You're listening to Strictly Business Podcast with Lindsay Williams.
The JEC has closed its doors, well almost closed its doors for another day, so it's
time for the 5 o'clock shadow.
And as always on a Thursday I speak to Viv Govender from the award-winning RAND Swiss
in Johannesburg and to the
award-winning David Shapiro from Sassfin Securities who is in Manhattan.
I've already spoken to David about the war on Monday, Viv, so I want to start with
you.
You've probably got some very strong views on it.
How is it looking at the moment from your perspective, from all perspectives as
well, morally and markets-wise?
There's no morality in the war.
There are no, like, I mean, Iran is not a good player.
I mean, forget about what they do with other countries, what they do to their own
people.
I mean, just a couple of weeks, a month ago in Saudi, they killed, you know, some
people say 40,000, some people say less,
but it was thousands of people protesting against it.
And why were the people protesting?
They were not protesting for some kind of weird thing, protesting not to cover their
hair if they're a woman.
They're protesting not to have this strict religious police team whatever they do.
And if you listen to some of the stuff that they do to women in prison, and I can
be frank about it,
barbaric beliefs, you know what I mean?
About, you know, if a woman is convicted of a crime that is a death sentence,
they do things to make sure she doesn't go to heaven, you know what I mean?
And that is literally medieval, barbaric.
That being said, in wars, you know, it never goes according to plan.
Trump has been quite lucky recently with Venezuela with the previous 12-day war
against Iran.
I think he had a bit of hubris built up and he thought he could do something like
this again without too much of a pullback.
I think Iran surprised him in terms of just what it's done in response.
I think it surprised a lot of people.
I mean, it's attacked Azerbaijan, it's attacked Cyprus, forgetting about the Gulf
states.
And the danger here is that the longer this goes on, the more the world is in
danger because
of the Straits of Hormuz and the amount of oil that goes through that.
I mean, we talk about 20%, I think, of the oil in the world, natural gas, travels
through this region.
And we've come to a point right now where the storage facilities in the various Gulf
states have been building up.
If it carries on, I think, more than 18 days, these facilities or these storage
facilities are maximized, are maxed out.
That means even if they basically restart production or transport, we're going to
lose that production, you know what I mean?
Permanently.
Or at least until they basically over time can build it up again.
Places like India, places like China, much of Asia, really under pressure.
And the Chinese, as we know, are crucial to the world's manufacturing.
So yeah, this is going to be really impactful if it goes on more than at the
end of this month, basically.
And we'll probably see our prices in excess of $100 a barrel.
At which point in time, that's probably close to 2%.
drop in GDP growth because of that.
If it stays there for a while though, I think it's all to do with the time period
that it stays there.
It can spike to 100 and not have any impact.
But if it stays between 90 and 100, which is what I've read, and if it's true, it's
not very good for GDP.
They didn't say two big points off GDP.
They talked about 0.8%.
But anyway, whatever it is, it's not going to be good.
Yeah, I think 0.8% at 80.
Yeah, if it goes to 100, I think it's 2%.
Yeah, if it stays at 100, 2%.
David, there was a chap called Richard Dalton who is a very crusty,
quite rigid and strict looking ex-UK ambassador to Iran.
And he was interviewed on CNN this morning.
He said you can't trust anything that America does or says anymore.
The lies that come out of Donald Trump's mouth are dangerous.
So don't trust anything that comes out of that country or that man.
And he just essentially,
he said that the statement Trump made that if they hadn't taken this action, within
two weeks,
Iran would have had a nuclear bomb is complete nonsense and is very dangerous
talk.
Now, David, do you think Israel or America,
I've given you the nasty side of America as a preamble to this question.
Do you think it was Israel or America that started this?
because that...
intelligence they had to drop the first bomb on the supreme leader almost lends
itself to israel doesn't it
i i think that um they had this very narrow window which gave them this
opportunity to
take out uh the
iranian leadership and who pressed the button who said yes go ahead i'm not sure
you know but
it would never have been done without whether it was prompted by israel or not
Yes.
It wouldn't have been done without America.
It could have been America.
