Unlock the Stock is a platform designed to let retail investors experience life as a sell-side analyst. Corporate management teams give a presentation and then we open the floor to an interactive Q&A session, facilitated by the hosts.
In the 46th edition of Unlock the Stock, TWK returned to the platform to talk about the recent performance and strategic focus areas for the group. The Finance Ghost co-hosted this event with Mark Tobin of Coffee Microcaps and the team from Keyter Rech Investor Solutions.
AECI has stabilised its normalised EBITDA (JSE: AFE)
The mining business is where the pressure currently sits
AECI describes 2024 as a year of transition. They’ve released an update for the ten months to October, which tells you that they want to keep the market informed on how things are going. This is typical behaviour when a company is going through a turnaround.
Turnarounds come with all kinds of non-recurring expenses as groups reshape themselves and make changes. It’s therefore also typical to see the use of normalised profit measures, as management teams try to tell the story excluding the once-offs.
For the ten months, AECI’s revenue is down 4%. Mining is the biggest part of the business and was down 5%, while the Chemicals side saw revenue fall 4%. Despite this, normalised EBITDA fell 1% and normalised profit from operations is down 4%.
In case you’re curious, profit from operations without the normalisation adjustments fell by 29%.
On the balance sheet, the good news is that net debt fell from R5.2 billion to R4.8 billion. Gearing is therefore within the guided range. Free cash flow is a far less encouraging story, falling dramatically from R1.47 billion to just R82 million. It’s still positive, at least.
The noise in the numbers isn’t over yet. They expect to recognise some substantial impairments on businesses like AECI Schirm and AECI Much Asphalt.
Although normalised profits may have stabilised, the AECI share price is down 16% this year. That performance looks even worse when you compare it to the general exuberance in the market.
Growthpoint is reworking its property exposure – especially in South Africa (JSE: GRT)
Focusing on the right sectors is key to success
Growthpoint has always been the scale player in the local property game, with a portfolio that gets you as close as possible to a view on property in South Africa as a whole. They also have substantial offshore interests. Thanks to the pandemic and the general trends in South Africa in particular, a broad portfolio needs to become a more focused portfolio to drive shareholder returns.
The strategy in South Africa is to decrease exposure to the office sector, sell older industrial assets and get out of non-core retail assets in deteriorating CBDs. Sounds sensible, doesn’t it? I wouldn’t want to own any of those things either. They have targeted R2.8 billion in disposals and they expect to invest R2.2 billion (both numbers are references to FY25) in the core local portfolio, focusing on modern logistics and retail investments, especially in the Western Cape. Again, that’s very sensible.
The V&A Waterfront is so important that it gets a separate mention, with Growthpoint predicting “significant growth” in the next 3 to 5 years. As someone who absolutely loves living in Cape Town, I couldn’t agree with this more.
Internationally, Growthpoint is simplifying and optimising. A good example is the Capital and Regional deal that is being implemented in early December, giving Growthpoint exposure to a larger UK platform through NewRiver.
The announcement also gives some numbers for the three months ended September. Vacancies have improved in South Africa from 8.7% to 8.2%. Renewal rates improved from -6.0% to -0.4%, so the negative reversions are nearly a thing of the past. This has come at the expense of the lease renewal success rate, though. Rental escalations are at 7%, so that protects Growthpoint against inflationary impacts in property operating costs.
It says something about the long tail of unappealing properties in the Growthpoint portfolio that the retail portfolio had negative reversions of -0.5%. They’ve had some non-renewals as well as major malls in Gauteng. They have lots of cleaning up to do here.
In the office portfolio, they note that this is the first quarter post-COVID where tenants haven’t reduced space. The return of traffic in the mornings certainly suggests that people are no longer Staying Home and Staying Safe from Monday to Friday. Rent reversions in the office portfolio were -4%, a significant improvement from -14.8% in FY24. They do expect this to worsen in coming months though to mid- to high-single digits, so be careful of getting excited about seasonal improvements here.
In the logistics and industrial sector, vacancies are down to 4.5% overall. The coastal regions are popular, with extremely low vacancies. Here’s a great statistic for you: the Western Cape achieved positive reversions of 8.8%, while Gauteng and KZN are running at negative reversions of -1.8%!
There are many more details in the announcement for those who want to read everything. I only have space for one more stat: a spectacular 20% growth in EBIT at the V&A Waterfront. The area is booming, with average daily rates at hotels in the area up 35% vs. the same period last year.
Despite all the positive momentum, Growthpoint still expects distributable income per share to decrease by between 2% and 5% for FY25. They attribute this to prevailing high interest rates. Of course, the not-so-pretty parts of the Growthpoint portfolio aren’t helping either, but at least they are doing something about that.
HCI sees a huge knock to earnings – and the oil and gap business is only part of it (JSE: HCI)
The group hasn’t enjoyed the SA Inc returns that were on offer this year
Hosken Consolidated Investments is the mothership for a portfolio that touches many different sectors. Some of the underlying exposures are listed, like eMedia, Frontier Transport, Deneb and Tsogo Sun. Others are unlisted, like the oil and gas prospecting business.
The six months to September won’t go down as a happy time for HCI. HEPS tanked 46% from 971 cents to 529 cents. Even a dividend of 50 cents per share (vs. nothing in the comparable period) won’t make anyone feel better. HCI’s share price is down 12% this year, missing out on the upswing that many local groups have enjoyed.
The major culprits? Well, oil and gas prospecting is certainly the worst segment in this period, with a headline loss of R264 million vs. a loss of R31 million last year. That’s obviously an extremely risky business that will either lose a lot of money or make an absolute fortune. It’s more of a gamble than the gaming business itself, with Tsogo Sun’s results having prepared the market for a drop in that segment at HCI. Leaving aside the other listed exposures, the other drop worth noting is in coal mining, with headline earnings of R38 million vs. R133.5 million in the prior year.
I must highlight that HCI’s share price is up 93% over five years, which means vs. a pre-pandemic base. You just wouldn’t say so by looking at these specific numbers. They are playing the long game.
Nampak gives further details after its trading statement (JSE: NPK)
Major shareholders requested more information ahead of full results
Nampak released a trading statement earlier this week that indicated a substantial swing into profitability for the year ended September. It was light on any other details though, which seems to have frustrated major shareholders.
After major shareholders put in a request to Nampak to release more information before the results presentation on 2 December, the company has put out another announcement that gives more information on the second half of the year in particular.
The first half included a once-off gain of R290 million on a restructure of post-retirement medical aid benefits, so that obviously flattered the first half relative to the second half. There were also some non-recurring costs in the second half, ranging from cybersecurity costs and financing fees through to the delay in commissioning of the Springs Line 2. Whilst some of the costs are non-recurring in nature, others sound very much like the risks of doing business as a complicated group across several countries.
The share price has been on quite the rollercoaster ride, initially dropping sharply based on the trading statement and then clawing much of it back after this announcement. Any investors who expect a smooth path at Nampak with no major operational issues need to do some serious thinking about how unrealistic that expectation is, given the complexities involved in manufacturing.
Pick n Pay’s two-step recapitalisation is complete – now they have to stop losing money! (JSE: PIK)
The hard work starts now
In the past nine months, Pick n Pay has tried to fix several years worth of mistakes. The thing is, nothing is actually fixed yet – they’ve simply raised enough money to give them a fighting chance.
Step one in the plan was the rights offer, which was strongly supported by the market. I must point out that when institutional investors are that deep in the hole, persuading them to roll the dice one more time isn’t the most difficult task. People thrive on hope.
Step two was the Boxer IPO, which was a resounding success because the shares in Boxer were priced in such a way that the IPO couldn’t possibly fail. This is proven not just by a common sense look at the implied multiples, but by the sheer demand for the shares from institutional investors in the pre-IPO raise and the general market on the first day of trading. Things have played out in line with what I’ve been writing in Ghost Bites since the IPO pricing was first announced.
I did enjoy Pick n Pay commenting that they can now repay all their long-term debt and “convert interest costs to interest earnings” – investors definitely didn’t put in capital in the hope of earning interest. They want to see the capital deployed into the business in a way that generates an adequate return on capital.
My view remains that the easy part of the turnaround is behind them at Pick n Pay. The real work starts now. It will not surprise me to see Pick n Pay selling more shares in Boxer once the initial lock-up period concludes. On the plus side, they need to achieve this turnaround in a vastly more favourable macroeconomic environment in South Africa than anything we’ve seen in the past decade, so at least they have a chance.
Sanlam and Santam: each playing to their strengths in the MultiChoice insurance transaction (JSE: SLM | JSE: SNT | JSE: MCG)
Sanlam is taking the life insurance side and Santam the general insurance
Back in June this year, Sanlam announced that its subsidiary Sanlam Life would be acquiring 60% in MultiChoice’s insurance business NMS Insurance Services for R1.2 billion in an upfront payment and R1.5 billion in potential earn-outs. The earn-out is based upon the gross written premium that will be generated in the year ending December 2026.
There are two separate classes of shares. The ordinary shares are linked to the life insurance products and the A1 ordinary shares are linked to the general insurance products.
It therefore makes sense that Santam (in which Sanlam is the controlling shareholder) has agreed to acquire Sanlam’s 60% interest in the A1 ordinary shares for an initial amount of R925 million and a potential earn-out, although the expectation is that the earn-out on this part of the book will be limited. This leaves Sanlam with the life insurance exposure only, which is sensible, while allowing Santam to focus on device insurance into the MultiChoice subscriber base.
This is a small related party transaction, so an independent expert needed to opine that the terms are fair to Santam’s shareholders. Ernst & Young has provided such an opinion.
