers specifically, the results for the six months to June 2026 include a 2% increase in revenue. That sounds fine until you look at the profit margins. Underlying EBITDA (excluding forestry fair value movements) fell by 24%. Once you include the forestry movements as well (as Mondi must revalue its plantations), you’ll find that underlying EBITDA tanked by 33%.
This means that underlying EBITDA margin fell from 14.4% to 9.5%. Ouch.
If you’re hoping that the cash picture is more favourable, then I have bad news for you. Cash generated from operations fell by 17% to €347 million. They are clearly still profitable, but the direction of travel isn’t good.
The pain was felt primarily in the Corrugated Packaging segment, where underlying EBITDA margin literally halved from 15.0% to 7.5%. Return on capital employed was just 0.9% vs. 6.6% in the comparable period. The combination of higher input costs and lower average selling prices isn’t fun.
Flexible Packaging was far more resilient. Sure, there was a slight decline in revenue and a decline in EBITDA margin from 14.8% to 12.4%, but that is far more palatable than what we’ve seen in Corrugated Packaging. Return on capital employed was 8.7%, down from 11.5% in the comparable period.
Given the precipitous decline in EBITDA, it makes sense that net debt to underlying EBITDA has jumped from 2.5x to 3.2x. To give the balance sheet some breathing room, expected capex for 2026 has dipped from €550 million to €500 million.
With HEPS down 85%, some of the blow to investors was cushioned by the dividend decreasing by “only” 60%.
It’s worth mentioning the geographical exposure, as Mondi is primarily a European business. They generated 39% of revenue in Western Europe, 44% in Emerging Europe and less than 8% in Africa. In fact, North America generated slightly more than Africa! The European exposure isn’t fantastic for a consumer-focused value chain. The region isn’t exactly famous for growth.
Ghost Bite: There are certain sectors of the market that I just don’t play in. This is one of them.
I’m trying something new for this earnings season. Instead of delivering one absolute monster of a Ghost Bites each day, I want to try break them up into more manageable servings. In this edition, I’ve grouped together all the consumer stock updates from 30th July(along with some nibbles).
In this edition of Ghost Bites:
AB InBev has been lucrative for investors this year
AVI: thank goodness for the fish
British American Tobacco’s first half performance met expectations
Woolworths: even business class shoppers have taken a knock
AB InBev has been lucrative for investors this year (JSE: ANH)
Drinking patterns have shifted, but there are still growth engines here
The pandemic legacy lives on: AB InBev’s best international growth story remains the Corona brand, up 17% in the second quarter. When you consider that the rest of the “megabrands” could only manage 6.2%, it really is incredible to see the multi-year impact of a pandemic emerging with the same name as a beer.
People are still ordering things that look like beers and quack like beers, but aren’t in fact beers. No-alcohol beer sales were up 27% in the second quarter, while “Beyond Beer” (the ESG consultants have been here) increased by 44% in the second quarter.
If you’re keen to understand more about the alcohol sector and the recent stats around Gen Z consumers, then check out this 5-minute excerpt from a recent Magic Markets podcast with the team from Aylett & Co:
Looking at the bigger picture, group revenue was up 5.6% in the second quarter, driven by price growth of 4.2% and volumes growth of 0.9%. Normalised EBITDA increased by 5.8%, with margins expanding by 4 basis points to 35.6%.
For the six months, revenue climbed by 5.7% and normalised EBITDA was up 5.6%. Over that period, margin contracted by 5 basis points to 35.6%.
Underlying earnings per share increased by a substantial 23.4% for the second quarter. It was up 22.1% for the first half of the year. And get this: HEPS jumped by 65%!
This immediately tells you that there’s a lot of leverage sitting below the EBITDA line. Sure enough, net debt to EBITDA is sitting at 2.86x. That’s a healthy balance sheet, but certainly not a low-risk one. At least this is considerably lower than the 3.27x we saw in June 2025.
For the full year, they expect EBITDA to grow in line with the medium-term outlook of between 4% and 8%.
Ghost Bite: The share price is up 31% year-to-date. At a time when most consumer stocks have been on fire, AB InBev has been a safe place for investors. Punters will happily drink to that.
AVI: thank goodness for the fish (JSE: AVI)
It wasn’t a happy finish to the year for this FMCG group
AVI brings us more data points from the consumer economy. They’ve released a voluntary trading statement for the year ended June 2026, and with the exception of the fish, I’m afraid that there isn’t much good news here.
AVI’s final quarter challenges were less about the conflict in Iran and more about distributors and wholesale customers holding back out of fear for the 30 June national protest action. That’s interesting, but the numbers here suggest that general consumer affordability played a big role in the second half.
Revenue for the full year was up by just 1.4%, a very different story to the 4.9% growth achieved in the first half. The silver lining is that AVI has pulled off the usual trick of turning water into wine, with selling and administrative expenses down by 3.2%. This does wonders for operating profit margin.
The Food & Beverage segment is the one to watch, as this contributes 84% of group revenue. After growing by 6.0% in the first half, it’s a pretty bleak outcome to see that they finished at 1.7% for the year.
Entyce Beverages also struggled, with growth of 4.5% at the halfway mark being obliterated by a weak second half. Growth declined by 2.5% for the year, so that’s a really ugly swing thanks to aggressive competition in the creamer category. This is the one area where AVI has been unable to protect operating profit margin due to pressure on selling prices.
Snackworks increased 5.9% in the first half and only 1.9% for the full year. Biscuits did well, but the maize and potato snack categories suffered lower profits. Still, margins were up.
I&J bucked the trend in more ways than one. It was by far the best growth story, up 10.2% for the year. It also saw improved momentum over the period, as growth at the halfway mark was 9.4%. But even on this rainbow, we find a blemish in the form of the abalone business and ongoing challenges in profitability. As is so often the case, a basic hake and chips is best.
We then reach the businesses that AVI really shouldn’t still own.
The first is Footwear & Apparel, where growth of 3.4% in the first half moderated to 2.1% for the full year. Supply chain issues have improved vs. the prior year. The costs of closing Green Cross in the prior year didn’t recur in this period. Footwear sales were impacted by what AVI describes as “widespread deep discounting by big-box apparel retailers”. In other words: competition is rough out there.
Finally, we get to Personal Care, the smallest segment and also the worst strategic fit in the group. Sales fell by 7.2% in the first half of the year. For the full year, they were down 5.1% – this means that the second half wasn’t as bad as the first half. The body spray market is the primary focus here. Apparently, smelling decent by 10am in the morning is a very competitive space as well.