America, Trump is now coming and saying that he probably, he pushed Israel. You
know,
he's saying it wasn't an Israeli initiative.
So we'll never, as no one will ever know the truth.
We won't ever get to the bottom of it.
It's interesting in here, in the States, I go through the news all the time.
It kind of fades out.
I think people are just moving ahead.
As odd as it sounds, he comes out.
He does have a, you know, every day they interview the president.
He gives an update.
But I think if you look at markets today, there's hardly any kind of...
of response.
Lindsay, we discussed this on Monday, and I think the biggest subject here is
affordability.
And that's the midterms are going to be fought around price increases,
and right across the states.
So I mean, if you go to most of the Americans, I don't even think they're
involved in what's happening.
I walk through the streets here, and There's no protest, there's no response,
there's no reaction,
there's no talk of what is happening.
I think what is more important is what they can afford.
And I think Trump's underbelly, his soft underbelly, is going to be, as
Viv mentioned, is going to be the oil price or gasoline prices.
If they start to go up and start to be felt by consumers again who are already
tight.
I think that's going to be his undoing in this whole issue.
He's got to bring this to an end as fast as possible.
If not bring to an end, ensure that the safety of tankers going through the
straits is assured.
That's where it all kind of pivots.
For the meantime, if I turn on the news now,
I'm going to hear about the weather three times every second minute, about the
weather, about other things.
It's so odd that it's hardly headlines.
Yeah, I noticed on CNN they broke from the news about the war and went to the story
of a
woman who allegedly murdered her husband in
Utah and all the various text messages between her and her boyfriend and how
they're going to run off and
have a lovely life together.
They should have phoned me, I could have told them.
Maybe to rein back a bit.
But you know what I mean?
The point you make is quite valid now.
It's not quite as edgy as it was, the war coverage, that is.
David, I'll stay with you.
Viv, sorry, I'm going to stay with David because we need to cover a couple of
things on the JSC.
There's been trading updates, I think, from Sanlam and Stardio.
David, you might have had a quick glance at those.
But it was Impala Platinum this morning.
Was it as good as Valterra, do you think?
I mean, the share price has been punished today because of the metal price.
not because of the results, I think, but were the results as glamorous as
Valterra's?
Impala, that is.
You know, I can't really give you an answer because what's happened is the
increase in the
underlying metal has kind of obfuscated or kind of masked, you know,
any kind of issues with production and efficiencies within the system.
I'm not sure.
I must admit I've...
I've still got to go through them.
Remember, we're seven hours behind.
And so my day is only starting now.
Or it's very early in the day.
So I've still got the results to go through.
But, Lindsay, you know, the point I want to make,
and we were talking before we came on about trading and trading on the markets.
And I don't know whether I brought this up on Monday,
but what's concerning me is how in these times of stress, Everyone's run for the
dollar.
And the dollar today against the rand is 16.50, it's against 1.16.
Remember, we were 1.19 in the euro against the euro, we won 33 against the pound, we
were much higher than that.
And what's intrigued me is how quickly people have abandoned the so-called safe
havens and have run to the dollar.
And my view is that in real times of stress,
People do go back to the United States.
They go back to the comfort of their granny or their parents, whatever it is.
So, you know, like...
screaming children.
They run for their money.
And it's odd to see where the rand, you know, where this is now.
And why I say that is if you look at the, you know, JSC stocks, I mean, there's a
big,
big sell-off in the miners.
And that will include, I think, today.
I haven't gone through it in great detail at the moment.
Let me see.
You know, there has been quite a big sell-off in all the resource stocks,
gold shares and platinum shares and that.
And that's odd.
They had a horrible day on Tuesday as well.
Yeah, yeah.
The JSU was down nearly 6%, an awful day.
But anyway, David, the gas prices in the United States,
you were talking about that at the beginning of the year when Trump was
saying, you know,
it's 180 a gallon in Iowa.
That was in the wholesale price.
It was never 180 a gallon in Iowa, by the way.
It's another one of his lies.
Yeah.