What is the true cost of the SAP disaster at SPAR? (JSE: SPP)
At least the business (excluding Poland) is heading in the right direction
Spar has released results for the year ended September 2024. They have been impacted by a number of underlying factors, ranging from own-goals like the SAP implementation disaster in KZN through to macroeconomic shifts like the stronger rand the impact this has on translation of offshore results.
Focusing just on continuing operations for now (i.e. excluding Poland), group turnover was up 4%. Operating profit thankfully jumped 15.1% and HEPS came in 11.1% higher. Despite the obvious improvement here, there’s still no dividend. This tells you something about the struggles being faced.
The big win is that group net borrowings reduced by R2 billion from R11.1 billion to R9.1 billion. This includes the R2 billion bridge facility needed to get the Poland disposal across the line. In case you’ve forgotten, they are basically paying someone to drag that business away. When you consider that Poland made a loss before tax of R1.27 billion for the year, it makes a lot more sense.
To give context to the sizes of the other businesses in the group, Southern Africa made profit of R1.1 billion, Ireland came in at R925 million and Switzerland is much smaller at R84 million.
Switzerland is the next worry for me. There’s debt of R2.8 billion in that thing, which looks huge compared to profits. For context, Ireland is over 10x bigger in profit and has R2.15 billion in debt. The Swiss business has been under pressure and I hope it doesn’t turn into the next Poland. A drop in turnover of 6.2% in local currency isn’t encouraging.
Southern Africa is being impacted by the SAP issues, with gross margin down from 8.7% to 8.5%. At least market share has stopped going backwards, impacted by stock availability issues and of course the strength of a key competitor like Shoprite. At a time when SPAR should’ve been feasting on the carcass of Pick n Pay, they’ve been worrying about their own system issues. The true cost of the SAP implementation must be enormous.
Will there be further corporate activity to simplify the group? They are busy with a strategic review in Europe where they are focused on return on capital, so anything is possible here.
Tharisa’s earnings are nearly flat despite the agony in the PGM sector (JSE: THA)
The exposure to chrome really helps
To understand Tharisa’s results for the year ended September 2024, you need to view them in the context of PGM price movements: platinum -3.9%, palladium -37.1% and rhodium -50.3%. In contrast, chrome price increased 13.6%. These price movements are all quoted in US dollars.
Miners focused purely on PGMs have had an horrendous time, whereas Tharisa saw HEPS drop by just 0.7% to US 28.1 cents. This is thanks to the exposure to chrome, which generated $133 million in gross profit in this period vs. just $43.2 million from PGMs. Fascinatingly, the gross profit margins are similar: chrome at 27.1% and PGMs slightly higher at 28.0%!
This shows how lucrative PGMs can be if things improve. It’s just very helpful to have the buffer of chrome along the way. Tharisa is also seen as a solid mining operator, with PGM production relatively flat year-on-year and chrome sales volumes up 15.7%. They are growing in the right commodity.
Transaction Capital has flagged challenges at Nutun (JSE: TCP)
This is worrying– Nutun is all they have left!
After the collapse of Transaction Capital, my brokerage account reflects my highly enjoyable stake in WeBuyCars (and long may that good news continue), as well as the Transaction Capital shares as an eternal hangover in my portfolio. I’m keeping them as reminder of why I do sometimes need to sell things at silly valuations, although it really is hard to walk away from such a winner. I think the trick is a simple business model, something that WeBuyCars has and Transaction Capital certainly doesn’t have. When a simple model runs hard, you can see whether that run is justified. On the trickier stuff, the risks get exponentially higher.
Personal learnings and the benefit of hindsight aside, the latest news from Transaction Capital is a trading statement for the year ended September 2024. The numbers are all over the place, with multiple corporate transactions in this period and loads of restructuring costs. They’ve guided a headline loss from continuing operations of between -R147 million and positive R9 million. The midpoint of that range is clearly negative, so we can safely assume a loss here.
Including all operations (like catastrophe SA Taxi), the headline loss is R2.3 billion to R2.5 billion. I will never stop being astounded by how that business collapsed.
What worries me more than these numbers is the narrative around Nutun, the core business process outsourcing business that will be the only thing of any value left behind in Transaction Capital. They’ve had a poor year it seems. There’s a new management team in place and they have great ambitions for this business, but we’ve heard that before from Transaction Capital and we all know how that turned out.
A poor year for Trematon – and a significant drop in value at Generations (JSE: TMT)
The intrinsic net asset value per share has decreased substantially
Trematon is an investment holding company with a wide range of business interests. The right metric to look at is therefore the intrinsic net asset value (INAV) per share, or management’s view on what the group is worth. This is far more useful than metrics like revenue or operating profit, which are impacted by the size of the underlying stakes and how they are accounted for.
Of course, you can always just follow the cash. The total distribution per share is down 28% for the year ended August. That gives you a clue about what might be coming next.
The INAV per share has dropped by 19%. One of the contributing factors is that a large distribution to shareholders was paid in December 2023, contributing to a R42.5 million decrease in cash. For context, the INAV in 2023 was R992 million. We still have to explain almost another R160 million worth of decrease, so there are clearly challenges in the underlying businesses.
The largest contributor to INAV is Generation Education, where the INAV dropped by R60 million due to lower student number growth estimates in the valuation. Ouch. ARIA Property Group is down R35 million to align to the price at which that stake is being sold. There are negative moves in other businesses as well, generally due to diminished valuations based on performance.
The INAV per share is R3.55 and the current share price is R2.20. Although there’s still a significant gap there (as is typical of investment holding companies), the trajectory is a concern.
Nibbles:
Director dealings:
A director of Capitec (JSE: CPI) exercised options and received 923 shares in the process. This works out to over R3 million in shares. They are net equity settled and the option strike prices were way below the current market price. Capitec has created many rich employees along the way!
Brikor (JSE: BIK) has released its results for the six months to August. Although revenue increased by 18.1%, EBITDA fell by 37.6% and HEPS took a 59.3% knock. The problem is the coal segment, which slipped into a slight loss-making position vs. operating profit of R9.8 million in the comparative period. The bricks segment also went backwards, with operating profit of R16.5 million vs. R17.1 million in the prior period.
Altvest (JSE: ALV) has released its first set of interim results as a listed company, dealing with the period ended August. Revenue was just R3 million and the loss attributable to ordinary shareholders was R6.2 million. These are early days, with the company aiming to list between two and four new investment instruments annually. There are currently three classes of issued preference shares in addition to the ordinary shares.
AYO Technology (JSE: AYO) has released a trading statement for the year ended August. The bad news is that the company is still making losses. The good news is that the losses have gotten smaller. For the year ended August, the headline loss per share is expected to be between -89.46 and -54.16 cents, compared to -176.46 cents in the prior year. They attribute this to cost-cutting initiatives and better margins. Alas, on a share price of R0.49, this puts the company on a P/E of worse than -1x!
At a general meeting to vote on the proposed B-BBEE deal, Coronation’s (JSE: CML) shareholders gave an almost unanimous approval for the transaction. They will therefore move forward with meeting the remaining conditions and implementing the deal.
Murray & Roberts (JSE: MUR) chairman Suresh Kana has resigned, as has Jesmane Boggenpoel. Clifford Raphiri has been appointed as interim chairman of the board. Given the path that Murray & Roberts now needs to walk, that’s going to be a challenging role.
After the latest cancellation of shares that were repurchased over the past 18 months or so, Sabvest (JSE: SBP) has pointed out to the market that the current number of shares in issue is 26.7% off the peak number of shares in issue. Buyback strategies can be powerful things when they are executed properly.
In June, Sanlam Life (Sanlam) acquired a 60% stake in MultiChoice’s insurance business – NMS Insurance Services (NMSIS) – for an upfront payment of R1,2 billion and an earn-out payment of up to R1,5 billion. The NMSIS shares comprise two separate classes of shares, the Ordinary Shares and the AI Ordinary Shares, which entitles the holder to distributions related to the life insurance products. Santam has entered into an agreement to acquire from Sanlam Life its 60% interest in the A1 Ordinary Shares in NMSIS for an initial R925 million in cash with a potential deferred earn-out payment of R1,5 billion in respect of both the A1 Ordinary Shares and the Ordinary Shares.
Old Mutual Private Equity (Old Mutual) has concluded a deal with UK retail sport group Frasers plc, which trades predominantly under the Sports Direct brand. OMPE along with management will exit its investment in Holdsport for an undisclosed sum. Holdsport has a total of 88 stores across South Africa and Namibia and a rapidly growing e-commerce offering. Holdsport’s network will act as a platform to expand Sports Direct across the region. Financial details were undisclosed.
Anglo American has agreed to sell its remaining steelmaking coal portfolio in Australia to Peabody Energy for up to US$3,8 billion. The purchase consideration comprises an upfront cash consideration of $2,05 billion at completion, $725 million deferred over the next four years and a potential $550 million in a price-linked earnout. The deal follows Anglo’s recently announced disposal of its stake in Jellinbah for c.$1,1 billion.
Pamstad, a Botswanan subsidiary of CA Sales, has received the Competition Authority of Kenya’s approval to acquire Trapin, a Kenyan company involved in trade marketing, branding services and distribution of various FMCGs. The proposed transaction will, according to the parties, provide growth capital to the target to expand its business operations in Kenya and Africa.
Rex Trueform has increased its stake in Belper Investments, an unlisted property fund focused on the acquisition, ownership and management of industrial properties within the Western Cape. The Group has acquired a 6.99% stake for R4,7 million increasing its shareholding in Belper to 79.02%.
