You're listening to Strictly Business Podcast with Lindsay Williams.
The JSC has closed its doors for another day, so it's time for the five o'clock
shadow.
As always on a Wednesday, I speak to Skulk Lowe, Portfolio Manager at PSG Wealth Old
Oak in
Cape Town.
I've got to do something before we get into the market, Skulk, and that is that
I went against my closing advice at the end of last week's show.
At the end of last week's show, I said that if you make a good call or you, I use
the analogy of a cocktail party.
You go to a cocktail party, you're telling a joke.
If the joke was successful, you immediately walk away and go and get
another drink or pretend to or go to the bathroom, whatever it is.
I made a good call on gold, which you kindly congratulated me for also last
week.
And I said, don't do it again.
I'm not going to do it again.
But I did it again on Monday with David Shapiro.
I said that Friday's...
bounce which we saw in many asset classes was a dead cat bounce
oh i did not hear that i said it was a dead cat bounce because it was for no good
reason and it came from the
tech stocks and the gold going down quite sharply etc and
i thought well this is just the b leg of an abc correction the b being the up dead
cat bounce
i still stand by it though you Okay, Monday we had a bit of a bounce, Tuesday a
bit steady, today we'll talk about,
but anyway, dead cat bouncer, Skulk.
What's happened today?
We had jobs reports from the United States.
Yeah, I mean, the latest sort of job reports that came out, it's not good.
It seemed to be missing the mark constantly.
So let's first look at the data.
I mean, unemployment rate, they were...
Expecting 4.4 came out at 4.3.
So again, lower.
Well, not again lower, but lower.
This is good.
So people were expecting.
And then the non-farm payrolls also came out hotter or better than expected.
So today's job data did look a little bit better.
But it's sort of good news, bad news, and bad news is good news.
Because what we've seen over the past few days was As the job data came out, and I'm
watching the CME Fed tool.
Now, for the listeners that don't know what I'm talking about, it's something
that we've been discussing extensively,
but it's the probabilities.
It's a probability market where they look at the probabilities of rate cuts for the
different
Fed meetings.
And I looked at it, I would say a week or two ago.
Yes, this is interesting.
Lindsay, I've just refreshed my screen because I did an interview two hours ago.
And two hours ago, it was suddenly that it came.
It took two weeks ago, a week and a half ago.
I looked at this, and it was close to 90, 80-odd percent unchanged.
And then with the previous weaker job data, as we've seen,
It suddenly kicked up.
It kicked up, the probability kicked up for a rate cut to about,
I would say two hours ago it was about seven, close to 30%
probability of a rate cut now for March. And then April,
they had it now over 40% probability, close to 50%
probability for a rate cut in April.
As the job data came out now, much better than expected.
Unemployment lower, non-farm payrolls, they actually way better.
It's now 94% probability for being unchanged in March.
So that's a that's a crazy.
Let me put this into perspective.
The job rate went from 4.4 percent.
The unemployment rate went from 4.4 percent to 4.3 percent, still at a four
year high.
OK, number one.
Number two, the US, which is a 300 million person population country,
created 130,000 jobs in the month of January versus the
expectation of 60,000 jobs.
It's still pathetic.
and it Don't forget that these numbers were late.
So they've been, I don't know, there's something weird going on there.
And there's also been the government shutdown, which is still filtering through
the system.
I don't believe any of these numbers.
I think we've got to smooth it out over the next few months.
And I still don't believe that it justifies a predictor tool going from 45%
to 90% just because of one piece of data, which quite honestly wasn't.
particularly impressive, even though Mr.
Trump will be doubtless now with his stubby little fingers on his phone,
sending out something on Truth Social saying,
look at the jobs that I've created.
Another rant.
No, well, it clearly did.
And I'm just reading a look at the sensation.
I mean, I totally agree with you.
We had the shutdown.
And when they bring out economic data with the words...
revised December data, then you know that why did they revise something?
Because we had a shutdown and there was no data.
So they had to revise.
But what we see, I just want to tell you the sensation.
They've actually, you know,
US stock gain at the open after blowout job data.
Oh, please.
Yeah, yeah.
That's exactly, that is exactly.
I mean...
New stocks open high on Wednesday after a January non-farm payroll report.
I mean, this is how sensation works.
And suddenly this probability shot up from close to,
it's called a 71% probability staying unchanged, now 94% unchanged.
That's a massive, massive kick in.