Chuck this all in the pot with the added spice of a decrease in net finance costs for the year (thanks to lower borrowings) and you’ll arrive at an expected HEPS increase of between 4% and 6% for the year. This is despite the number of shares in issue increasing by 0.6% due to incentive programmes.
Ghost Bite: AVI’s share price is down 14.6% year-to-date. The current share price of R90.11 is very close to the 52-week low of R88.97.
British American Tobacco’s first half performance met expectations (JSE: BTI)
They believe they are on track for full-year guidance
British American Tobacco, the company with the most creative ESG team in the world, has met expectations for the first half of the year and feels confident about the full year. Their so-called “Smokeless products” are almost a fifth of group revenue these days!
They also have a segment called Modern Oral. As you are no doubt wondering, this includes products like Velo Plus.
Thankfully for our species, this company remains a low-single digit growth story. The idea is to then eke out some margin gains and plow cash into share buybacks.
Revenue was up 1.4% as reported, or 2.9% in constant currency. The US led the way with 8.5% growth, possibly as a coping mechanism based on their political climate.
Reported profit from operations fell by 15.8%, but that’s because of a credit in the prior year related to the Canadian settlement provision. Adjusted profit from operations was up 3.5%, with adjusted margin up 30 basis points at 43.7%.
Reported diluted earnings per share fell 28.6%. On an adjusted basis, it was up 7.9%. This takes their adjusted margin towards the middle of the 5% to 8% guidance range.
Ghost Bite: The total return over the past year is 12.1%. AB InBev (JSE: ANH) – covered above – has delivered 34%. Before you assume that all sinvestors should be reaching for the beer, the situation looks very different over 3 years or 5 years.
Woolworths: even business class shoppers have taken a knock (JSE: WHL)
The conflict in Iran has made this a very dark winter in the clothing sector
In case you were wondering, even Woolies shoppers have been feeling the impact of higher fuel costs. In a trading update for the 52 weeks to 28 June, the company noted that the second half of the year was a “more challenging” operating environment. No kidding!
After turnover and concession sales were up 5.4% in the first half of the year, Woolworths could only manage 3.3% in the second half. This gives them a full-year growth number of 4.3% as reported, or 4.8% in constant currency.
Woolworths South Africa’s slowdown is evident, with growth of 6.8% in the first half vs. 4.1% in the second half. They don’t give a specific number for the fourth quarter, but they do use the words “particular weakness” to describe it. Yikes.
In Woolworths Food, the first half’s 7.0% growth in turnover and concession sales was followed by just 4.4% in the second half. For the full year, growth was 5.7%. On a comparable store basis, they achieved 3.7% for the year (vs. 5.2% in the first half). These are very decent numbers under the circumstances.
Price movement in Woolworths Food was 4.7% for the period (or 3.9% excluding meat). It’s incredible to contrast this to the price deflationary environment at a retailer like Boxer (JSE: BOX), where trolleys are full of staples based on rice and maize. That organic Woolworths ready-to-eat meal knows how to whack your wallet.
Woolies on-demand grew by 19.6%. The online channel now contributes 7.3% to SA Food sales. With most people still wanting to walk around a store while deciding whether to get the economy or business class sourdough, Woolworths responded by growing net trading space by 2.5% on a weighted basis.
Woolworths Fashion, Beauty and Home (FBH) grew turnover and concession sales by 6.2% in the first half, but this plummeted to just 2.6% in the second half. We all need to eat, but we don’t all need new bathroom towels. After comparable store sales were up by a promising 6.4% in the first half, they finished the year at 4.0%.
Gross profit margins in the clothing sector are in serious trouble. Not only was the fourth quarter a particularly rough period, but it also represented the changing of the season. Woolworths has flagged the gross profit margin risks and the need to clear inventory.
At least Home (up 11.7%) and Beauty (up 7.9%) were bright spots. Perhaps we do in fact need new bathroom towels? Just not a gown to wear after that warm shower.
Net trading space declined by 0.7% relative to the prior period, continuing the recent trend that we’ve seen. Online sales contributed 6.3% to total sales. Interestingly, the online sales contribution was down slightly, suggesting some maturity in the penetration rate of online vs. in-store sales.
Here’s another thing to worry about: the Woolworths Financial Services book. It grew by 5.6% year-on-year (slightly ahead of total turnover), but the underlying credit quality took a knock in this macroeconomic environment. The annualised impairment rate increased from 6.1% to 7.0%.
Of course, with gross margin on full-price sales in FBH running at 60% or more, they can lose 7% of the credit book and still be much better off than if they chased those credit sales away.
We now have to deal with the Country Road Group (CRG), which includes the Politix brand that I’ve recently found to be rather excellent. I can almost hear my wife cringing at the thought of me offering fashion advice, but go check it out!
After a promising first half in which CRG sales were up by 2.3% overall and 2.5% on a comparable store basis, the war in Iran quickly dashed any hopes of success in the notorious Australian (and New Zealand) market. Sales in the second half fell by 0.5%, so they ended the year with 1.0% total sales growth and 1.6% on a comparable store basis.
The highlight here is that gross margin increased year-on-year, as they chose to protect margin rather than chase sales at all costs. Notably, Politix was well up on the prior period (#NotFashionAdvice).
Bringing it all together, Woolworths’ adjusted HEPS is expected to increase by between 1.0% and 6.0%. That’s actually a lot better than the interim period’s growth of 0.7%. It’s worth noting that the second half benefitted from share buybacks in the comparable period.
Results are due for release on 2 September 2026. They will make for very interesting reading!
Ghost Bite: We’ve now seen very difficult recent numbers from Cashbuild (JSE: CSB), Mr Price (JSE: MRP) and Woolworths. That covers almost the full LSM spectrum in discretionary consumer spending. TL;DR: it’s not pretty out there.
Supplement these learnings with my latest YouTube video on Boxer and Vodacom:
Nibbles:
Director dealings:
An entity linked to the CEO of Salungano Group (JSE: SLG) has bought shares in the company worth R6.6 million.
Reinet Investments (JSE: RNI) has completed its share buyback programme, having repurchased R1.12 billion in shares. This barely makes any dent at all in their cash balance. The question everyone is asking is: what will they do with the rest of their dragon-worthy pile of treasure?
Pepkor (JSE: PPH) has moved quickly to squash rumours about a potential personal banking tie-up with Standard Bank (JSE: SBK). The Business Day published an article along these lines, which Pepkor has rebutted strongly. I would hope so – my investment thesis at Pepkor is based on them building a bank on brand new infrastructure that synergises with the rest of their credit offering.