But in the wholesale market, the futures market,
$1.67 at the beginning of the year, January the
5th. And we're currently trading live at $2.62.
So work out the percentage.
Maybe one of you two clever chaps could do so.
From $1.70 to $2.60, it's almost a dollar a gallon higher.
So it's about 50% higher, isn't it?
Something like that.
and that's the wholesale price, and that'll be passed on once the stocks have
been drawn down at petrol stations, etc.
That'll be passed on to the consumer, and that's not good for Trump.
Do you think it's as simple as that, Viv?
Do you think it's as simple as somebody saying, well, I don't know who to vote
for,
but I don't want to vote for the person that told me there'd be cheap gas prices?
Yes, I mean, as I think it was, Bucklington says the economy is cheaper,
and nothing's going to affect the U.S.
voter as much as the economy.
And I think that's one of the reasons that we actually have not seen the reaction,
like David mentioned, in the U.S.
market.
I mean, basically, yes, we've had a bit of a volatility, but not as much as you would
think would be happening because of this thing.
And the reason is that they think that Trump cannot afford to go into the
midterms with, you know, much higher, you know, inflation and so on.
So he has to come to some conclusion to this war earlier than that.
And I think that's what we've seen from, I mean, I saw some traders talking about it
in the last couple of days, and they were saying basically
The pain for Trump is just too great for the midterms.
He has to end this quickly.
And he also believes that the U.S.
military has been incredibly successful with their attacks, etc.
And the belief is that the Iranians are going to buckle.
But, I mean, the problem is that why would they?
Yes, you can understand if their leadership is under threat, they're going
to die, they might want to buckle.
But, you know, up to this point, that hasn't saved them.
In the 12-day war, they haven't gotten any kind of benefit from, you know.
not going all out in that particular time.
In fact, you could argue that had they been more aggressive in their responses
back then, they'd be in a better position right now.
I think that is the danger.
It's the fact that the whole, I think Tucker Carlson was talking about this,
the whole strategy in the US right now relies on the restraint of Iran.
You know what I mean?
If they did not show restraint, this thing could really turn badly.
And right now they have not shown restraint.
Like I said, they've attacked Cyprus.
There's discussions that they've attacked Azerbaijan today.
they've attacked the Gulf states, which we're not expected to do.
And if they start attacking, like, you know, things like the desalination plants
in the Gulf states, it could have a very,
very big long-term effect on those places.
Okay, let's get away from that now.
And let's have our regular and rather haphazard sometimes AI feature,
which is brought to you by the obsessive and brilliant brain of Viv Govender this
week.
And it's something I sent both of you.
And it's the...
It's DeepSeek, Viv.
The launch, the rollout of V4 DeepSeek or something like that.
Was it as significant as this chat writing on the social media network implied?
Oh, it is.
Look, I mean, like I mentioned in my AI thing I talked to you guys about a while
back, the Chinese are producing basically a very,
almost a dumping strategy around AI.
They effectively are making AI and giving it out for free.
And that is an incredibly, you know, strange strategy.
if it wasn't backed by a government, you know what I mean?
So these companies are basically producing AI for these models, probably costing not
the billions that the US models are costing,
but probably tens if not hundreds of millions.
DeepSeek famously said it also costs 6 million, but people say it costs more than
100 million.
We take all the factors into play.
And then they give it away.
And that is the thing.
If they can keep a model that's close to what the US best models are like, and it's
free,
it totally undercuts the business plans of places like OpenAI or...
you know, anthropic, etc.
Even a Gemini may be coming to play.
And it would make all those billions and tens of billions that have been spent in
the U.S., you know, data center and training and so on, almost like, you know,
loss making.
Because how do you compete with free?
Especially free is almost as good as what you're making.
That's interesting.
David's ears have pricked up, David.
You're looking at your screen now and being tempted to press the sell button on
certain stocks,
having heard what Viv said and having read what I sent you.
It hasn't responded.
And that's...
I read the article and I thought there would be some kind of response, but we
haven't got that response.
I think markets are holding up pretty well here.
I'm trying to look now as we just opened.
Oh no, we've been open for about a half an hour.
