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You're listening to Strictly Business
Podcast with Lindsay Williams.

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JSC has closed its doors for another day,
so it's time for the 5 o'clock shadow.

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And as always on a Thursday, I speak to
Viv Govender from Randsuisse in

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Johannesburg, and also David Shapiro from
Sasson Securities.

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But David Shapiro is temporarily not with
us.

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I'm sure he's going to join the call as we
go along.

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So let's start with you, Viv.

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And I was going to anyway, because I spoke
to David on Monday and I said to him, I

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put the question to him, what is it going
to take...

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for the markets to have a hit because of
what's going on in the world?

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Is it going to have to be a small nuclear
device or something like that that is

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going to spark a sell-off?

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Because here we are, last night, S&P 500,
all-time record highs again.

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War?

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What war?

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Look, I think a couple of things are
happening.

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Firstly, is that we are in the midst of
one of those great technological

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revolutions that seems to be heading up,

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up and away without much of a...

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of a slowdown.

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So, I mean, the demand that's coming
through for things like, you know, Nvidia

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chips and Micron, you know, it goes BEMI
and, you know,

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it goes to the Bloom Energy and all those
kind of things.

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It's just, you know, hitting new all-time
highs and that's pushing markets up.

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Secondly, we had results.

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I mean, bank results are awesome at the
moment.

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You know, these guys are making a fortune
on trading and investment banking.

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So, that's obviously going to help.

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You know, you're never going to short a
stock just because the world looks bad if

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that stock's giving you a lot of profits.

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You know what I mean?

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So, that's one thing.

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Just before you go on, I want to get on to
the banks because I've got to be in my

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bonnet about the banks.

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The banks are doing fantastically well.

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I mean, some of these numbers are
eye-watering.

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But the banks are not doing the
traditional banking as we know it.

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They are trading.

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They've got the trading floors, which you
quite rightly pointed out,

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which are making gargantuan amounts of
money.

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And also, I think in that quarter, there
were $33 billion worth of share buybacks

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from banks.

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So it's not so much a bank as a casino.

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That is the cynical view, Viv.

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There must be other stuff going on, you
know, funding AI and all that sort of

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thing.

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But on the other hand, without the Trump
factor, I don't think these banks would be

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doing so well.

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Yeah, look, I mean, firstly, in a large
extent, banking is commoditized at the

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moment.

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If you think about it.

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I mean, it's not about a branch manager
that knows your name and can deal with you

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for most people out there.

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It's just basically an app that you're
using, and that app is pretty much

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transferable between a bunch of different
banks.

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It's not really a big differentiator.

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There isn't that relationship they used to
have with banks in the past where you had

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your local branch and your local manager
that knew you and you had to do whatever

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business you had

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there.

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Nowadays, it's become a lot more
depersonalized, and therefore that part of

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the business is unlikely to be profitable
in a large scale.

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And the second thing is that I think the
pent-up demand for investment banking,

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especially in mergers and so on, because
of, like, you know,

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Lina Khan at the FTC, she basically kind
of stopped most of that stuff during her

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term.

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And so when the Trump administration came
in and she was, you know, removed, you

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know, a lot of pent-up bank, you know,
merger demand came through that helped us

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out.

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And finally, you know, the last year has
been quite volatile.

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We had Liberation Day.

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We've had whatever we had, you know, over
the last year with terms of tariffs and so

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on.

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There's been moving markets around and
obviously banks have made a bit of money

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on volatility.

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It's very interesting you talk about the
way that banks have changed and the sort

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of business that they used to make money
from from

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people like you and I.

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It's just not there anymore because of the
app because I was bemoaning the fact

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because of a technical issue with one

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of my accounts.

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I bemoan the fact that I didn't rather...

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have the ability to call up my branch
manager and pop in and see her.

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She was a lovely woman called Kathy.

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Kathy, if you're listening, how are you?

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And she was a gentle woman, you know, and
she would sit down and say, don't worry,

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Lindsay, have a cup of tea and I'll fix
it.

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And she would fix it because I'm an idiot
when it comes to certain things, believe

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it or not.

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And those days are completely gone.

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So, yes, I suppose technology is changing
banking,

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but is it risky to be reliant on buybacks
and the skills of your trading floor?

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It is quite risky to be reliant on that.

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That is, of course, something I think that
probably is a more volatile thing.

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The merger is probably more dependable if,
of course,

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the termination continues and we don't
have the regulatory hurdles we had in the

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past.

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I do, however, think that, you know,
what's happened in terms of the banking

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sector, and it's obvious seeing the stuff
happening right now with private credit,

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that I think is one of the big untold
stories out there, or the undercover

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stories out there,

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where there's been a lot of issues with
basically the private credit market out,

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where people are, you know, talking about,

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you know, some of that debt might not be
properly valued on people's books.

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I think it's something that we've been
better in the normal banking sector, but I

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think after 2008, people got a bit too
nervous and too...