Equites International, a UK subsidiary of Equites Property Fund, has concluded and agreement with Amazon UK Services to dispose of a distribution centre in Peterborough for a cash consideration of £38,5 million. This equates to a transaction yield of 5.17%. The property is currently let to Amazon with 12 years remaining on the lease.
Suspended Conduit Capital has disposed of its 51% interest in Century 21, South Africa for R7,2 million to other shareholders of Century 21. Operating under an international franchise agreement with Realogy Group, Century 21 is a South African property agency franchisor with 51 franchises.
MAS plc has issued a cautionary note to shareholders advising that it has entered into negotiations with Prime Kapital regarding the acquisition by MAS of Prime Kapital’s 60% interest in PKM Development (DJV). This would give MAS full ownership of the commercial assets in the DJV. If concluded, the acquisition will effectively terminate the DJV arrangements, with MAS and Prime Kapital continuing their respective investment strategies independently.
In its interim results, Deneb Investments disclosed that it had acquired an 80% shareholding in Puretech, a company based in the UK for a purchase price of £800,000. The sellers have the option to sell the retained 20% before end-December 2029.
Zeda has disposed of its interest in Vuswa Fleet Services for proceeds amounting to R2,3 million.
The suspensive conditions in the agreement between Accelerate Property Fund, Fourways Mall Shopping Centre developer Azrapart and MN Georgiou in respect of claims by Accelerate against the parties, were not fulfilled on time. The parties will engage to conclude a new agreement on similar lines.
Unlisted Companies
Harith InfraCo, a strategic partnership between Harith General Partners, Zungu Investments and Mergence Investment Managers, has acquired stakes in a range of energy, digital infrastructure and transport assets from the Pan African Infrastructure Development Fund (PAIDF). Stakes include shareholdings in assets such as Lanseria International Airport and the Kelvin Power Station. The assets were acquired for an aggregate $360 million (R6,5 billion).
The result of Boxer Retail’s initial public offering (IPO) confirmed Pick n Pay’s belief that the listing of the discount retailer would be well received. Boxer’s IPO represents the second and final step of the two-step recapitalisation plan by Pick n Pay. The issue of 157,407,408 offer shares (34.4% of the company’s issued capital), at a subscription price of R54.00 per offer share – at the top end of the pricing range – raised R8,5 billion. A total of 457,407,408 shares were listed on 28 November closing the day at R63.51 per share, close to an 18% increase on the IPO price giving Boxer a market capitalisation of R29,05 billion, larger than that of Pick n Pay and TheSPAR. Pick n Pay will hold 300,000,000 shares or 65.6% of Boxer which it may not reduce for 180 days due to agreed-upon lock-up arrangements, nor will it be entitled to issue Boxer shares for 365 days.
In a move integral to its objective of demerging its initial 78.56% stake in Anglo American Platinum (Amplats), Anglo American, via its subsidiary Anglo American South Africa, has successfully completed an on-market offering of 17,5 million Amplats shares at R548.00 per share. The shares which represent a 6.56% shareholding will reduce Anglo’s stake to 66.7%. Anglo’s remaining shares are subject to a lock-up of 90 days. The R9,59 billion proceeds from the placing will be used to reduce Anglo’s net debt as the group focuses on copper, premium iron ore and crop nutrients in a drive to achieve sustainable attractive returns.
Shareholder of Life Healthcare are to receive a second special dividend this year with the group announcing it will pay 70 cents on top of the final dividend for the year of 31 cents. This takes the total payout to shareholders for the year to end-September to R10,6 billion.
OUTsurance has issued 5,552,510 shares to minority shareholders of OUTsurance Holding (OHL) in exchange for 12,720,025 OHL shares. As a result of the transaction, OUTsurance has increase its interest in OHL to 92.53%.
Shareholders have approved the name change of EOH to iOCO Limited. The change of name will now be lodged with the Companies and Intellectual Property Commission. Salient dates will be published once CIPC registers the resolution.
The JSE has approved the transfer of the listing of Sable Exploration and Mining to the General Segment of Main Board with effect from commencement of trade on 28 November 2024. The listing requirements in this segment are less onerous for the smaller cap firms.
Murray & Roberts applied to the JSE for the voluntary, temporary suspension of trading of its shares. This follows the placing in business rescue of M&R Limited and its trading division OptiPower.
This week the following companies repurchased shares:
Datatec has commenced with a repurchase programme which will be funded using existing cash resources. The repurchases shares will be cancelled in due course, reverting to an authorised but unissued share capital status.
Sabvest Capital has repurchased 850,000 shares for a total consideration of R82 million. The shares will be cancelled and delisted on 6 December 2024.
In October, Anheuser-Busch InBev announced a US$2 billion share buy-back programme to be executed within the next 12 months which will result in the repurchase of c.31,7 million shares. 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 18 – 22, November 2024, the group repurchased 717,573 shares for €37,83 million.
Hammerson plc continued with its programme to purchase its ordinary shares up to a maximum consideration of £140 million. The sole purpose of the buyback programme is to reduce the company’s share capital. This week the company repurchased 885,497 shares at an average price per share of 286 pence.
South32 announced in its annual financial statements released in August that it would increase its capital management programme by US$200 million, to be returned via an on-market share buy-back. This week 800,686 shares were repurchased at an aggregate cost of A$3,02 million.
In line with its share buyback programme announced in March, British American Tobacco this week repurchased a further 305,545 shares at an average price of £29.79 per share for an aggregate £9,1 million.
Prosus and Naspers continued with their open-ended share repurchase programmes. During the period 18 – 22, November 2024, a further 3,143,167 Prosus shares were repurchased for an aggregate €119,34 million and a further 320,132 Naspers shares for a total consideration of R1,32 billion.
Six companies issued profit warnings this week: Visual International, Hosken Consolidated Investments, Copper 360, Brikor, Transaction Capital and Ayo Technology Solutions.
During the week, two companies issued cautionary notices: Accelerate Property Fund and MAS plc.
The International Finance Corporation (IFC) has announced US$605 million in commitments to three projects in Egypt to support economic development across key sectors such as climate finance, sustainable tourism and access to finance for micro, small and medium-sized enterprises.
IFC, the European Bank for Reconstruction and Development (EBRD) and British International investment will each invest $100 million in a bond from Arab African International Bank. This is Egypt’s first sustainability bond and the largest issued by a private bank.
IFC will provide a $155 million loan to Orascom Development (Egypt) to boost green tourism by improving water and energy efficiency at several hotels in El Gouna, along the Red Sea.
The third project is a $150 million loan to Commercial International Bank to support micro, small and medium-sized enterprises in Egypt.
Paratus Group, the pan-African telecommunications and network services provider, has entered the Kenyan market through a joint venture with Nairobi- based IT and ISP company, MoveOn Telecoms. The JV, launched as Paratus Kenya was created to provide and install Starlink services.
Proparco has partnered with Admaius Capital Partners to support medical education in Senegal through an investment in St. Christopher Iba Mar Diop Medical School, one of the largest private medical training institutions in Francophone Africa.
Kenyan Internet Service Provider (ISP), Mawingu, has raised US$15 million in debt and equity funding to expand its network across East Africa through the acquisition of Tanzanian ISP, Habari. InfraCo Africa and FMO, both existing investors in Mawingu, invested an additional $4 million which enabled the ISP to secure $11 million in long-term senior debt Cygnum Capital’s Africa Go Green Fund.
FMO, the Dutch Entrepreneurial Development Bank, and ElectriFI, an EU impact investment facility managed by EDFI Management Company, have provided US$9 million in debt funding to Hydrobox, to support eight small hydro projects across four mini-grids in Kenya.
EFG Corp-Solutions, Bank NXT, EG Bank and other lenders are providing Sylndr, an online used car marketplace, with a EGP370 million asset-backed working capital facility. The financing will be used to support its growth strategy and operational efficiency.
Kenya’s STIMA has received an undisclosed investment from early-stage investment firm, Renew Capital. The STIMA all-in-one platform assists e-mobility companies with managing their battery fleets. The software is used by companies in Kenya, Nigeria and Benin.
Tanzania’s largest bank, CRDB Bank has refinanced its syndicated term loan facility, first launched in 2022, for the third time. The facility was established to unlock working capital and support the bank’s lending portfolio for the SME sector in Tanzania and Burundi. This third raise, initially targeted US$100 million but was oversubscribed with total commitments of $247 million. The new $150 million term loan facility is split between a $45 million two-year tranche and a $105 million one-year tranche facilitated by 17 lenders across Africa, the Middle East, Europe and the UK.
BluePeak Private Capital has announced a US$15 million sustainability-linked investment in Tunisia’s Sancella, one of the largest manufacturers and distributors of disposable hygiene products in the Maghreb region and Francophone West Africa.
FMO (acting as lead arranger), British International Investment, Proparco, and ILX, announced a working capital facility of up to US$90 million for Robust International, a leading agri-commodity trader headquartered in Singapore. The funds will enable Robust to buy sesame and cashew nuts directly from cooperatives, aggregators and local farmers to support operations at its new processing facilities in Burkina Faso, Ivory Coast, and Mozambique which are expected to create over 1,100 direct jobs at the plants which will support up to 600,000 smallholder farmers.
BCME Capital Investments’ Capital Venture Fund is investing 5 million dirhams in Morocco’s PTS (Premium Technology & Service) to accelerate the starup’s development and growth in the digital payments sector.
Kwararafa Africa, along with TY Holdings and Notore Chemical Industries (Mauritius), the core shareholders of NGX-listed Notore Chemical Industries Plc, have offered to buy out the minority shareholders through a scheme of arrangement. Financial terms of the offer are yet to be disclosed.