Southern Palladium (JSE: SDL) has released a quarterly activities report for June 2026. This is still a mining exploration company, so they are all about assumptions and forecasts at the moment. The major push right now is to achieve the final granting of a mining right for the Bengwenyama PGM Project. The fact that the major subsidiary is called Miracle Upon Miracle Investments gives you a strong indication of how much faith is required by those operating in this sector.
Mantengu (JSE: MTU) announced that the purchaser of the iron beneficiation plant, Numbers Management (Pty) Ltd, has declined to disclose beneficial ownership information. They say that this is for safety reasons.
Sebata Holdings (JSE: SEB) is going to miss the 31 July 2026 deadline for the release of the annual report for the year ended March 2026. They expect to be ready by 14 August 2026.
Hammerson is to acquire a 50% interest in the Manchester Arndale shopping centre from Palma Arndale BidCo in a transaction valued at £218 million, representing a topped-up NIY of 7.8%. To part-fund the acquisition Hammerson will raise up to 10% of its exiting issue share capital (c.£190 million). The equity raise will be via a non-pre-emptive placing to institutional investors, a retail offer and a subscription of new shares by certain directors of the company.
Anglo American is in discussion with the Global Diamond Consortium to sell its 85% stake in De Beers for c.$1 billion. This potential sale reflects a substantial drop in the worth of De Beers which was valued at US$13 billion when Anglo took full control in 2011, and over $18 billion in 2001.
Kibo Energy is in early-stage discussions regarding an alternative transaction following the failed proposed reverse takeover announced earlier in July. Following failed discussions, the company has cancelled trading of its shares on AIM and in currently in discussions with the JSE in respect of the company’s secondary listing on the exchange.
Unlisted Companies
Aleyo Growth Fund I’s education investment platform, Footprints Education Group (FEG), has acquired a 24% stake in Penflex, a South African manufacturer of plastic products. The stake was acquired from Legacy Africa Capital Partners which bought a controlling 60% stake in Penflex in 2021. Alongside FEG’s acquisition, Penflex’s management has lifted its stake from 11% to 51%. Legacy retains 25%. Penflex focuses on recycled materials, manufacturing stationery, plastic homeware, office products and window blind components.
Hammerson has raised £189 million (c.10% of its exiting issue share capital) to part fund the proposed acquisition of a 50% stake in Manchester Arndale shopping centre. Hammerson will pay £218 million for the centre’s acquisition. A total of 52,098,942 shares were placed at a price of 355 pence (R78.81) per placing share, representing a discount of 3.8% to the closing price on 29 July 2026. The equity raise was achieved via a non-pre-emptive placing to institutional investors, a retail offer and a subscription of new shares by certain directors of the company.
Europa Metals aims to raise A$4 million through the issue of ordinary shares at an issue price of A$0.20 per share with one attaching option (with an exercise price of A$0.30 expiring three years from issue) for every 4 shares issued. The capital raise will be used to fund the company’s proposed acquisition of Antimony Ventures Europe, announced in June 2026.
Novus has acquired an additional 34 Mustek shares at an average R15.00 per share on the open market (outside of the Mandatory Offer) for R510. The company now holds 29,16 million Mustek shares constituting 50.68% of the issued shares in Mustek. Together with concert parties this shareholding increases to c.70.97%.
Acsion shareholders have the option to receive a script alternative in lieu of the cash dividend of 24 cents per share announced by the company in terms of the annual financial results for the year ended 28 February 2026.
With conditions of the proposed reverse takeover of Kibo Energy not being satisfied, the company this week cancelled its trading on AIM. Kibo is engaging with the JSE in respect of its listing on the exchange, the outcome of which will be communicated to shareholders in due course.
This week the following companies announced the repurchase of shares:
Reinet Investments has completed the share buyback programme announced in June. The company intends to purchase its ordinary shares at market value for an aggregate maximum amount of €500 million subject to a maximum of 16.5 million ordinary shares over a period up to the 2027 Annual General Meeting of the Company. The implementation will be through several successive and separate programmes and shares will not be cancelled. This week Reinet acquired 877,546 shares on the JSE for an aggregate R389 million.
To reduce the share capital of the company and return capital to shareholders, Quilter commenced, in March 2026, a £100 million share buyback programme. The maximum aggregate purchase price payable by the company under Tranche 2 is up to C.£30 million. During the period 20 to 24 July 2026, Quilter repurchased 75,000 shares on the LSE with an aggregate value of £148,492 and 15,000 shares on the JSE with an aggregate value of R656,817.
In June, Greencoat Renewables announced its intention to commence a second tranche of the repurchase programme which will return a further €25 million of capital to shareholders, following the completion of the first tranche which is expected during July. The second tranche repurchase will be complete by end-December 2026. This week 1,503,735 shares were repurchased for an aggregate €1,18 million.
Bytes Technology announced in May 2026 its intention to implement a new share repurchase programme to purchase the company’s shares for an aggregate value of up to £25,0 million. This week the company repurchased 250,000 shares at an average price per share of £4.18 for an aggregate £1,05 million.
British American Tobacco has again extended its share buyback to end on 12 October 2026. All shares repurchased will be cancelled. Over the period 20 to 24 July 2026, the company repurchased a further 635,993 shares at an average price of £45.98 per share for an aggregate £29,25 million.
Ninety One plc announced an increase in the repurchase programme from £30 million to £55 million to be completed in July 2026. The shares, to be purchased on the open market, will be cancelled to reduce the Company’s ordinary share capital. This week the company repurchased a further 562,869 ordinary shares at an average price 215 pence for an aggregate £1,21 million.
Anheuser-Busch InBev’s US$6 billion share buy-back programme continues. The shares acquired will be kept as treasury shares to fulfil future share delivery commitments under the group’s stock ownership plans. During the period 20 to 24 July 2026, the group repurchased 531,748 shares for €38,06 million.
During the period 20 to 24 July 2026, Prosus repurchased a further 2,187,722 Prosus shares for an aggregate €82,76 million and Naspers, a further 986,509 Naspers shares for a total consideration of R803,74 million.
Two companies issued a profit warning this week: Mpact and ArcelorMittal South Africa.
One company withdrew a cautionary notice: Mantengu.
Egypt’s e-commerce operations platform Fincart has raised an oversubscribed US$2,8 million seed round, co-led by Launch Africa and Antler MENAP, with participation from Yango Ventures, Five35 Ventures, Bluestream Capital, Hi2 Global, Kalahari Venture Labs, and other regional investors. Fincart provides an AI-powered operating platform that enables merchants to manage shipping, customer engagement, and cash advances through a single interface, integrating with more than 40 courier companies across Africa.