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uh you know over regulated with things
like basel iii and that a lot of stuff

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moved off that the the normal big banks
into like the private credit market

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uh so yeah i i do think it's it's uh it's
interesting but one thing i do think also

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is that banking is becoming commoditized
it's not

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one of the sectors i think that's going to
be making uh or the long the huge profits

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unless they They are going to be taking
the big swings with things like

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trading.

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You were talking about private credit.

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I've got an interview tomorrow talking
about private credit in the developed

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markets versus the emerging markets.

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Because, as you said, the developed market
private credit asset class has come under

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intense scrutiny.

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I think it was Jamie Dimon, as high
profile a fellow as that, was talking at a

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conference a week or so ago.

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And he brought it up.

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And I saw another screaming headline, is
private credit the new subprime?

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Is it going to bring the market down?

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So if the war doesn't bring it down, then
private credit will.

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If it's in the headlines, then it's
probably not going to.

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Let's talk about some other numbers now,
specifically the tantalizing numbers we

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had out of Taiwan

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Semiconductor. This must have interested
you very strangely.

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Look, I mean, there was an interview with
a podcast.

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I don't know if you ever watched him,
Dvokis Patel.

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Pretty much everything he does on tech is
very, very important.

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the biggest He gets the really big
interviews, Elon Musk, Jensen Wang, Dario

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Mori, the guy from Anthropic, etc.

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He does his big, big tech interviews.

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And he had Jensen Wang on, I think
yesterday.

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And Jensen Wang, the interesting thing
was, he's been a draw cash as well.

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He's been pushing the idea that these
companies are under investing if they

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believe AI is coming through in the kind
of like the what the market or

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the predicting market says is coming
through that rate is coming to, you know,

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Dario Mori was like pushed quite there's a
meme about how

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He was pushed by Dvokish and kept on
saying, no, we can't do that.

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And Dvokish was saying, you're just
under-investing, this is what you actually

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believe.

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And they did the same thing with Jensen
Wong yesterday as well.

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And the interesting thing is that even
Jensen Wong, who seems to be one of the

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most, as they term, AI-pulled CEOs out
there,

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in terms of his entire valuation of his
company is pretty much dependent on AI.

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Even he doesn't quite invest in the
infrastructure and in AI at the rate you

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would think he would

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if...

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He really believed the forecast that
people have out there for when AGI and ASI

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and adoption is going to be coming
through.

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And so, yes, with TSMC right now, I mean,
this year price, like you said, is up 30

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plus percent just this year alone.

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Up in the last five years, more than
doubled.

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And most of it happened in the last year,
basically.

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And the thing is that these companies,
these infrastructure companies are

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investing and they are pushing the AI
thing,

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but they are not believing.

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the numbers, I think, or the trends that
we are seeing from Anthropic and OpenAI.

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And therefore, there's still that
continuing bottleneck, allowing them to

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sell as much as they want to in the sector
going forward.

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Yeah, but that's in sharp contradiction to
a couple of the discussions that we've had

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in the past.

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You said, you know, is it going to be
possible to invest as much as they need to

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invest?

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Because the infrastructure simply can't
take it.

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Something will go pop.

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So it's all very well saying, yes, the
demand will be there.

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But can we actually fulfill that demand
because of, I don't know, energy or

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whatever, as I say,

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a creaking infrastructure?

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What would you say to that?

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The thing is that the demand is there.

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And what's happening now is that we can't
fulfill the demand.

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For instance, if you use Claude, you've
seen the kind of slowdown that's happened

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to Claude recently, you know what I mean?

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Yes.

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Over the last few months.

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And it's because they can't actually
service the amount of demand coming

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through.

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But this is like a very, very privileged
problem to have.

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It just shows that the demand out there in
the marketplace is gigantic.

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And what you should be doing when that
happens is raising your prices to reduce

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demand.

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There needs to be some demand destruction
out there.

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And I think that is what is the next step
here.

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And that just makes these companies even
more profitable.

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I mean, if TSMC and ASML have to increase
their prices just to basically make sure

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that

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they can match demand and supply, that
just means that they are going to have a

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lot more profits.

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At what stage are we in the AI boom or the
AI journey?

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I hate using that word, but I'm going to.

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The AI journey.

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How far are we along?

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I mean, if you could say the same thing by
using a comparison with the mobile

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telephony market,

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you could have shown Vodacom or Vodafone
rather, seen its share price progression.

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What would you say we're at?

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Would you say we're at least a quarter of
the way through?

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I don't think this is a comparison.

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I think the comparison you want to put out
is like the Industrial Revolution.

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Is this the point where we have the
Industrial Revolution really taking off

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the world?

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I don't think so.

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I think this is the point at which you are
seeing like, you know, the moles in

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Manchester and like, you know, a couple of
places in Europe taking off.

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It hasn't gone to like, you know, the
Americas.

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It hasn't gone around the world.

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We haven't really seen the adoption.

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in place in some parts of the world.

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Like I said, self-driving vehicles, Waymo,
is already in the US.

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Have you seen them happen in the
Netherlands yet?

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I have not seen them in South Africa at
the moment.

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No, definitely not.

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But the technology is here.

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And you can imagine, just that alone, if
the technology stopped today,

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just the adoption of what's already out
there in the world would be earth

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shattering.