There are several pricing mechanisms which can be applied when purchasing or disposing of the shares of a company or a business (Target). In this article, we discuss some of the common pricing mechanisms and key considerations for buy-side and sell-side transactions.
Locked Box
The purchase price in a locked box mechanism is based on financial information derived from the financial statements or management accounts at a point in time. These sources of information, along with other financial information such as forecasts, are used to calculate both enterprise value and equity value. The date of the financial information constitutes the agreed date of the “locked box” (Locked Box Date), which is usually the end of a most recent financial year. Financial statements would typically be audited, thus giving credence and credibility to the information. The purchase price will be agreed and fixed when the parties sign the transaction agreement (Signature Date), and will reference a locked box balance sheet at the Locked Box Date.
From the Locked Box Date (or even Signature Date), the seller or Target is prohibited from making certain payments which will extract value from the Target. Such prohibited payments may include dividends, management fees, and non-operational payments known as “leakage”, while payments in the ordinary course of business will be permissible and are regarded as “permitted leakage”. In spite of payment only being made by the buyer at a later date, risk and benefit in relation to the Target passes to the buyer on the Locked Box Date.
The purchase price is often payable on the closing date, when ownership of the Target transfers from the seller to the buyer in terms of the transaction agreement (Completion Date). As the purchase price is fixed as at the Locked Box Date, the period between then and the Completion Date may be an extended period of time (Locked Box Period). Therefore, where profits increase in the Target during the Locked Box Period, such profits will be locked in the “locked box” and lost by the seller. The converse also holds true, making it even more important that a robust valuation is conducted for both parties to assess, in their view, the value of the Target.
Although not common, the sell-side may negotiate value accrual based on (i) additional cash flow generated by the Target and/or (ii) interest on the purchase price during the Locked Box Period. The buyer may protect itself by crafting walk-away rights in the transaction agreement, such as the occurrence of a material adverse change in the Target.
Completion / Closing Accounts
When utilising the completion accounts as a pricing mechanism, the seller will prepare a preliminary closing balance sheet to indicate pertinent balances, such as net debt and working capital, et cetera, before the Signature Date. The estimated purchase price will be paid in full or partially on the Closing Date and on the Completion Date, and risk and ownership in relation to the Target will pass at this point or when the balance is paid in full, depending on the provisions of the transaction agreement.
The transaction agreement will detail a timeline within which the estimated purchase price will be finalised, based on final completion accounts to be provided by the seller to the buyer post the Completion Date. The buyer is provided an opportunity to accept or dispute such final completion accounts. Taking account of the pertinent balance sheet items, any difference between the estimated purchase price and the final purchase price is either paid by the buyer or reimbursed by the seller to adjust the purchase price.
Unlike with the locked box mechanism, the equity value is not fixed. It is finalised post the Completion Date, to adjust the purchase price based on the completion accounts.
Earnout
An earnout, as a pricing mechanism, allows the seller of the Target to receive additional compensation if the business of the Target meets specified financial metrics during a defined period. This is known as the “earnout period”, which is usually between one to three years. These financial targets are typically based on metrics such as earnings before interest, taxes, depreciation, and amortisation (EBITDA) or net profits (Financial Targets). The transaction agreement will define the metrics for calculating the earnout, with the final determination of whether the financial metrics are achieved being based on the results reflected in the Target’s annual financial statements.
The earnout mechanism eliminates uncertainty for the buyer as they only pay a portion of the purchase price upfront, with the balance based on future financial performance of the Target, usually at the end of each financial year during the earnout period. This holds the seller accountable for financial forecasts that it may have provided to the buyer which were used in determining the valuation and purchase price. The earnouts are usually paid in cash, but shares are not uncommon. Unlike a locked box mechanism (subject to negotiating value accrual), the seller benefits from future growth during the earnout period, depending on how the earnout is structured.
The method for calculating Financial Targets must be specified clearly in the transaction agreement to prevent disputes, as earnouts often lead to post-closing disputes that can escalate to litigation or arbitration, similar to the completion accounts mechanism.
The earnout calculation, period, and the management team post-acquisition must be carefully negotiated and detailed in the transaction agreement, as these factors will contribute to the Target’s ability to meet its Financial Targets. The transaction agreement should also cater for any potential anomalies, accounting complexities and recognition criteria (if applicable), ensuring that all parties are aligned as to how the Financial Targets will be measured.
Concluding which mechanism is appropriate for a particular transaction requires consideration of the business / industry of the Target, complexity, timing and cost, amongst other factors. The locked box may be preferred for transaction simplicity in respect of time and cost, whereas completion accounts and earnouts as mechanisms may be preferred because the purchase price paid aligns with the actual company / business value based on adjustments after the Completion Date.
Transaction advisors can assist parties to navigate each of the mechanisms and decide which one is appropriate for a specific party, and the Target being acquired or disposed of in a transaction.
Thandiwe Nhlapho and James Moody are Corporate Financiers | PSG Capital
This article first appeared in DealMakers, SA’s quarterly M&A publication.
South Africa’s private equity (PE) sector is looking to realise a notable influx of deal activity and increased investment opportunities over the next year, prompted by a resurgence in interest from both local and international investors across various sectors.
In South Africa, it is hoped that the recently formed Government of National Unity will lead to greater market stability and an improved economic climate. A move towards lower interest rates in developed markets will also increase risk appetite for investments into emerging markets.
In our view, the following sectors present investment and growth opportunities in South Africa:
ESG and impact investing
Like most commercial sectors, the rise of environmental, social and governance (ESG) considerations has similarly permeated Africa’s PE environment. Investors in PE funds are increasingly imposing sustainability and social development requirements on PE firms, and require that they take these factors into account as part of their investment objectives and throughout the life cycle of their investments. This is especially pertinent for PE firms with commitments from development finance institutions.
Impact investing is particularly relevant in South Africa, where complex social issues such as poverty, inequality and unemployment, remain rife. Investments into sectors such as affordable housing, education, food and healthcare have the potential to create long-term value for both investors and society, making South Africa attractive to PE firms with an impact/ESG mandate.
Information and communications technology (ICT)
South Africa has one of the largest ICT sectors on the continent, so it is unsurprising that PE opportunities in the sector are on the rise.
In recent years, South African subsidiaries of foreign companies and South African-based companies have supplied most of the new fixed and wireless telecom networks established across the African continent.
Additionally, there are increasing opportunities within South African organisations looking to utilise cloud computing’s cost-effective and efficient networks, such as Software-as-a-Service and Infrastructure-as-a-Service. These recent technological advancements and rising demand within South Africa and the rest of the African continent have created a fruitful PE investment environment in the ICT sector.
In this space, Bowmans recently acted for Convergence Partners Digital Infrastructure Fund in its acquisition of 100% of the issued shares in Datacentrix Holdings Proprietary Limited alongside the Datacentrix management team. Datacentrix provides ICT integration services and solutions to the public sector and blue-chip corporates in South Africa, ensuring their success and sustainability into the digital age.
The team also advised a consortium of buyers comprising the IDEAS Infrastructure II Partnership, STOA Infra & Energy and Thebe Investment Corporation Proprietary Limited in relation to the acquisition of the shares held by Actis LLP in Octotel Proprietary Limited and RSAWeb Proprietary Limited. Octotel is a network infrastructure provider focused on the delivery of world-class fibre infrastructure.
Fintech
South Africa has become a leader in African financial innovation, and the fintech market in South Africa presents promising investment opportunities. Payment solutions have continued to dominate financial technology innovation in the country, attracting substantial investments from PE firms. This is amplified by South Africa’s relatively low costs and large market offering in the tech space.
Bowmans recently advised Swissquote Group Holding on its acquisition of 100% of the shares in Optimatrade Investment Partners. Swissquote provides a range of online financial and trading services, and Optimatrade is a South African regulated Financial Services company that focuses on making offshore investing easier and more accessible for South African investors and traders by partnering with global online financial and trade services providers.
Renewable energy
PE funds are increasing investments into renewable energy, green hydrogen, battery storage and smart power technology projects across the continent. Green energy solutions are essential to increase access to a decarbonised, decentralised energy supply.
This has become crucial in light of South Africa’s electricity crisis and the detrimental economic effect that prolonged load-shedding had on the economy.
PE firms have been successfully investing in independent power producers (IPPs) that generate renewable energy that is then sold to Eskom. The lifting of licensing requirements for large-scale generation projects and these efforts to address the electricity crisis have stimulated significant growth in South Africa’s renewable energy market. As a result, renewable energy capacity has expanded rapidly, resulting in numerous opportunities for investment within the sector.
Bowmans recently advised the Evolution III Fund – an Africa-focused climate impact investment fund managed by Inspired Evolution – in relation to its investment in Equator Energy Ltd (a commercial and industrial solar provider in East Africa) via the acquisition of 33.3% of the issued shares in Energy Pulse Ltd, the majority shareholder of Equator Energy.
Inspired Evolution specialises in clean energy infrastructure, energy access, and resource efficiency investments.
Bowmans also recently acted for Adenia Partners in relation to (i) its acquisition of a majority stake in the Herholdts Group, a leading distributor of electrical and solar equipment in South Africa, and (ii) its indirect acquisition of Enfin AM and Enfin Developers, a South African-based solar financing solutions provider.
Agribusiness
Agribusiness has come to the fore as a profitable investment sector in South Africa. For context, the sector’s overall contribution, including the value chain, was around 10.3% of South Africa’s gross domestic product at the end of 2023.