Eos Capital’s Allegrow Fund has announced the exit of its stake in The Mushara Collection. The fund invested back in 2021. Mushara is a luxury lodge at the Etosha National Park, large tourist destination in Namibia. Mushara offers a diverse collection of accommodation ranging from the stylish and child friendly Mushara Bush Camp, to the supreme luxury of the Mushara Villas.
Barka Fund has invested US$1 million in Orient Enterprises, a Kenyan macadamia processor and exporter operating an FSSC 22000-certified facility in Juja, Kiambu County. The company produces vacuum packed raw macadamia kernels, macadamia oil, and flavoured macadamia kernels under its Orient Chef brand, supplying local retailers and premium export markets across Europe, North America, and Asia. The blended investment, comprising $500,000 in preferred equity and a $500,000 structured working capital loan, will fund infrastructure upgrades, working capital, and agroforestry expansion.
Impact Fund Denmark is providing a US$22,5 million loan to African agribusiness group ETG. The investment will help ensure that thousands of African farmers gain access to fertiliser and markets, while also receiving fair prices for their crops. The investment is structured as a sustainability-linked loan, with the interest rate reduced if ETG meets a series of specific targets. These include increasing support for women farmers, expanding advisory services for farmers, and reducing deforestation and carbon emissions.
Pangea Africa and Black Star Africa have acquired a majority stake in Eden Tree, a producer and distributor of fresh, packaged fruits and vegetables in Ghana. The deal represents a secondary exit of I&P Afrique Entrepreneurs Fund from Eden Tree. Financial terms were not disclosed.
Angola has raised US$329 million through the initial public offering of a 15% stake in Unitel, the country’s largest telecommunications operator, marking one of the largest capital market transactions in its history. The offering attracted strong investor demand, with subscriptions exceeding the number of shares available by more than 20%. The IPO comprised the sale of 7,5 million shares, with the final offer price set at the top end of the bookbuilding range.
In this episode of the Ghost Stories podcast, The Finance Ghost sits down with Reza Fakie, portfolio co-manager of the Old Mutual Investment Group Global Managed Alpha Fund.
The fund has delivered consistent outperformance against its benchmark since inception, but the real story is how it does it. Reza takes us inside the world of quantitative investing, explaining how academic research, factor investing and disciplined portfolio construction come together in a systematic process designed to remove emotion from investment decisions.
From identifying overlooked opportunities around the world to navigating the AI boom and managing risk in a concentrated global market, this is a fascinating look at how a modern quantitative fund is built and managed.
In this episode, we cover:
How multi-factor investing works in practice
The factors that drive stock selection and portfolio construction
Managing risk while seeking consistent alpha
Why the fund looks beyond the biggest global tech names
Finding overlooked opportunities in emerging markets
How quantitative investing helps remove emotion from decision-making
The growing role of AI in investment research and portfolio management
Old Mutual Investment Group (Pty) Ltd is an authorised financial services provider, FSP 604. The contents of this podcast and, to the extent applicable, the comments by presenters do not constitute advice as defined in FAIS. Although due care has been taken in recording this podcast, Old Mutual Investment Group does not warrant the accuracy of the information contained herein and therefore does not accept any liability in respect of any loss you may suffer as a result of your reliance thereon. Past performance is not necessarily a guide to future investment performance. For more information, visit www.oldmutualinvest.com/institutional
Transcript:
The Finance Ghost: Welcome to this episode of the Ghost Stories podcast. It is the second in what I suppose could be described as a mini-series with the team from Old Mutual Investment Group.
It’s a really cool opportunity to speak to professional fund managers and portfolio managers who are out there, I think, “living the dream” for many, if I’m honest, and actually doing this really great thing where they are managing money on behalf of others.
And the whole idea behind these podcasts is to get a better understanding of how they actually go about doing this.
So, in this one we will be looking at the Old Mutual Investment Group Global Managed Alpha Fund.
It’s been around since 2017, so it’s coming up on a decade old now.
Since inception, and just based on the latest fact sheet, they’ve outperformed the MSCI All Country World index by around 200 basis points. I think that’s quite impressive.
Obviously, past performance is no indication of future performance. The usual disclaimers apply. Go and speak to a financial advisor. Do your own research as well.
But to help you do your own research, this podcast is going to be a really good look at how this fund actually works, and how it has managed to perform like this over the past decade.
To help us understand, portfolio co-manager Reza Fakie is here to take us through it.
Reza, are you tired of people pointing at you and making the “This is my quant” joke? Because a big part of what you do in this fund, of course, is very quantitative in nature as opposed to qualitative, right?
Reza Fakie: Yes. Hi Ghost, thank you for having me on.
So, just to set it straight, I’ve never won a Maths Olympiad and I do speak English, so we can get started with that.
The Finance Ghost: Ah, there we go. So, you’re scoping out being a quant, I see. Getting that out the way early.
Reza Fakie: So surprisingly enough, I started in actuarial science, which isn’t really considered an investment field for many. But while doing actuarial science, I discovered finance and never looked back.
And quantitative finance, as sitting in actuarial science, is actually a combination of three different fields that co-join together and become a very interesting combination.
So, you’ve got that finance background, understanding how the world works and what’s happening in the real world. You’ve got that maths and stats background, where you understand exactly how to measure things, how to understand things, how to understand the mechanics behind things.
And then, maybe surprising for some: programming! Because once you have a great idea that you’ve come up on the finance side, you’ve tested it on the maths and stats side, you need to actually use it to invest. And that’s where programming becomes very important. And using MATLAB, Python, R, there’s many languages out there; but being able to deploy a solution is actually important in a quantitative space.
The Finance Ghost: I love how that started with, “I’m not a maths genius.” Also, “I studied actuarial science,” – which is basically probably the most mathematical thing possible. There are levels to this game, as the Gen Zs like to say.
Let’s dig into then some of the details actually around how this fund really works. So we’ll spend a few minutes just understanding the underpinning of this thing. And the concept of a multi-factor model is very important here. So, this is something that people may have heard of, they may not necessarily understand what it actually is.
So perhaps just as a starting point, you can walk us through some of the buckets that you use and then an overview of what factor investing actually looks like.
Reza Fakie: For us, a factor (and there’s a lot of material being written about this, you’ll see it in the news, and it all seems very complicated, very mathematical) but what a factor actually just is, is some characteristic of a company or a share, which we believe has some future predictive power. It’s going to tell us how the stock is going to do over the next month or the next year.
And if we actually go back in time to the ‘50s and ‘60s, we start with people actually identifying this first factor, which is our CAPM model, which many of your listeners would be aware of, which was just saying that how risky a stock is, has some component of where its returns are coming from.