This is a little bit of a sell-off in tech stocks, but Microsoft's up, Amazon's up,
Broadcom, various,
NVIDIA down slightly, but nothing of a major sell-off.
It's a little weaker today, but certainly I thought there would be much more of a
reaction.
And it just shows you that no one's really prepared to get out of the market at the
moment,
believing that this will come to a swift conclusion.
So, and I looked at Europe.
Europe recovered very nicely yesterday,
and still holding reasonably well today without any major sell-offs.
I think the sell-off that we have seen has come through.
as I say, emerging markets.
That's where we've seen the weakness, Lindsay, and particularly...
That's the strong dollar, of course.
That's the strong dollar.
Yeah, I mean, the whole EM trade has been based on a weaker dollar,
the dollar going into a long-term downtrend.
And these little blips, it's a bit of safe haven buying,
being a bit of inflation linked or potential inflation linked buying in the
US dollar.
But again, you know, it's a moment in time.
and I'm as surprised as you are, David, about the resilience of the tech stocks.
I mean, it's almost as though they're war and recession-proof, these things.
But we'll see.
Viv is shaking his head there.
I can't see him, but I know he is shaking his head there.
Let me give you some markets.
You know, Lindsay, despite that, I would have preferred a big sell-off and said,
okay, let's come in again.
At the moment, I'm hesitant.
You know, and I'm a little reluctant to expose myself.
I don't know what the trading books look like, whether traders are going in and out
or what they're doing in this kind of market.
But I think we're all confused.
And it all comes down to how long this lasts and what happens from here.
My worry is, that's why I don't want to commit myself in any big way,
is that if it keeps stretching itself and, you know, viv...
I think the tactics of the Iranians, and as Viv has exposed, is to go and say, OK,
you know, all the allies,
all those vulnerable points that are not protected by domes, you know,
salination ponds, hotels, whatever it is, facilities, so on,
tankers that are harboured in harbour or so on, all of those kind of things are a
bit of a worry.
That's their tactic.
And that's causing disruption.
You know, it's causing people to get very, very nervous.
And you can see how many flights in Dubai have been cancelled, 23,000.
It means people are stuck there.
That's kind of a tactic as well.
It's scary.
And I think that's where the Azerbaijan story this morning, okay, it became
breaking news,
headline news for a little while, but it's significant.
There was some damage to the terminal, but obviously the Iranians, if they did it,
they denied the responsibility.
But if it was them, which it probably was, who else could it be?
been It's a tactic to say, well, if you can't fly from
Dubai and you can't fly from Doha, you're going to hotfoot it maybe to Azerbaijan.
So we'll stop you doing that by bombing it.
And maybe other airports will be targeted as well.
It is quite a difficult situation.
Should it continue?
Right.
Markets now.
Dollar round.
16.54.
And that's a 1% gain for the US dollar.
A British pound against the round is 22.07.
1% as well there for the pound up against the rand.
The euro up against the rand by not much, actually.
Actually, 0.8%.
It's not bad.
19.19.
Euro dollar is, where is that?
One's just above one.
It's about 1.16 on the nose, actually.
Gold price, 5,099.
A relatively quiet day.
If it had been down $36 a couple of years ago, there would have been headlines.
But $36 down on a day?
Nothing at all.
Very quiet platinum down 10 or about half a percent.
And palladium down 11 and a third percent to $16.58 per ounce.
Now then, the all-important oil price took a breather yesterday, but now it's got its
breath back.
It's taking a run to the upside because Brent crude oil is just below $84 a
barrel, up over 3%.
And West Texas crude is up 4 and a third percent.
And the price there, $77.90.
Yeah, Mr.
Trump won't like that one.
The copper price, $5.76.
It's taking a real tumble in the last two days.
It was $6.10 and now $5.75.
Okay, the Bitcoin price has been very active and still above $72,000.
$72,100 and a bit.
It's down 1.75%, but it's had a terrific week.
The US 10-year bond yield having been down below 4% is now 4.132% to be precise.