The value of these investments is compounded by the positive impact of technology and big data. Considering climate change and water shortages, the agricultural sector is at an advantage by implementing new technology that efficiently manages and ensures an optimum environment for agricultural growth, ultimately yielding a valuable investment return.
As a result, these resources continue to contribute to South Africa’s economic resilience and attractiveness as a PE investment hub, promising long-term opportunities for growth and development in a resource-rich environment.
Bowmans recently advised US private-equity firm Paine Schwartz Partners’ portfolio company, AgroFresh Inc. – a US-based company and global leader in the post-harvest agricultural space – on its acquisition of South Africa-registered Tessara (Pty) Ltd from private equity firm Carlyle Group Inc. This transaction was recently awarded ‘Private Equity Deal of the Year’ at the South African DealMakers Awards.
Bowmans also acted for Phatisa in relation to its investment in the Lona Food Group, a South African-based citrus grower and exporter.
Supply chain logistics
According to Mordor Intelligence1, the size of the freight and logistics markets in South Africa was US$13,79bn in 2024, and is expected to reach $19,9bn by 2030, growing at a compound annual growth rate of 6.29% during the forecast period.
The increasing demand for supply chain and logistics services is partly due to the predicted boost in intra-African trade, which is slowly starting to take off after the implementation of the African Continental Free Trade Area (AfCFTA) in 2021.
Further, global trade is recovering as interest rates begin to decrease and economies improve. The development of digital logistics solutions and telematics systems has also increased efficiency in supply chain logistics, boosting interest in the sector and providing good opportunities for PE funds to exit their investments.
Bowmans recently advised on the disposal of a minority shareholding in a significant warehousing, distribution management, and logistics company.
Consumer goods and retail
While high inflation, interest rates and unemployment have put pressure on consumer spending in the last few years, interest rates are now decreasing and consumer spending is on the rise. Further, with AfCFTA now operational, free trade across the continent is expected to increase in the next few years. All of this has boosted PE investment in the consumer goods and retail sector, with investors looking for opportunities to acquire companies on a growth trajectory.
Bowmans recently advised Capitalworks on its acquisition of 100% of the shares in The Building Company (Pty) Ltd, a South African company offering building materials, hardware and related products to retail customers.
Healthcare
PE investors in the healthcare sector have been capitalising on the growing demand for quality healthcare services and the need to address the healthcare infrastructure gap in South Africa.
Investments are being directed towards the building of hospitals and clinics, healthcare insurance services, and related industries, such as medical equipment and pharmaceutical manufacturing. The demand for digital healthcare is also booming, with the sector having a considerable impact on providing continuous access to healthcare for South Africans in rural areas.
Bowmans recently advised Next176 (Pty) Ltd on its agreement for future equity with Kena Health (Pty) Ltd. Next 176 is a venture-building strategic investment company that focuses on sustainable investments that impact lives. Kena Health offers a technology-driven healthcare platform in South Africa.
The PE landscape in South Africa continues to evolve rapidly, driven by changing global and local market dynamics, technological advancements, and shifting investor preferences. Investors in South Africa still have challenges to overcome, but optimism surrounding the country’s new government and renewed political landscape, its diverse high-growth sectors, ambitious workforce and rich natural resources are just some of the key areas of opportunity for PE investments in South Africa.
Zimbabwe’s mergers and acquisitions (M&A) landscape continues to grow, driven mainly by its abundant mineral resources — particularly lithium and gold — the capital needs of local businesses, and government efforts to attract foreign direct investment (FDI). Sectors such as mining, energy, agriculture and manufacturing continue to attract the most M&A deal flow, as investors aim to capitalise on Zimbabwe’s untapped natural resources and its strategic location within Southern Africa.
M&A transactions are vital for businesses looking to expand, diversify or enter new markets in Zimbabwe. However, navigating the country’s regulatory landscape can be complex and requires thorough due diligence.
This article, the first in a three-part series, outlines the key regulatory bodies governing Zimbabwe’s M&A environment, providing essential considerations for businesses and foreign investors.
KEY REGULATORY BODIES IN ZIMBABWE’S M&A LANDSCAPE
Several regulatory authorities are crucial for ensuring compliance in Zimbabwean M&A transactions. The most significant of these include:
Registrar of Companies and Other Business Entities
Role and key functions: The Registrar of Companies and Other Business Entities, established under Section 6 of the Companies and Other Business Entities Act [Chapter 24:31], oversees the registration and deregistration of companies, as well as various administrative tasks, such as company name changes, updates to directors, and changes in share capital and physical addresses. Due diligence on local entities must go through the Registrar’s office, and anyone seeking to verify a company’s existence must consult the Companies Registry.
The Reserve Bank of Zimbabwe (RBZ)
Role and key functions: The RBZ plays a crucial role, particularly in cross-border M&A transactions involving foreign investors and/or financial obligations. Established under the Reserve Bank of Zimbabwe Act [Chapter 22:15] and exercising authority under the Exchange Control Act [Chapter 22:05], the RBZ must approve any acquisition of shares by foreign residents. The RBZ also oversees adjacent processes, such as the repatriation of profits, divestments, and the contracting of foreign financial obligations, which is essential to maintain Zimbabwe’s economic stability by managing foreign currency reserves.
Competition and Tariff Commission (CTC)
Role and key functions: The Competition and Tariff Commission or CTC was established in terms of the Competition Act (Chapter 14:28), and oversees the prevention and control of restrictive practices, the regulation of mergers, the prevention and control of monopoly situations, and the prohibition of unfair trade practices.
M&A transactions involving parties whose combined annual turnover or assets exceed US$1,2 million must be reported to the CTC within 30 days of the merger agreement. This regulatory step ensures market competition is preserved, and that mergers do not result in unfair market dominance. Failure to notify the CTC may lead to steep penalties, including (but not limited to) the complete reversal of the transaction in question. This makes the reporting essential for timely and conclusive transaction closure.
An interpretation of Zimbabwe’s laws generally provides that all mergers that involve the acquisition of a controlling interest in a competitor, supplier or customer, and which breach the above financial threshold, must be notified.
Ministry of Industry and Commerce
Role and key functions: The Ministry of Industry and Commerce, working in conjunction with the Indigenisation and Economic Empowerment Unit, is a critical office to consider when seized with a transaction involving an economic sector reserved for indigenous Zimbabweans.
In terms of the Indigenisation and Economic Empowerment Act (Chapter 14:33), foreign investors are precluded from conducting business in certain economic sectors without an exemption from the aforesaid Ministry and Unit. The reserved sectors include retail and wholesale; transportation: passenger buses, taxis and car-hire services; barber shops; employment agencies; estate agencies; and tobacco processing, grading and packaging, to mention a few.
Zimbabwe Investment and Development Agency (ZIDA)
Role and key functions: Established under the Zimbabwe Investment and Development Agency Act (Chapter 14:37), ZIDA serves as the primary body for the promotion and facilitation of foreign investment in Zimbabwe.
The agency grants investment licenses which provide legal protections, such as the right to repatriate funds; protection from expropriation; and safeguards against discriminatory practices. Additionally, ZIDA is responsible for establishing and regulating special economic zones and appraising, as well as recommending the approval of Public Private Partnerships with the Government of Zimbabwe to the Cabinet.
For M&A professionals and dealmakers alike, ZIDA’s One-Stop Investment Services Centre simplifies the regulatory process by providing a centralised point for approvals, thereby streamlining the transaction process. The One Stop Investment Services Centre is akin to the One Stop Centre of the Rwanda Development Board or, in the case of the Tanzanian Investment Centre, the One Stop Facilitation Centre. This setup significantly enhances the ease of doing business in Zimbabwe, making it more attractive to foreign investors seeking entry through M&A.
Zimbabwe Revenue Authority (ZIMRA)
Role and key functions: The Zimbabwe Revenue Authority is the tax man. In the context of M&A, ZIMRA plays an essential role by ensuring tax compliance, particularly under the Capital Gains Tax Act (Chapter 23:01). Under Zimbabwean law, no transfer of shares shall be valid without a duly issued capital gains clearance certificate; thus, it is essential to apply for same before consummating an M&A transaction.
Once regulatory approvals are secured, M&A transactions can proceed to completion. However, it should be noted that different regulatory bodies may be involved, depending on the exact nature of a transaction. For instance, acquiring a controlling interest in a telecommunications company requires approval from the Postal and Telecommunications Regulatory Authority, while buying a substantial stake (at least 5%) in a financial institution requires approval from the Registrar of Banks.
In conclusion, although navigating the regulatory frameworks of M&A is a complex and often time-consuming endeavour, with proper preparation and an understanding of the regulatory landscape, businesses can successfully execute M&A transactions in Zimbabwe.
Tapiwa John Chivanga is a Partner | Scanlen & Holderness
This article first appeared in DealMakers AFRICA, the Continent’s quarterly M&A publication.
Unsurprisingly, Anglo sold Anglo Platinum shares at a discounted price (JSE: AGL | JSE: AMS)
This is Anglo’s idea of an orderly process vs. what BHP wanted
The platinum market is hugely depressed at the moment, so it’s not a great time to be trying to sell a significant chunk of shares in a platinum miner. Still, Anglo American decided that this is the right time to work towards a demerger of Anglo American Platinum, so they went ahead with a sale of 6% in the company anyway.
The price achieved from institutional investors? R548 per share. For context, that’s 12% below the price that Anglo American Platinum closed at last Friday. Anglo American doesn’t seem too bothered, as the company has raised R9.6 billion in the process and is marching forward towards its era of focusing on other commodities. If you keep in mind that corporate executives want a war chest and shareholders want value creation, you’ll understand how decisions like these can end up being made.