And then we move a bit forward, we move to the early 90s, and we start with probably the first multi-factor model out there, the Fama and French model. And that again is starting with saying, well, we’re identifying that there are certain components or certain characteristics of a company that have some predictive power.
And there they found that small companies outperform larger companies. They found that cheap companies, where they measure that by book to value, are outperforming more expensive companies.
And again, they have that beta component in there.
They’ve reviewed that and they added the five-factor model where they’ve included some quality-type factors, such as profitability. And then a year later you have Jegadeesh and Titman coming out with momentum.
So, all through time there are these people identifying actually there’s these characteristics of either the stocks or the company itself that is saying that actually, it makes a difference to how it’s going to perform in the future.
Now, we’ve looked at this, and we’ve identified two families of factors or two groupings of factors, being your fundamental factors and your technical factors.
On the fundamental factor side (your listeners would be aware of this listening to more fundamental managers or other managers saying, “Well, I’m looking for a cheap company,” which is that value family), there’s the “I’m looking for a well-run company,” which for us is quality.
And then you have, “Actually, I’m looking for a company that’s growing, it’s growing the earnings, growing the expectations of earnings and expected to grow into the future”, which is your growth factor.
Those are the fundamental factors that we look at.
But being a systematic manager, we can identify what anomalies in this market tend to persist.
One that everyone knows about is momentum. So, winners keep winning. And we’ve identified this happening time and time again.
The next one, maybe surprisingly, is actually a reverse of what was initially assumed. It’s been found that lower-volatility stocks actually outperform their higher-volatility peers. So, low volatility is actually what we look for in that factor.
And lastly, again from that original three factor model, there’s still that persistence of small companies outperforming larger cap companies.
And those together are these factors that we look at, these six families, three in each of these two groupings.
Now for us, over the long term, all of these factors tend to outperform. But the reality as an investor is, we’re looking at our portfolio every day, every week, every month. We see that yes, these have long-term payoffs, but the reality of it is actually a much more volatile, shorter-term performance.
We’ve identified (and this is how we look at factors) these factors at work over the long term. And then say, “Well, how do we invest in these today?”
And there’s actually three characteristics of factors that we look at to make our decisions.
The first is that all factors are cyclical. If you hear someone investing in value or quality or momentum, those are going to perform very well for certain periods of time. But they also can have underperforming periods. So, there’s this natural cyclicality.
Unfortunately, a lot of the time in the market, you’ll hear about the death of value two, three years ago, where value was underperforming for a long time. But again, it’s part of its natural cyclicality. And what we’ve seen the last two years is value coming back significantly well.
So again, there’s this natural cyclicality of factors outperforming and underperforming. And you have to be aware of that at each point in time.
The second characteristic is actually asynchronicity, which is a mouthful, but it just means that not all of these factors move at exactly the same point in time.
When value is doing well, quality can do poorly and momentum could be doing well or poorly at that same point in time. And this allows us to invest across a multitude of factors, and actually benefit purely from diversified across factors, and not just focusing on one or two.
Lastly, how we actually decide which factors to invest in. So, we’ve got this pool of factors, and we wanted to be determined whether we want to be overweight or underweight any of these factors at any point in time.
What actually allows us to make that decision is the short- to medium-term trend in factors.
So, we look at each of these factors, and what tends to happen is when a factor starts to trend positively, it generally tends to continue that positive momentum. Similarly, when a factor starts to underperform, it also continues that downward momentum.
And that trend looking over the last year, actually tells us, right now we should be overweight these factors and underweight those factors. And that ultimately informs us on a high level, on how we should be positioned within the market.
The Finance Ghost: So much cool stuff coming through there. Thank you very much. That really does give a strong indication of how this thing actually works.
And I think people hear terminology like “quantitative versus qualitative investing”, they hear words like “algorithms”; I mean “algo trading”, which is obviously not what this is.
But people hear these kind of terms, and maybe as part of answering the next question, I can ask you to just help us understand exactly which umbrella this fits into.
You’ve already touched on it, which is how the model is maintained, how it’s built, how some of the backend academic-type research has informed the way this thing is actually put together, the amount of back-testing.
But ultimately a lot of it also comes down to managing human emotion, right?
And perhaps my… not perfect definition, but the one way I would think about a more quantitative fund, there’s a lower probability of emotion coming into it because it’s very model-driven, as opposed to something where there’s more in the way of judgment calls, right?
Reza Fakie: Correct. How we view the world is that we’ve developed this model to tell us how to invest in factors. But ultimately, any model, being quantitative in nature, you trust your model, you understand your model. But you know, every model has downfalls, it has risks.
And for us, this takes us to the next step, which is actually portfolio construction. Which is where we say, “Actually, what is this model really good at, and where can we utilise that in our portfolio? But also where is this model really weak, and how do we prevent or mitigate those risks?”
And that is what we spend a lot of time applying our mind to. Where we say, well, we like choosing factors. This model is really good at deciding how we should be positioned.
But ultimately, we don’t want to be taking any single stock risk. That is, we don’t want to have a large active tilt relative to our benchmark. So, our benchmark is the MSCI All Country World Index, which has both EM and DM in it.
When we look at this benchmark, this is our guiding light. This is what we want to generate alpha against.
When we look at it, we say, well, this model can be really good at producing alpha by choosing factors. But given the universe and this benchmark that it’s being invested against, there are certain components of it that we want to mitigate. So, we don’t take a large active tilt, we won’t go more than plus-minus 1% relative to our benchmark, as well as on country and sector.
So, we’re not going to take a huge punt on the US and say we’re going to go only into the US or a significant overweight into US, or underweight. We cap that around 3%, and the same with sectors.
What lets me sleep at night is that I trust the model. This model has been continuously tested and back tested. But we’ve put the safeguards in place on the portfolio construction side as well to ensure that the model is actually controlled for what it’s good at and what it’s poor at.
When we run this process, we never ever make any changes. We never override it, saying, actually, I want more Nvidia or I want less Samsung. We allow the model to do what it does best, and we trust in our portfolio construction to actually mitigate those risks.
We never change the outcome. If we believe something can be improved, it’s always backed by research. So, we’ll go back and say, well, is the portfolio behaving as we expected? Is it from portfolio construction? Is it from the model? Are there any improvements we can do to either improve either or both components?
And it’s a research-to-improve mindset, rather than “I don’t like this outcome, let me change the outcome”.
The Finance Ghost: Yeah, that’s great. Another wonderful set of insights there. And I think you’ve spoken so well to some more of the design elements around things like tracking error, etc. and how you just actually build this thing.