And most probably not going to show us a rate cut or seeing a rate cut close to 80%
probability.
for for for saying unchanged which still needs to this is going to be interesting
one because we know president trump
he is listen he's fix yeah he's fixated on on getting rates
you know interest rates lower so
of course it is and if anyone that doubts my feelings towards the 47th and the
45th president of the united states of america I'm not a big fan.
And the reason he wants rates lower is not because he wants the US economy and the US
people to do well,
because he's thinking of other people.
He's thinking of himself because he is in charge of a crumbling empire, so-called,
which needs lower interest rates because it is geared to the hilt in debt.
And he needs lower interest rates to service that debt more cheaply.
It's very simple.
It's about him.
So that's why Mr.
Walsh must be very careful.
He's the new Fed chair nominee, must be very careful not to yield to political
influence.
Hopefully not.
I think he's maybe one of the better choices that were being mooted, Scalp.
Anyway, what's the dollar index done on the back of this?
I would imagine what it's done is exactly the same as the Fed indicator that you've
been talking about.
I would imagine that the dollar has strengthened somewhat because of this.
Yeah, because we know it's been under pressure.
She's 100% right.
It was a slight improvement.
I mean, we're not talking 1% or 2%.
This is about a 15 basis point improvement.
And just as we speak, which was interesting because I started off, good
news is bad news, bad news is good news.
I read this sensational heading for this specific media outlet.
But as I'm reading this, I'm looking at… the S&P 500, Nasdaq, and Dow Jones.
You should see that graph.
It just went like, wait a minute.
This is not good because we're not going to see interest rates.
And now it's dropping.
Dead cat bounce, you see.
This is it.
And you want to know something that's dropping that does it before the indices
do?
Have a look at Bitcoin now.
66,000.
And it was below.
No, 65,900.
It bounced up to 72,000 on Twitter.
Monday and over the weekend during thin trading.
Now back down to 65,900.
Things are coming down again, I'm afraid.
And there will be some sort of correction, in my opinion, including in tech stocks.
And then everything will be fine again.
But a correction is needed and a correction we will have.
Anything else happening apart from the jobs data, which we've covered very
nicely?
What about South Africa?
Any stock exchange news service announcements there?
And any reaction?
on the major indices that you cover?
Yeah, there was a few reports that came out.
What I think, let's first use my favorites.
We had, I don't know if it was today or yesterday, I think it was today, it was
Pan African.
Yeah, yeah, it was Pan African Resources, They came out today.
Okay.
And I found the Pan-African Resources one, and okay, let's state my claim again, I
love gold.
I do, do love gold.
You've hidden it well.
Moving on.
So Pan-African Resources, a fairly smallish mining setup.
And I found this exactly what we thought we were going to see for this year for
these gold mines.
So firstly, the operating trading update, the group trading update, and that's for
the period, six-month period ended
31st of December.
They actually came out and said headline earnings per share is going to be anything
between 187%
and 197% higher.
Headline earnings per share is going to be anything between 507% and 517%
higher.
So revenue increased by 157%.
so
It's expected because when you look at the average gold price they received for
their gold over this six-month period was $3,812.
And remember, you're going to tell the listeners now in a second or two about
your call on Monday
and how gold is still trading over $5,000.
And they've also now said that they've pretty much unhedged all their gold.
When you say unhedged, in other words, they're just letting the gold price do
what it does and get whatever the amount
is when they sell it?
Exactly.
Now, to put this in perspective, they didn't mention the all-in sustainable
cost.
But I just looked at the previous announcement, which came out early
January,
where they actually already mentioned that the all-in sustainable cost of the
production for the first half of
2026, which is now.
It's expected to be in a range between $1,825 per ounce and
$1,875 per ounce.
This is crazy.
This is crazy to think that they take this out.
At a runabout, it's called $1,850.
Let's split the dips.
$1,850.
And they got for this period more than $3,800 per ounce.
But looking at the current market,
Every day that the gold price is trading at $5,000, and in years marked,
I would say the biggest thing that stood out for me on the trading app is the fact
that they've
managed over this period to increase their gold production by over
51%.
Wow.
This is really, really, really good.
This is what you typically want.
Well, this is a very good South African story, if that's the case.
And I wonder if the others are able to do that.
And they're saying to themselves, OK, well, we haven't been very efficient
because the gold price hasn't allowed us to be efficient, but now we can be more
expensive.
And there is an ore body there that is now profitable.
So we can go into different places with newer equipment.
I mean, I'm being very simple.
I'm no miner.