If Anglo is willing to get out of Anglo American Platinum in this fashion, I can’t wait to see how modest the price for De Beers will be one day!
The next step is the demerger of Anglo American Platinum in 2025, as Anglo American still holds 66.7% in the company after this disposal. They held as much as 78.6% just a few months ago before starting to sell shares in the market in two tranches.
Argent’s offshore expansion strategy means the strong rand has hurt growth (JSE: ART)
But the overseas businesses are performing well, which is what counts
Argent Industrial has been outspoken about the nonsense we’ve been dealing with in South Africa for the past few years. They also voted with their wallets, investing in various offshore businesses. This works well when the rand is weakening and bites you when it strengthens. The important thing for investors is to avoid getting caught up in currency moves that are beyond Argent’s control, focusing instead on how the businesses are actually doing.
Group revenue fell 3.3% for the six months to August and operating profit increased by 1.7%. HEPS moved just 3.7% higher to 231 cents. Although the South African segment saw profit before tax increase from R43.5 million to R56.4 million, the offshore segment experienced a drop from R128 million to R119.5 million thanks to the rand.
Argent misses a trick though, as the management commentary in the financials doesn’t include anything around constant currency growth in the offshore businesses. If rand strength continues, they need to get better at telling the story. Lovely as it is to see the UK and America performing in line with expectations, the market prefers seeing percentages rather than long sentences.
Given how blunt Argent has been about South Africa, it’s great to see them noting an expectation for the local economy to improve by February 2025 thanks to interest rate decreases. Let’s hope!
Brikor’s profits have dropped (JSE: BIK)
We should have detailed results soon
Brikor has released a trading statement for the six months to August. It doesn’t look good, with HEPS expected to drop by between 56% and 63% for the interim period.
This puts it on a range of 1.00 to 1.20 cents per share, so at least there is still a profit! For context, the share price is 17 cents, although there’s almost no liquidity in this stock.
Detailed results are due to be released before the end of November.
Even in the best year we’ve seen in South Africa in ages, Brimstone has gone backwards (JSE: BRT)
The net asset value per share has decreased this year
If you enjoy watching your money go sideways, then Brimstone is worth considering. The discount to intrinsic NAV is substantial and the intrinsic NAV per share somehow managed to be lower as at September 2024 than it was in December 2020 during the pandemic!
The fully diluted intrinsic NAV per share is R10.83. The current share price is R4.91. Spot the problem?
Here’s the other problem: the fully diluted intrinsic NAV was R11.88 at the end of December 2023, so it managed to decrease 8.8% over nine months despite the South African market experiencing a strong rally.
The saving grace for the share price has been a reduction in the discount to NAV in the market, so the share price went up over that period despite the intrinsic NAV dropping.
EOH’s name change to iOCO has been approved (JSE: EOH)
The announcement includes a positive narrative around recent performance
EOH’s shareholders have approved the change of name to iOCO, bringing to an end a difficult era for the company that led to the EOH name being synonymous with poor governance in South Africa and a time when relationships between government and corporates were less than savoury. Those days are hopefully behind us as a country.
They are certainly behind iOCO (yes, I’m only using the new name from here onwards), with the group cleaned up and focused on the future. Whilst I still struggle to get excited about any kind of investment case here, the announcement with the results of the vote at the AGM also included an encouraging market update at the bottom.
They note a strong start to the financial year, driven by not just the cost-cutting initiatives, but also improved gross margin. They go on to talk about being on track to achieve the set targets and strategic goals.
That sounds like a good start to a new era!
Trading density growth is boosting Hyprop (JSE: HYP)
The foot count trend in South Africa is worrying though
Hyprop has released a pre-close operational update dealing with the four months to October. Someone really needs to tell them that we don’t need several paragraphs dealing with the names of stores that have opened in the malls. Nobody really cares – we just want to see the numbers.
For example, a drop in office vacancies from 27.4% to 17.7% is important information. A positive weighted average reversion rate of 6.7% is also important. These are the stats we want.
In South Africa, trading density is up 3.9% for the four months and tenant turnover increased 5.2%. Foot count tells a less promising story, down 0.2% over the period with August as the only strongly positive month for some reason. It feels like people are buying more and more stuff online in South Africa, which is something to keep an eye on for premium malls over the long-term.
Rent collections are up by a juicy 14.1% for the four months in South Africa, but that’s due to the inclusion of the Table Bay Mall acquisition. I still think they overpaid for that asset, but time will tell.
In Eastern Europe, things still look excellent with a vacancy rate of just 0.2% and trading density up 9.4%. Foot count is also positive there, up 1.6% over four months. Rent collections are up 7.9%.
The loan-to-value ratio has improved to 35.2%, driven by the disposal of the sub-Saharan Africa portfolio. This gives them confidence to approve R550 million for capital expenditure in the South African portfolio for this financial year. Even with that expectation, they are looking to increase the dividend payout ratio going forward.
Nampak swings into profitability (JSE: NPK)
And yet the share price dropped 12.5% on the day of this announcement
The efforts to save Nampak have been quite something to watch. After selling off non-core assets and getting the balance sheet to the point where there will actually be a Nampak going forward, it’s now about delivering sustained and growing profitability.
A trading statement for the year ended September paints a promising picture. HEPS from continuing operations is expected to be between R31 and R35, a vast improvement on the rather daft headline loss per share of over R390.05 in the comparable period.
For total operations, HEPS will be between R12.50 and R14.50, again much better than the even more ridiculous loss of R468.12 in the comparable period.
Detailed annual results are expected to be released on 2 December. Nampak’s share price is up 145% year-to-date, though it did take a 12.5% knock on the day of this announcement to close at just over R400 per share.
Based on Tsogo Sun’s numbers, casinos are becoming less desirable assets (JSE: TSG)
Is online sports betting scratching the itch for more people?
Traditional gambling assets have been under pressure for a while now. I remember how these casinos were bustling 15 years ago, when I would sometimes play poker to supplement my student income or spend money on blackjack as part of a fun night out. These days, I literally do not know a single person in my life who goes to the casino. Well, unless they do so quietly, which then proves my point anyway.
Times change and so do consumer preferences. Online gambling and sports betting seem to be all the rage, leaving casinos with high fixed cost bases and declining economics. Tsogo Sun’s results for the six months to September reflect income down 4%, adjusted EBITDA down 10% and HEPS down 15%. Would you bet on that improving?
Despite the drop in HEPS, the interim dividend per share has been retained at 30 cents. HEPS came in at 73.1 cents, so they have enough space in the payout ratio to avoid committing the biggest sin of all for corporates: cutting the dividend.
The best casinos (like the flagship Montecasino asset) are still doing reasonably well. Casinos in outlying areas are really struggling. Although Tsogo is investing in the online gambling space and getting a piece of that action, they sit with a large portfolio of fixed assets that seem to be losing their shine.
Nibbles:
Director dealings:
An example of a director putting in place a financing or derivative structure can be found at Discovery (JSE: DSY), where the founding directors do it regularly. The latest example is Barry Swartzberg, where a collar structure has matured and the Discovery share price is above the strike price on the call options, leading to Swartzberg being forced to sell R157 million worth of shares. Adrian Gore also features, with sales worth R101 million. This is what it looks like to give away upside in order to gain downside protection! Gore has entered into a further collar structure, with a put option at a strike of R166.61 per share (downside protection) and a call option at a strike of R297.94 per share (giving away upside above this level).
An associate of a director of EOH (JSE: EOH) bought shares worth R10.725 million.
A prescribed officer of Thungela (JSE: THA) sold shares worth R5.4 million.
The CEO, CFO and company secretary of Mr Price (JSE: MRP) received share awards and all sold the entire lot (not just the taxable portion) for R4.5 million. At this high P/E multiple, I would do the same. The momentum in the Mr Price share price has been a little crazy this year.
The CFO of Lewis (JSE: LEW) is “rebalancing his portfolio” with a sale of shares worth R2.3 million.
An associate of a director of Afrimat (JSE: AFT) has sold shares worth R1.9 million.
Two directors of a major subsidiary of RFG Foods (JSE: RFG) received share awards and sold the whole lot for R570k.
Zeder (JSE:ZED) announced that the disposal of Novo Fruit Packers for R195 million (plus the value of stock of R1.7 million) has met all conditions precedent and that the selling price has now been received.
Accelerate Property Fund (JSE: APF) needs to go back to the drawing board for the related party settlement agreement dealing with the claims by Accelerate against ex-CEO Michael Georgiou and vice versa. This relates to the development of Fourways Mall. The suspensive conditions in the agreement were not fulfilled on time, so the parties need to conclude a new agreement which they say will be on substantially the same terms.
After recent transactions and based on the terms of the cession of voting rights agreement between Titan Premier Investments (the Christo Wiese investment vehicle) and Brait (JSE: BAT), Premier Group (JSE: PMR) has announced that Titan’s beneficial interest in Premier has decreased to 44.5%. The direct economic interest remains unaffected at 31.5%.
Three directors of Stor-Age (JSE: SSS) have put in place a new loan facility, secured by the pledge of shares. It bears interest at prime less 0.75% and has a 36-month term. Total facilities for the three directors come to around R58 million. This is common practice in the property sector. It could lead to director dealings in future, depending on how the loan vs. share price plays out.