So perhaps just one more question then, before we actually get into some case studies in the fund, which I think is where it gets really interesting.
Just the costs of churn. It sounds like this is the kind of fund that might be making changes (and you can confirm whether this is correct or not). Would you say that the churn in this fund is perhaps higher than some other models and how do you actually manage that?
Reza Fakie: We actually don’t see as high a churn as you might expect. Generally, within this fund we’re looking at about 100% one-way turnover within a year. And that may seem a lot to fundamental standards where they may churn a lot less, but you have the potential (given a quantitative strategy) to actually churn significantly more. And how we actually control that is how we look at our trading every single month.
Now if you think about what I’ve covered so far, when we enter a new month, we have this model that we’ve updated and tells us, well, what are the best stocks to invest in given our model views? And we have our existing portfolio.
So, if you think about just manually (and again we’re obviously applying an optimiser to get to this result) you’d say, “Well, what is the best thing in my model that it now really likes that I don’t own?” And I’d buy that.
“What is the worst thing that I do own now in my model that I want to get rid of?” And if you buy and sell, you “net neutral” that trade, it will give you some sort of gains. Let’s say that’s 1% expected gain.
If you repeat that and say, well, what is the next best thing I don’t own and what is the next worst thing I do own? And do that same trade again, you’re expecting to generate some positive alpha.
But the reality of what happens when you do this through each level of turnover is that you get a “turnover frontier”. And what you end up seeing very quickly is that when the model hasn’t changed significantly – and again, due to the short-medium term persistence, a lot of the time over one month, two months, three months, we’re not seeing a significant shift in the model.
It depends on what Trump decides to wake up in the morning and say and tweet about. But that just creates this added volatility level in the market. If we take an example of what happened over last year, when the trade impact happened, when Liberation Day happened, that actually caused a significant shift in the market.
Because people were actually changing their minds on how they should invest, should they go more value, should they go less quality. That actually impacted the model. And we saw that change happening in the model, and in our portfolio. Whereas if you look at the Iran war, this Iran war just adds a lot of inflationary pressures, but it never actually changed the investor’s mind.
So over that period, our model would have changed quite a bit. Over this period, our model has actually almost ignored the Iran war, and we’ve benefited from effectively ignoring the noise.
Coming back to my example, what then happens is you see this frontier, and if you think of any sort of efficient frontier, there’s a point where your additional gain kind of flattens off. So, what we look to do is maximise that marginal gain.
We’re only trading as much as we’re getting more signal from our model into our portfolio. But we won’t go just trade everything we can because that ultimately just introduces costs into your portfolio, which then detracts from performance.
Coming into each month, we dynamically assess what is the optimal amount to trade to actually maximise the signal within our portfolio without just trading for the sake of trading.
The Finance Ghost: It just shows you how many judgments calls there still are in something like this, right? As much as it is very model based, quite correctly so, there still needs to be, dare I say it, that “human in the loop – and of course, that concept is key to all the debates around AI at the moment, which is driving global markets.
And maybe that’s the perfect opportunity for us to now jump into some of the case studies.
Because unsurprisingly, if I look at your fact sheet, a number of the big tech names that I would expect to see in a global fund with momentum as one of the factors are there, and that makes sense to me.
But the weightings do look quite different to what you might see if you go and actually buy just the broad index.
Let’s start then with the big tech names. How does your fund treat these stocks? Why are they important? And am I right that the weightings do look somewhat different to what you’ll find in the index?
Reza Fakie: That’s correct. So again, our starting point is always this model and what it likes in this market and what it dislikes.
But why you’d see those big tech names comes down to a portfolio construction process. As I’ve mentioned, we don’t take a large active tilt, say plus-minus maximum 1% relative to these names.
And as we’ve seen over the last few years, we’ve seen this growth in mega-tech companies with significant weightings, like Nvidia, Microsoft, Tesla. Micron just became a trillion-dollar company the other day. You’re seeing this growth in these large companies. They’re taking up more and more of the index.
Now, taking significant risk against not holding these ultimately leads to a poorer outcome in our process. So, we limit our active tilts around these stocks and focus on holding the factors themselves and generating, or rather harvesting, from the factors themselves.
If you compare those Mag 7 or those big stocks relative to the benchmark weights, you’ll find we’re slightly underweight six of those seven. The only one that we overweight now is Alphabet.
It’s holding these stocks because they’re quite large in a benchmark but actually taking active tilts away from them to generate alpha from the factors themselves. And we’ll see that, for example, the model doesn’t necessarily dislike some of these large Mag 7s that we’re slightly underweight, but rather it’s found better opportunities elsewhere.
For example, we like SK Hynix and Micron. If you look at the benchmark itself, it is holding a large weight in these large tech stocks, as the index itself has become more concentrated and these large stocks have seen significant growth over the last few years.
While we’re underweight a lot of these Mag 7 stocks, it’s not to a large degree, and it’s not that necessarily the model “dislikes” some of these stocks that we are underweight. It’s just that it’s found better opportunities elsewhere in the market. It’s always a balancing act when we’re optimising.
It’s the difference between how we maximize the potential alpha for the risk we are taking, but also mitigating taking active tilts where there isn’t necessarily that benefit to be had.
We are taking those active tilts around the benchmark to maximise that factor return. But it’s mitigating that overall risk. And as you mentioned, we employ a fairly strict tracking error of 2% to 3%, because within that, we believe there’s sufficient opportunities to meet our performance goal.
The Finance Ghost: It’s very much about finding alpha at the margins, right? That’s really what this is about. It’s not, for example, a hedge fund which might do something wildly different to what the benchmark might be.
Where the benchmark almost becomes like, “Well, you could have invested in this”. But actually, the things are so different that there’s almost no comparability left at all.
Whereas what this is basically saying is there’s going to be a lot of clever stuff applied here. It’s going to be different, but it’s not going to be wildly different, right?
Reza Fakie: Correct. And as our motto is “Champion the Unseen”, we’re looking for those opportunities. Many people find it surprising.
So, looking at MSCI ACWI, going a little bit deeper, 90% of it is in developed markets. Only 10% is weighted in emerging markets. But actually, by number of constituents, it’s split 50/50.
Half the universe is in emerging markets and there’s a massive amount of opportunity available in that. So, it’s finding those opportunities that maybe may not be apparent, may be overlooked given their size, but given what our model is telling us, this is attractive. Even though they are a smaller company.
That is what ultimately gives us confidence that we can invest in these stocks. They are aligned with our model. We expect them to outperform. One of the examples we have is we’ve been invested in Samsung, SK Hynix and Micron since late last year, and we know that the big story for this year, starting from January, has been this massive ramp-up in performance. They’ve done over 100%, some of them over 200% year-to-date.