S&P 500 futures with the real market half an hour in 68.72 which
is unchanged on the day and what else have we got here the last one is the South
African 10-year
8.24%
so quite a bit of selling obviously linked to the weakness in the South African round
which is because of the strength of
the US dollar.
David, any movers?
Have you had a chance to have a look at any movers on the JSC today?
I'll get mine in a second.
Stadia's numbers are good.
And it just shows you that people have still been prepared to go and pay for
education.
They're up about 8%, which is a good move.
The one that's been creeping up is Mondi, and I've been watching it.
It's also a feature today.
But Lindsay, when I look at Mondi and I say, okay, and I go back on a five-year
chart,
today's gains or the gains that we see don't even register a blip on their
recovery.
This is a company that's been absolutely annihilated over the last few years.
And then Woolies, some of the retailers are staging some kind of comeback today.
Woolies, what's it, City Lodge, Spur, and so on.
Just looking at some of the other stocks.
But on the downside, it's the miners taking a bit of a knock.
I've got Tungela up 8.3%. Sassel, 4.5% higher.
Mondi, as you said, 3.5% to the good.
and Woolies up 3.4%.
Downside, Impala Platinum, 6.3%, Wicca, Sunland 5.6%, Valterra 5.3%, Northam
3.2%, and Nedcore down 3.5%.
Before you'll get...
Just, if you can, while I speak to Viv, David, just get a couple of the indices
closing.
And Viv, I noticed when I asked you about the war, You were less...
optimistic than most people I've spoken to about the idea that it might be over with
quickly and
with no real consequences.
And I say that rather glibly.
So forgive me for that.
But you know what I mean.
Do I sense the mood correctly?
Yes, you do.
Look, I think the reason is that from the Iranian point of view, what's the upside
of stopping?
Because if we do stop right now, it'll just be another attack in a couple of
months' time or a year's time or something.
And you know that is the the issue here but the one thing i want to mention before
we
finish off here i don't know if you talked about kaga island yet kaga island
is a very important hub for the iranians thus far it's been not been like you know
targeted uh it's like i think 90
percent of their oil economy goes through that thing uh and
if it is targeted i think that would mark a new state for the war i think the us is
holding back from doing anything there because they think it
that that might be the one thing that the Iranians think is still, you know, um,
what China's saying if you know in a deal because nothing does go then the Iranian
economy is pretty much done
I don't think they can rebuild it themselves they it would basically destroy
their own economy and it would be almost like you know a game over for them as a
functioning economy so I think that is the one thing that the US still has as a trump
card for them to get the pun but I think other than
that I mean they killed the the leader they killed I think like a couple people
down
the line if you're like you know making decisions in Iran at the moment Basically,
if you do make a deal, what's your likelihood of surviving the next year?
You know what I mean?
Thanks for that.
David, wrap it up, please, with a few of the indices.
You mentioned resources earlier on, having dragged down the JSC. Is that the main
mover?
Resource index down about just over 2%, 2.2%, with most of the damage.
In fact, it's quite widespread across all.
You know, the diversified miners as well as gold and platinum shares and that the
overall index
was down 0.78 percent, still just on 120,000, still in record territory.
But also we saw a general sell off in consumers and financials as well.
No outstanding features.
I think you've covered, you know, those that that have led the market up.
But overall, a weekday, big volumes.
The one thing we are seeing.
is that volumes remain pretty high.
You saw it in the JSE's numbers results.
So a value trader today, I think over $30 billion.
But once again, it's in the gold shares, Angler Gold, Goldfields, Impala, Valtira,
platinum shares as well.
First-ranked in the high, also quite a bit of trade there.
Their results came out today.
And always NASPERS because it buys back at shares.
So always amongst that as well.
Thank you very much, David Shapiro.
from SAS for insecurities.
He's been speaking to us from Manhattan.
Viv Govendor is from around Swiss in Johannesburg.
And unfortunately, David, I haven't got time to talk about Arsenal.
And thank goodness for that.
That was the five o'clock shadow.
The views and opinions expressed in these podcasts are those of Lindsay Williams and
various contributors and do not reflect the policy,
position or opinion of any other agency, organisation,
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