Despite a tremendous amount of noise around governance issues at Quantum Foods (JSE: QFH) and disputes with shareholders, Northam Platinum (JSE: NPH) has appointed Wouter Hanekom, the current chairman of Quantum Foods, to its board as an independent non-executive director. Hanekom has plenty of corporate experience, but it’s interesting that Northam is happy to potentially be dragged into that mud through this appointment. The board obviously really wants him there.
Rex Trueform (JSE: RTO | JSE: RTN) is increasing its stake in Belper Investments by 6.99% to 79.02%. This is an unlisted property fund focused on the Western Cape and specifically Epping. The price for the additional 6.99% is R4.7 million, despite Belper being in a loss-making poisition.
Datatec (JSE: DTC) will commence its share repurchase programme on 28 November, so the company itself will be on the bid in the market.
Visual International Holdings (JSE: VIS) has reported results for the six months to August. With the share price at R0.03 and a market cap of R12 million, very few people are interested here. It doesn’t help that the operating loss increased from R3.75 million to R5.2 million.
In this episode of The Trader’s Handbook, Shaun Murison from IG Markets South Africa joined me to discuss the advanced tools available on the IG platform that empower traders to make informed decisions. From back-testing strategies and market scanning with Pro Screener to exploring client sentiment, alerts, and algorithmic trading, this episode highlights the cutting-edge features that simplify and enhance trading.
Whether you’re new to trading or looking to refine your approach, this episode provides practical insights into leveraging technology to stay ahead in the markets. To open a demo account, visit this link.
Listen to the episode below and enjoy the full transcript for reference purposes:
Transcript
The Finance Ghost: Welcome to episode 12 of The Trader’s Handbook. We’ve had a lot of fun on this podcast series. Shaun Murison of IG has been our guest on each show and there’s been so much to learn from him and from the team at IG as well.
In our last episode we covered demo accounts and why they are just so important for people to go and cut their teeth with monopoly money as I like to call it, before you go and actually have a funded account. Rather go and make the mistakes, learn the system, go and just get your head around how this whole thing works in a demo environment. Of course, the real benefit there is that you are getting access to exactly the same system that you would have if you had real money in your account. You get to just practice in the meantime.
That’s why in this episode we will be focusing on the technology sitting behind that system, some of its features, some of the good stuff that you can look forward to if you are an IG client or if you just want to go and open that demo account – go and check it out, if you are interested in the demo account, go to IG.com, it should autodirect you to whichever country you’re in. You’re probably listening to this in South Africa, so it’ll redirect you there. Go and check it out, go and open a demo account and start trading.
So Shaun, today is all about the tech of the trade as opposed to the technicals of the trade, which is how we’ve usually been finishing these episodes with some technical analysis. I think we’ll give that a break on this episode and just focus on what the system can actually do. Thank you as always for joining me for this. I’m looking forward to it.
Shaun Murison: Great to be back again.
The Finance Ghost: So I think first up, let’s start with this concept called back-testing. Now this is something I’ve certainly heard people talk about before. Basically the idea here is that you take a strategy that you think might work or some kind of approach to the markets, and then you want to actually see if it has any merit. And how do you do that? Well, the past is quite a good predictor of the future, in this case because I guess it’s just how people have behaved in response to a certain set of inputs. So that’s really what back testing is, trying to figure out how to actually go back and see what happened for a set of inputs. It’s quite a complicated thing, but apparently you guys do have some functionality there around backtesting, Shaun.
I think let’s start there. Let’s start with something really juicy. I’m keen to know what’s on the system for that.
Shaun Murison: Yeah, so IG has a function, a back-testing function on our advanced charts. There’s a saying that patterns often reoccur in markets and I think back-testing can help us identify those patterns. There are technical tools, so you could take a technical strategy, maybe looking at moving averages to gauge trend, we’ve talked about that, and an oscillator, like a stochastic to maybe trigger timing of an entry. Well, does that sort of system work?
You can test that over X amount of years on a particular market and see whether that has a statistical edge. Certainly what you’re doing there is you’re building a mechanical strategy and not only just the technicals – you can add in stop losses and take profits and you can tweak that system until you’re comfortable to use a system like that.
So it’s really about putting something under the microscope using our automated back-testing features. The really cool thing about that is that you don’t actually have to be a programmer. A lot of these software systems, you have to know how to program and look at things like Python and all these different languages to do that. Here, it’s really just if you can left click, you can do it. You click on the chart, you click on the indicator and you say you want to buy when it does this and you want to sell when it does that. So it’s an automated function, it’s called assisted creation. Really fun to use and quite a big rabbit hole once you get started.
The Finance Ghost: Yeah, I can believe it. That does sound like quite a fun way to spend a bit of time. A good reference there to the rabbit hole because I can imagine it’s quite easy to get swept away by some of this stuff. I guess the back-testing is all good and well because that’s trying to figure out: would this have worked? But of course, that’s not how you make money. You have to make money by actually trading and then getting it right.
And that, I think, is where the market scanning and screening tools would come into it. So screening is the terminology that I’m more accustomed to, obviously more of an investment lens from my side. That’s really looking at, just as an example, something like: I want to find things on a P/E multiple of less than 15x, growing earnings at more than 15% a year on the US market. Okay, great. You can plug those three things into an investment system and you can go and find all the companies that fit into that, and then you have to actually do the work to get through the noise, etc.
Now, in the world of trading, scanning is also about finding ideas. So it’s kind of similar to screening in investing, but I would imagine using very different metrics because as I’ve certainly learned on this series, trading is far more about chart patterns and technicals than it is about the underlying fundamentals of the business. So how does this work in the trading environment, this market scanning tool?
Shaun Murison: Well, you have access to both of those types of tools. And we do actually call it – maybe it’s me that calls it a scanning function, but we do call it Pro Screener. So we have a fundamental screener, so you can search for companies based on e.g. dividend yields, earnings yields in international markets. Still to bring it to the local markets, but we do have that available on the platform.
Then when you look at the technical side of things, we have something called a Pro Screener. So if you’ve developed a technical strategy that you’re happy with, I’ll use that example of having a moving average to gauge trend and then maybe using an oscillator like a stochastic to trigger entries and exits – you can now go into the market at a click of a button, you build the scan again, you don’t have to program it. And you can run it across all the instruments, across the world or locally. And it’ll trigger, it’ll pick up where your criteria for entering or exiting the market have triggered in the market. You can actually use that as a watchlist, so it will update real time, live – so it fits in well with the back-testing we talked about, you might develop a strategy and think I’m happy with this type of strategy. And then you can go and scan the market using the Pro Screener function to see where that criteria has triggered in the market. You don’t have to sit and manually look through each chart. You can just automate that process.
The Finance Ghost: So scanning, screening, tomato, tomato, all the same stuff really, but ultimately just a different lens and a different outcome. Investing versus trading, that is how you find ideas. You’ve got to have your system and then you actually go through and scan for them. And it’s very, very powerful tool.
But it’s also not the only way to generate trade ideas because within the IG platform there are also trade ideas that are generated by a third party. I have seen some of that. Just to confirm with you, how does that work and how often do these ideas come out, who’s actually doing them? And is it mainly South African assets? Is it indices, is it global, is it a bit of everything?
Shaun Murison: So it’s indices, commodities and currencies, third party trade ideas. We used to call it Signal Centre, now I think it’s just called Signals. Basically, it’s taken the two companies there that we’re getting trade ideas from – Autochartist and a company called PIA First. It’s independent analysis. The one runs algorithms which are automated, the other one is a manual approach, but they input it to the system. So they’ll say, okay, we think that this is where they’re looking to buy on this criteria. This is where they’d look to exit if the market moves favourably for them or if it moved against them.
You can assess your risk and reward. So if you like that idea again you can just – I always say make your own decisions – but you can reference other opinions out there. And that’s quite a good tool for that. But if you did like that idea, you can copy that order and you can actually place a trade from that guidance from that trade setup. Really, really cool tool on that.
I think there’s lots, depending on what your flavour is in terms of trading. Signals is one thing, third party reference, you can use the back-testing to test your own strategy. Maybe cross reference it with that. Always good to just check up on that live news feed that we do have on the system to see what is moving markets right now, what could be changing sentiment.
And then just looking at that economic calendar, we have quite a cool feature there where you can just pop that economic calendar – the key points, things like inflation, interest rates, announcements, things like that, onto the chart. I can show you what is expected of the news, what the previous figure was. Generally, better than expected is good for the market and worse than expected is bad for the market. Lots of different tools there that you can aggregate together.
So Signals is one, third party ideas, you can generate your own ideas with the facilities there and you can cross reference and just be aware of news items through those economic calendars and those news feeds, those live news feeds.
The Finance Ghost: Yeah, that’s really important, right? You’ve got to have this constant handle on what’s coming in from a market perspective. That’s something I actually wanted to ask you about, is that you’ve referenced before how markets are really just big voting machines and the share price or the index price – I still have to reference share price, I can’t get out of my head – or the currency price or whatever it is, is just a function of all these votes coming into the market. Literally – yes, no, buy, sell and here’s the thing in the middle.
These news feeds are very important because a lot of trades are in reaction to news. You’ve referenced it there in terms of the ideas, but it’s also about planning your trades, right? It’s about looking ahead at that calendar, what’s coming out, some of the other news feed stuff. And obviously news is news, it’s breaking, generally it’s not something that you knew was coming, but not always. There’s other stuff linked to economic calendar type stuff – when the Fed is making a decision about interest rates, that’s one part of it. But then there’s all the news about the press conference afterwards and how people are reacting to it and the whole story. Being able to build that world out with all those alerts and that plan, that’s very important, right?