The reality is when we looked back at that point in time, there were these factor characteristics that we really liked. We liked high-beta stocks, and they were definitely high-beta stocks. We like the momentum component of them. And what may be surprising to some, especially around value, is that these were actually very good value stocks.
You think of this large run-up and like, well actually how can they be value stocks if they’ve seen such a large run-up? Well, they actually had really good earnings because there was this significant push in demand in their product for this AI build-out that’s happening.
All of a sudden, everyone needed memory, especially the big AI scalers, Meta, Amazon, and that significantly pushed up their margins, significantly pushed up their demand and they saw that revenue come in as earnings. Relative to their share price at the time, they were seeing a significant growth in earnings relative to share price initially, which actually made it very attractive on a value basis.
Yes, some of that value basis has declined somewhat, given the continued share price increase. But again, we’re not seeing it as a detractor. We still don’t see these stocks as expensive stocks, relative to the rest of the universe.
It’s this combination of factor views that ultimately allows us to have this confidence. It’s not just one factor telling us to invest in a stock. It’s the combination of a series of factors, and they are well aligned with our overall factor views to actually say well, this is something that should persist into the future.
The Finance Ghost: Of course this leads to the obvious next question, Reza, which is what do you do first in the morning? Brush your teeth or check the South Korean market? Because it sounds like it might not be the teeth, huh?
Reza Fakie: Yes, I generally do check what’s happened around the world. South Korean market opens at around 2am our time, depending on daylight savings. So, a lot has happened by the time we’ve woken up.
And it’s maybe just being a global portfolio manager that many people think that no, you just care about the US; the US is 60% of your benchmark. But actually, it’s where you have your active tilts, right? It’s where you are invested in. And we’ve invested across Thailand, Hong Kong, Korea, India.
There’s a lot that has happened by the time I switch my desktop on at 8:30 in the morning. A lot of the trading has already happened. And it’s more to just understand, well, what has actually happened?
But again, being a systematic investor, I’m not putting my finger on the trigger every day and saying we need to change something. It’s about understanding what is happening out there in the world. How is it influencing your portfolio? What is likely to change into the future?
If you start seeing a trend emerging from a certain sell-off or a certain bull run, you know that when you get to the next model run that that is going to ultimately influence what your next month’s portfolio is going to look like. So, it’s a good idea to understand exactly all the moving pieces.
The Finance Ghost: Yeah, absolutely. And well done on those trades obviously because those are the positions you wanted to be in this year. But of course, as we speak, lots and lots of question marks around AI stocks and especially I think those top-of-the-value-chain type names. Your memory stocks, etc.
It’s the shovel in the gold rush, of course. And we saw some interesting news recently from Meta selling “excess compute”, which I think are two words that gave the market a little bit of a skrik.
Everything has been about a supply crunch. “What is this excess compute that you are speaking of, Mr Zuckerberg?”
And look, no one knows obviously, we’re all just trying to do our best to figure it out and try and guess what’s going on and make educated guesses around what’s going on.
But in terms of your approach, and the model and the cyclicality that is inherent in a number of these stocks, and making difficult judgment calls like, “Are the memory stocks still cyclical or are they actually enjoying a structural underpin now?”
How do you handle that in a multi-factor model? What are you thinking about at the moment as markets look increasingly hot, let’s be honest, around some of these stocks?
Reza Fakie: There are two components to it. The one is, the model will identify what is a good value stock. So, for example, SK Hynix and Micron, where those stocks became really good value stocks, and now they’ve declined in value.
So, through time, as these stocks outperform/underperform, as they release their quarterly results, the picture of a stock and what it’s exposed to and whether it’s a good value or good growth or good quality stock, that transforms through time.
On the other hand, what moves a lot quicker is actually our model itself, determining, do you want to be in momentum right now? Do you want to be in high-beta stocks? Do you want to be in quality?
Those two components are moving through time. And at the moment we’re seeing, while there’s these sell-offs that happen for a few days, there’s these structural changes that could be happening. At the moment, we’re still seeing that the same factors are playing through. Momentum is still playing through quite well. Value is still playing through quite well.
We’re starting to see a bit of a correction on that. But one month is not a correction, right? You need to see a significant trend change for it to change your mind. It’s not always a good idea to just pull the trigger quickly and see, “Okay, something is changing. It looks like it’s changing. I want to get ahead of it”.
The reality is you don’t know, at that point in time. You need to actually sit back and say what is measurable, what is actually investable is a trend. Monthly signals aren’t a trend. So how is this month influencing the longer-term signal? Is it shifting it back?
What we generally see, and like I mentioned, our model doesn’t generally change one month, two months. When volatility starts coming off, when momentum starts coming off, you’ll start seeing that pullback in our model as well, until a point where it’s pulled back far enough to go underweight.
But at the same time, in those stocks that are now performing well or underperforming, we might see, for example, a stock starts to underperform, but the momentum theme itself might continue.
All it means is that that stock itself isn’t a good momentum stock. But there are other stocks that have now come up and have now bolstered this momentum theme further. And we still believe in momentum, but it’s just not those same stocks anymore. Hope that clears that up a bit.
The Finance Ghost: Yeah, it makes sense. Thank you for being willing to share this stuff. Obviously, you’re sharing ultimately your proprietary approach publicly, so you can’t send us a screenshot of the model. But it certainly helps to just understand more of how you think.
As we start to maybe bring this to a close. Let’s talk about some of the smaller names in the fund. As you quite rightly pointed out earlier, Old Mutual Investment Group is busy “championing the unseen” at the moment.
And that means just putting the spotlight on some of the areas of these funds, etc. that people might not know are there, and might find very interesting. You’ve given us some quite big names that I think people will know. They were unseen; I’m not sure they are now; but as you say, that’s how momentum works.
But some of the other smaller names in the fund, maybe a couple of examples, and at what weighting they tend to come in. Because I think, as you said earlier, it’s interesting the split between developed and emerging markets in terms of overall exposure, but the number of names in each of those portfolios was a particularly interesting insight.
Reza Fakie: In terms of smaller companies, maybe going back to the MSCI ACWI Index, there’s roughly 2,500 Maybe surprisingly, there are as many US as Chinese stocks. So even though the US is 60% of the index, it’s got 600 stocks. China actually has around 600 stocks as well, and it’s only around 4% of the index.