I'm no Bernard Swanepoel here.
But it sounds to me as though the South African gold mining industry, which it
hasn't done in the past, is taking advantage, Skalk,
if this company is a representation.
Exactly.
This is exactly and this is good.
Ultimately, this is going to be very, very good for Shell.
This is not just the Pan-African resources because you would expect most of the other
gold miners and ultimately also the
PGM miners, the northerners, the Impalas, those people to do similar.
And if you see that, that's going to falter back through to this African
economy, our currency.
So this is good news.
I think it's good news all around.
And I thought this stood out for me as maybe a nice story
when we look at today.
Two more SA-centric stocks, very much linked to the domestic economy.
I suppose City Lodge Hotels is a bit of a tourist stock as well.
They came out with a trading statement, as did Capitec.
Did you have a chance to look at either of those today, Scott?
I've actually looked at both.
Well, it's Capitec, strength to strength.
I mean, it's just unbelievable what this bank is doing.
What have they done now?
Have they got a new product?
Have they just got new people, new customers?
What have they done?
Where are they finding all these ways to make money?
Strength to strength, and that's the thing.
I mean, when you look at companies like this, and there's a few other, I mean,
I've listened, and I'm not a shield of Pepcor,
but you get the same feeling when you read updates from Pepcor, similar stories when
you read from
ShopRite. But back to Capitec, this was just a trading statement.
So a trading statement told us already that the...
We can expect good things for the net set of results.
Headline NSP share is going to be up between anything between 20% and 25%.
Similar story on the basic headline NSP share.
And then they just went through where did their growth come from.
And you can just see this as a well-oiled machine.
It's just they are, I mean, they're just growth-focused and they're just doing the
basics right.
the whole time so but also keeping up with technology i mean they're keeping getting
the basics right but they're also introducing new
innovative products all the time that people understand as well and i'm not
being dismissive of the the
majority of the client base that they have but everybody likes to keep things a
little bit simple we don't
need things too complicated there's a there's a
company in europe now called revolute uh it's a it's a A fintech stock,
essentially,
but it's a bank and it's doing exactly the same.
It's challenging the old high street banks, just like Capitec did in South
Africa.
And it's working.
So well done, Capitec.
So South Africa looking good, Skulk?
We've got the budget coming up on the 25th, I think.
I think it's going to be a more upbeat budget.
I think the Minister of Finance is going to look at all of these things that's
currently happening, look at our current account.
And just look at our general, because remember,
we don't want to sit with a very high debt to GDP levels.
And I think these type of moves will not only help these companies, because we know
if we turn the clock back six, seven years ago,
but when you look at a typical South African mine,
there was a company that sat with fairly high debt levels.
Cash flow was always under pressure because they really always struggled to.
sort of surpassed at all in sustainable cost.
This six months, they've managed to do it.
Next six months, then you struggle to do it.
And it always sort of went into that overdrive.
And now it's massive positive cash flows.
And I think this similar story could happen and filter through into the South
African finances.
So that's good.
Just quickly on City Lodge, just a voluntary update.
And it's always good when a company bring out a voluntary update.
And they use words like expect strong first-half results, and then you know
things are good.
But it did just show that they've also been, over the past few years, they came
out of
COVID, very similar to the likes of the Sun International, and were struggling.
I mean, they had to go into high debt levels.
I mean, Sun International even had to do rights issues.
And they've focused on, again, things that's going well, sold off a few hotels
that,
I'm not talking about this past six months, but over the past five years, sold
hotels that's just not doing well at all.
And now they're starting to bear the fruit of these moves.
Plus, we've seen a positive,
let's call it tourist industry.
Oh my goodness, the blowout numbers for Cape Town over the Thank you.
The Christmas holiday period.
Unbelievable.
I think it was more than half a million visitors to Cape Town, foreign visitors to
Cape Town over that period.
And hopefully City Lodge was there to mop up some of the excess from some of the
more traditional tourist hotels.
Correct.
So very good.
We're looking at just at the hips of anything between, let's call it 29 to 36
percent increase.
So that's that's really good.
Very nice.
OK, let's have a look at some numbers because I know you've got to get off a
little bit quicker this evening.
Dollar round is 1594, barely changed on the day.
The British pound against the round 2176, the euro round 1890.
Euro dollar is just about 1905 at the moment.
British pound against the US dollar 136.30.
The gold price is 5065.
Despite the slightly stronger dollar, the gold has rallied by $42.
Someone explain that to me.