Shaun Murison: Yes. And you can do that on the system as well. So you can set alerts. you’d have the platform which you can log into from your browser, but you also have the app that you can download to your phone and they link. If you’ve got the app on your phone, you can set alerts to economic data so you don’t actually have to miss it. You might be out on the road, have a normal job and you’ll have a little pop-up notification, push notification that can come to your phone. You can also have it email you.
Not just on the fundamental data or the news data or the scheduled news data – like you said, sometimes we don’t know news that’s coming out, but also maybe you’re just watching some shares or forex price and you want to be alerted as to when the price gets to a certain level, because that might be somewhere where you’re looking at buying. And you can set that system as well and it’ll pop up with the push notification. And even further than that, if you want to get really technical, you could set up oversold indications or other technical indicators and get that push notification just to alert you that, okay, well, this market’s now moved into oversold.
And then you can reassess and say, okay, well, is this an opportunity for me? It’s really, really cool. Those alert features are very, very useful when you’re serious about trading. Take the time to set up your workspace to set up these notifications, know what you want to do, know when you want to buy, what price that you want to buy, know what news items are coming out that could change the direction of a market, whether you’re in it or you’re looking to get into it.
The Finance Ghost: Yeah, absolutely. That’s a big part of it. And what is also quite interesting is your client sentiment data, because that is basically everyone taking all of this stuff, economic calendar, news feed, you know, notifications around stock levels etc. and then reacting to it with trades like buys or sells or whatever the case may be, pairs trades and all kinds of stuff, which are just combinations of these things. Client sentiment is whether or not people, on average, expect something to go up or to go down. And you can certainly make money by being contrarian. But I think in trading, being contrarian is quite dangerous. That’s something that I definitely learned on the demo account. Investing with a contrarian lens can work quite well if you know what you’re doing. Trading with a contrarian lens, on leverage especially, is not necessarily the safest strategy in the world. I guess understanding sentiment is quite important. And IG does have some stuff around that, right?
Shaun Murison: Yeah. So on each instrument, you can see how IG clients are placed. It’ll show you a client sentiment button when you log into the platform. Just click on that little button – let’s say you’re looking at a share like Sasol, or a currency pair, whatever it may be, and it’ll show you how clients are placed. It might say that 70% of IG clients are long and that means 30% are short. So, 70% think the price is going up, 30% think that’s going down. it’ll show you how recently those trades came into place over the last hour, what the sentiment was over the last day, over the last week.
I think what you need to take into account is that most of IG clients are retail traders, so it is a retail sentiment. IG obviously is one of, if not the largest CFD provider in the world. It’s quite a good reference to retail sentiment.
In terms of the contrarian view, there are different outlooks on that. But one of the thoughts is that when markets are in trending environments, that’s where it works best as a contrarian indicator. The market is say in a strong uptrend, it’s been rallying, the initial instinct for retail traders is okay, well it’s gone so far up, surely it’s got to come back down now? They look at taking short positions, but that’s obviously not the case, and that’s where it’s most likely to be a contrarian indicator. When markets are a bit more range bound and moving sideways between levels, you find that that’s not really a good contrary indication.
The Finance Ghost: I think let’s talk stop losses, which is something that’s quite important when you are just trading in general, especially if you’re going to take a slightly contrarian view depending on how you want to play it.
Stop losses keep you out of trouble. Well, they can keep you out of trouble depending on how you set them up. And that’s the point here. We’ve talked about stop losses before. This is definitely not the first time in the season where we’ve spoken about this, but I think it’s always worth doing it again. There are different types of stop losses on the IG platform. I think there are three types. So I think, let me open the floor to you to kind of just run through them so people can understand how important they are and what the differences are.
Shaun Murison: We have to manage our risk in the market. We go in there, we want to make money, we don’t go in there to lose money – that’s not why we trade. But we have to prepare for if the market moves unfavourably, obviously a stop loss is to protect us if it moves unfavourably against us.
Now with a normal stop loss, what you can have is that you have your order at a particular level to get out if the market moves against you. Then maybe you have overnight gap risk and actually opens up lower and you get something called slippage, so you end up actually losing slightly more than what you had put into the system. That moves to something called a guaranteed slop loss where we take on the risks and you can’t lose more than what you anticipated if you’re using a guaranteed stop loss. But for that then we’ll charge a slight premium, which would vary depending on the instrument that you trade in.
Then the third type of stop loss that we look at is a trailing stop loss. And these are obviously all automated things that we put in the systems, whether you do it via the mobile app or via the platform. A trailing stop is actually maybe a bit misleading, because you can actually use that stop loss to try lock in profit. The market’s moving in your favour, you have a stop loss and then it keeps that stop loss tightly behind the price. The more it moves in your favour, the higher your stop loss moves up. You’re just trying to rally and capture as much of a trend as possible. Eventually when it does start to turn around, you might get kicked out of your trade, but your stop loss now is actually in a profitable position because it’s ratcheted up as the trades moved in the right direction for you.
So, normal stop loss, guaranteed stop loss and a trailing stop loss. Trailing stop loss is to try and maximise a trend. Guaranteed stop loss is to prevent slippage from happening. A normal stop loss, which most of the clients use, you’re not going to get that much slippage if you’re trading highly liquid markets. When you start trading illiquid markets, that’s where it becomes a little bit more likely for you to get slippage.
The Finance Ghost: So last little juicy topic, because you actually referenced this earlier, I think when you were talking about the back-testing, and that is algo or algorithmic trading. Now I remember from my banking days and I had a few years of those, that was still in a time when the banks had prop trading desks, which meant they weren’t just flow trading on behalf of clients, they were actually trading off the bank’s balance sheet. They were literally traders sitting there with an annual P&L budget. It was really fun to get to know them and see what they were up to. I distinctly recall seeing one or two algorithmic traders busy building these very hardcore models and it all looked quite interesting. But ultimately, in the wake of the global financial crisis, banks had to actually just shut it down. It just wasn’t worth them doing it anymore. The regulatory requirements were too onerous and a lot of that activity has now moved into hedge funds. Basically that’s where that prop trading has gone.
Algorithmic tools basically just mean automated trading rules that you set up. It’s like setting up an auto forward on your outlook very simplistically, but doing that in the markets. What tools do you have in the IG platform to do this kind of thing?
Shaun Murison: Yeah, so an automated trade, algorithmic trade could be something like we’ve just talked about – a stop loss, because that’s an automated feature. It could also be something like your take profit levels.
But when you’re building strategies – and early on we referenced the back-testing side of things – what you can actually do now is you’ve taken a strategy, maybe you’ve seen that it has a statistical edge historically, now you want to trade it going forward.
You’re not always going to be in front of your computer to take every opportunity. You can take that back-test and literally just at a click of a few buttons, convert it into an automated system, so it’ll automatically trade your system going forward on the criteria that you’ve set. We do have that technical function of creating algorithmic trading and it’s not that difficult to set up. Like I said, when you’re doing the scans and the screening, the back-testing, it’s all assisted creation.
So with algorithmic trading, that is something you can do from our advanced charts as well with that assisted creation. You don’t have to be a programmer, just be sure of your strategy when you start to do that. If you are unsure, you can set up that instead of just trading for you, you can set it to alert and pop up with a deal ticket and you still have to manually execute the trade if you just want to double check everything, which is probably the best way to start. But if you’re comfortable, and you’re very comfortable with that, you can actually have this thing trading for you automated all the time.
The Finance Ghost: The point is there is a lot to get to know. And I think the one concept that came through when we spoke about demo accounts in the last episode was something you alerted me to, which the more I thought about made a lot more sense, which is that a lot of people have got a live account and a demo account and the point is that you can go and try stuff out in the demo account and then bring it across into a live environment when you are ready. The demo account is not just there to say, okay, let me learn how to go long or short, really basic stuff when you’re just starting. It’s actually there to also do some of this more advanced stuff, the algorithmic stuff, the back-testing if you want to, although that you can do that in a live environment because back-testing doesn’t mean you’re actually trading. But all those concepts, you can then go and actually set up in a demo environment and just cut your teeth on that kind of stuff and then bring it across when you feel confident.
Shaun Murison: There are so many tools at your disposal. I remember when I started out trading, you had to pick up the phone to find a broker, the broker would execute the trade for you. The broker was the one with all the tools and all the fancy functionality and access to information. That information now has been democratised. Companies like IG are bringing it and putting it into the palm of your hand literally through the mobile app or through your web based application. Retail traders now have access to advanced tools and sometimes advanced doesn’t mean difficult to use. They can still be simple to use, which I think is the beauty about a lot of what we do offer.
But Rome wasn’t built in a day. Like you said, start off on the demo account, test out these things, navigate your way to what you feel comfortable with and what works for you. And when you’re ready, then move to live account environment or run it concurrently. I think the trick here is just don’t be in a rush. If you want to get started in trading, just go through the motions.
The Finance Ghost: Yeah, absolutely. That’s great advice and that’s exactly the way to do this, is to just go and open that demo account, get started, don’t be too terrified by everything you’re seeing out there. Treat it with a lot of respect, but also give yourself a chance to just get up the curve and learn what’s going on.
I hope that this podcast series has certainly helped you with that. There is one more episode to come after this one, so be sure to join us for episode 13. It really has been a pleasure Shaun.
If you’ve only joined us now on this episode, go back and listen to the others. There’s a lot of good stuff in there, even if you don’t get to all of them, just go and pick out the ones that appeal to you that you think will help you learn something. Even if you’re a relatively seasoned trader in one asset class, you might actually really enjoy one of the shows dealing with a different asset class, so there’s always something to learn.
Shaun, thanks as always for your time and I look forward to doing our last episode with you soon.
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