So, there’s a lot of opportunity within China and Chinese stocks, especially around the same AI build-out. So, the two examples I have are Zhongji Innolight and Eoptolink. I’ve probably completely butchered their pronunciation…
The Finance Ghost: …I mean, I’ve never heard of them. So, Reza, on the money there, championing the unseen. I’ve never heard of those names. You’re going to have to let me know for the transcript how to spell them (laughs). That’s how unseen they are. Fantastic. Carry on.
Reza Fakie: They’re both optical companies, so involved in the AI build-out. So Zhongji Innolight produces optical receivers; Eoptolink produces optical modules.
And again, as AI grows, the data centre components. Yes, there’s that massive Nvidia chip. Maybe not in the Chinese servers for now, but there’s these massive chips, there’s these optical providers, there’s different components.
The two components that are probably focused on the most in the market is the chip itself, made by Nvidia and AMD; or now at the moment, the memory producers being SK Hynix, Micron and Samsung. But the reality is there are thousands of other components that actually go into building this AI build-out. And these are two of those companies.
And again, they were identified quite early on by our model based on their factor exposures and given their size. So, these will probably be less than 5bps. Well, they will both be less than 5bps in the benchmark. And we generally take an active tilt of around 30bps to 50bps initially, depending on how well the stocks are liked, and how much risk they contribute.
Because there’s always a payoff, right? Between a stock that is really liked, versus how much risk it contributes to your portfolio.
As an example, just going back the last month, Micron is still really liked in our model, but given that it’s run significantly, it generates a lot of risk, it’s actually been pulled back in our portfolio construction because of its significant contribution to risk.
So similarly, when it comes to these smaller stocks, we know that including a very large active tilt will significantly increase the risk of the portfolio. But we’re trying to maximise this gain across the entire portfolio.
These are two small stocks it’s identified. It won’t put them at significant overweights, maybe 30bps to 50bps. But ultimately, we’re looking at those small plays that we can actually generate alpha from.
The third company I’ll bring across is – I know there’s been a lot of hype around SpaceX lately, so a lot of people are worried that all of these index providers are including it. Is it going to dominate our indices? There’s a brand-new company, we all have our different thoughts around Elon Musk and Tesla, and people were worried: “Are people just going to be forced to buy the stock?”
Well, very early on became obvious to us that yes, by market cap it’s a massive company given its size, but it actually has a very small free float. And the reality is within the MSCI ACWI Index it has come in at less than 10bps. It’s almost small enough to ignore. It’s not this big player everyone thought it would be.
Yes, it’s still a significant size. Yes, it is a fairly large player in the space. But actually, it’s coming at a smaller size, maybe, than what people expected.
On the other hand, a company that our model did identify a few months back and we’ve been invested in, is Rocket Lab. Very similar to a SpaceX. But actually, it provides end-to-end launch services, spacecraft design, satellite components, flight software.
So, everyone is focused on SpaceX, but actually we’re seeing a growth in the space exploration business as a whole. And this Rocket Lab company that we’ve identified is actually something that we’ve been invested in and has actually grown nicely.
Maybe some of it is due to hype from SpaceX, but actually in its own right, it’s aligned very well with our factor views and it’s done really well in our portfolio.
The Finance Ghost: Well done, I really enjoyed that. So, let’s bring it home now. Reza, I’ve got you for a couple more minutes.
AI, we’ve spoken about it a great deal in terms of something you can invest in, but I’m guessing it’s starting to have an impact on how you actually run the fund as well?
These tools are always interesting to think about. They certainly do have their limitations, but they tend to have some benefits as well. Maybe for the sake of the interest of listeners, give us a couple of minutes on, in this fund, how AI tools are starting to make a difference to your daily life?
Reza Fakie: It’s actually been making a significant difference. From my perspective, when we look at the factors themselves, and the model, we want them to be understandable, right? We don’t want to just generate a black box and hope for the best. Because if you don’t know why something is working, you don’t know when it’s going to stop working or why it will stop working.
So, when it comes to the actual modelling process, we try and keep our process as transparent and understandable as possible. But in the ways we work – so I mentioned before, I spend a lot of time programming, and just in terms of using Claude Code and using Claude to generate code for me, it’s been helpful.
I’ve been coding for over 20 years. I started in high school, so maybe revealing some of my age here, but I’ve been coding for many years. I’ve just noticed that I focus less on syntax (on figuring out the perfect amount of code, the perfect way to do something).
Claude knows exactly how my database is set up, how I usually do my queries for analytics, and I can spend a lot less time worrying about typing out code and a lot more time focused on the analytics side. It allows you to be more productive from that perspective.
Even in my commentary, I will write out my views of what has contributed performance, all the information that I think is relevant; and I’ll then have Claude review it and say, “Well, this can be more succinct. You are duplicating words”.
So, you focus on the important parts of your job across the board, not just in portfolio management, but subject matter experts are going to become more important because you have to decide: is Claude telling you the truth? If Claude gives me a bad piece of code, I need to understand, well, what is it doing wrong? I can’t just say this isn’t working, fix it. You need to understand what exactly it’s doing wrong.
And sometimes it’ll give you a piece of code that works, but the output is wrong. And using your experience (your subject matter experience) you need to understand why this is wrong.
What is it doing wrong, what assumption is it making?
So, the “Claude is going to take all our jobs” hype is going away and it’s focused more on, as people, we have certain knowledge sets – being stats, maths, marketing, writing.
Ultimately where Claude will help us is to actually improve our output. It’s not about us not doing any work, it’s about verifying and understanding exactly what is coming out and actually using it to help us make better decisions, ultimately.
The Finance Ghost: Reza, thank you. Really appreciate your time today. Where can people go and actually find out more about this fund and potentially engage with you if they are interested in investing?
Reza Fakie: We have our website, oldmutualinvest.com. That is our main portal. Feel free to contact anyone on the website at the bottom, and within our distribution team.
The Finance Ghost: Excellent. Thank you so much. I am really enjoying getting to know the team on that side and how you guys operate. It has been a lot of fun, and I’m looking forward to the next podcast coming along as well.
To the listeners, if you enjoyed this, go and check out the fund. Also go back and listen to the previous podcast with Old Mutual Investment Group. That was with Maahir Jakoet, and he runs the Shari’ah-compliant fund. Let me tell you, you’ll get some really cool insights there as well into how Shari’ah -compliant investing can deliver some unexpected performance outcomes, versus what I would call traditional investing.
But Reza, thank you so much for your time today. You’ve given us a wonderful example of multi-factor investing. It really helped us understand what’s going on there and all the best for the remainder of this year.
I think we’re in for an interesting time in the markets around some of these tech stocks. I’m sure you’ll do a great job of navigating it, so well done and thank you.
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