Maybe there's some Iranian news that we You haven't.
yet heard on the news was.
Who knows?
But anyway, the platinum price is also up,
up $35 an ounce to $21.35 and palladium $17.56, up $51.
That's the best performer, 3% gain.
Other commodities, where's my CRB index?
There it is.
I know the oil price has had a pretty good day.
If you like your oil high, then you've got Brent crude oil up one and three quarters
percent to $70.02 per barrel.
And West Texas crude $65.14 up 1.8%.
The silver price I'll give you that's up 3.75% $83.79 per ounce.
Copper price just below $5.96 per pound which is up 3.25%
I want to give you this one now because this is my star performer of the day.
7.955% is the yield of the South African 10-year bond.
It's nibbled below there a couple of times recently, but today it looks as though
it's consolidating below there.
It's only two and a half basis points down, the yield there is, but very good
for the bond market,
showing confidence in the South African economy.
And hopefully the budget will bear that out.
The US 10-year got down to about 4.13%, now 4.17%
after the jobs numbers.
S&P 500, 69.48.
When we started this conversation, it was half a percent higher.
The S&P has turned lower.
Did I mention dead cat bounce at the beginning of the show?
I can't remember.
Maybe I did.
Maybe I didn't.
Maybe once or twice.
Shut up.
The Bitcoin phrase.
Oh, dear.
That cat is not just bouncing.
It's dead.
66,218 down
4.4% on its way to what it's worth.
And I won't tell you what that is.
Skunk.
What about ups and downs on the JSC today, please?
Okay, so when we look at the ups and downs, just quickly just open this screen
of mine, just open this second.
We know that the golds were, but in general, it was again a commodity there
because when you look at the
JSE RSI that actually improved by 2.5%,
then you know it's going to be predominantly your diggers or let's call
it your resource company.
So from a top down, Tungela, 7.9%.
Cecil, 5.5%, South32, 3.61%,
Bright, that's 3.5%, and Impala Platinum, 3.4%.
I'm just going to add a 6.1% just because we need a gold miner in there.
Anglo Gold, that was up 3.4%.
So really, really good.
I'm throwing my eyes just on the top 10, top 15, and you can see most of them are
either gold or...
PGM miners.
On the downside...
I didn't have any gold or PGMs in my David Shapiro Sasser and Securities competition.
You know, the yearly competition, you pick five stocks.
You pick five stocks and you can't change them.
And at the end of the year, whoever has done the best wins the nice prizes that
David Shapiro has put together.
I didn't have one PGM or gold stock in their skunk.
I mean, yeah, I've got no chance now.
I mean, I've got off to a very slow start, let's put it that way.
Yeah, do you want to tell us which five stocks you choose?
No, tell us the downside on the JSC today, starting with Quilter, if you will, down
6.75%.
There we go.
Then we've got Sappy down 3.6%.
NASPAS, interesting one.
This is a company which you will find in my top five.
And yeah, it's down again further, another 2.3% for today.
This is a company that's now down year-to-date 18%
so this is a this is an entry story then but also one that's been been under
pressure lately
2.2% HCI 1.92% down for today.
Okay, very good scale So the indices just just just give us those indices the best
and
the worst given what you've just said I would say it's the resi that's done the
best today
Undoubtedly undoubtedly we've we've had a jay-z all share.
That was a close that 121,753
points that is up 0.72 percent resis where the star performer two and a half percent
up uh industrials down
0.67 naturally with a little help from naspa's process and then financials that
was also just kept itself in the
green at 0.17 positive for today it's a property index up 1.34 and
we saw the total value trade again uh surpassing the 25 billion ending the day
at the 25.6
billion that traded through the oil share.
I'm going to let you go, but very, very quickly before you go, you said at the
beginning off-air, Lindsay,
I've got to make this a relatively quick one.
I said, fine, let's try to do that.
I think we have.
Actually, we haven't, but anyway, it doesn't matter.
You've spoken about the gold, and I want the update on the other four-letter word,
the other G word,
golf.
How's it going, Skulk?
You can't put me on the spot.
I can, and I have.
Yeah, so haven't.
played yet but um yeah what a surprise this this weekend this weekend will
be my first um you know golf golf i don't say tournament for me but any any any golf
will be a tournament just finishing it up but anyway so yeah this weekend this
weekend will be my first one so next time we speak we can we can have a sort of a
bit of a check-in skunkler is a portfolio manager at
psg wealth old oak in cape town and that was the five o'clock shadow Thank you.
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