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And the problem is it's not stopping right
there.

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We saw just last week that the
announcement about Muthos and

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all the stuff that it's doing with regards
to finding zero-day exploits in software.

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That is something that we just haven't
even considered in the world, because you

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take that technology and look,

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it's not smarter than the smartest hacker.

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The smartest hacker is smarter than this
computer.

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The thing is that the smartest hacker is
not going to be able to spend all this

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time finding all these hacks, and there's
not many people at that level.

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What we have right now is a commoditized
smart hacker that can look at every piece

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of software and find

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all the low-hanging fruit when it comes to
exploits and put them together and make

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combination exploits.

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You know what I mean?

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No software in the world right now, big
software especially, is able to be secure

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in that environment.

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That means all banking, all online
transactions, all websites, databases,

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if you have possible to be hacked, it will
be hacked.

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And that's already something that exists
in the world right now.

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And that won't be just the end.

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It will be something actually smarter next
year.

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And in a couple of years' time, maybe
it'll be smarter than the smartest hacker.

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I mean, the future is here, but it's just
not evenly distributed.

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And I think that's what the stage is.

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We're not at the stage where, for
instance, Africa has electricity.

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We're at the stage where a few plants in
Manchester and in London, in England,

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basically, have the steam engine.

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And that, I think, is where the situation
is right now.

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So right at the beginning, goodness me,
that's quite exciting and also quite scary

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because I'll be having conversations.

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that I won't even begin to understand.

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I'm battling to understand the
conversations I have with you at the

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moment.

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In the future, I'm going to be blown out
of the water.

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But I'll learn, Viv.

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I'll adapt.

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Okay, let's have a look at some real
markets now.

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The dollar round is 16.42, British pound
against the round 22.22,

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and the euro round is 19.34, all barely
changed on the day.

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A euro dollar, 1.1810.

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It's the dollar after a...

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A fairly decent end to the first quarter,
i.e.

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the month of March.

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It was war-inspired.

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The dollar's on the slide again.

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British pound, 135.30.

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Gold price, 4,808.

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It's gone very, very quiet recently.

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It's become a dollar play, Viv.

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It's not a war play anymore.

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It's not a central bank play.

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It's purely a dollar play.

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Dollar goes down, gold goes up.

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4,808.

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It's up a third of a percent today, or $17
per.

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ounce.

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00:12:51.933 --> 00:12:57.498
Platinum is down another $7.23 and
palladium is barely changed at

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$15.87.

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Let's have a look at oil now because with
the risk on trade on equity markets,

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that also implies that oil will be down.

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But in fact, oil is up again.

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It's up suddenly 3%, just under 3% for
Brent crude, $97.70.

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And West Texas crude is $93.24, which is
up 2.1%.

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I have to look at copper because copper,
the New York version of copper anyway,

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went to a record high over the last day or
so.

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It's pulled back a little bit, but it's
still $6.07 per pound, which is just down

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00:13:34.316 --> 00:13:36.316
very slightly,

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as I said.

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00:13:38.316 --> 00:13:38.317
Other commodities, not much going on
there.

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The South African 10-year bond yield,
8.48%,

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and that is seven basis points higher on
the day.

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US tenure.

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is what if a screen could work but it's
suddenly frozen i'll go to the s&p first

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uh 70 52

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00:13:54.264 --> 00:13:59.107
7050 for the june feud and that is down
just a tad eight points us 10

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year now if i can get it no it won't do it
for me uh bitcoin has had a bit of a run

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recently got up to 75 000 earlier on

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today it's just above 73 000 at the moment
Right, I've got to look at the JSC VIV.

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I don't know if you've been watching it.

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00:14:13.490 --> 00:14:15.571
It hasn't been a busy week for results.

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00:14:15.572 --> 00:14:18.911
In fact, there's been barely any results
out this week.

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00:14:19.092 --> 00:14:23.913
So it's been very quiet, especially with
the gold price and the platinum price

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doing what it's doing.

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00:14:25.913 --> 00:14:29.454
And so I've got on the upside Harmony, 4%
better.

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00:14:29.574 --> 00:14:32.075
Boxer, the retailer, up 2.7%.

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00:14:32.195 --> 00:14:32.895
Mr.

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00:14:32.895 --> 00:14:33.496
Price up 2.6%.

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00:14:34.156 --> 00:14:37.577
And on the downside, Valterra, 5.5% down.

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00:14:37.697 --> 00:14:38.397
Northam's.

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00:14:38.977 --> 00:14:41.060
Down three and three quarters of a
percent.

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00:14:41.061 --> 00:14:43.623
So it's the white metal producers going
down.

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00:14:43.743 --> 00:14:46.126
Otesia is a 3.6% loser.

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00:14:46.546 --> 00:14:49.890
Alphamin down 2.9 and HCI down

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00:14:50.230 --> 00:14:55.597
2%. Any other corporate stories that have
caught your eye since we last spoke, Viv?

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00:14:58.327 --> 00:14:59.027
Not really.

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00:14:59.027 --> 00:15:04.150
I mean, I think the big thing I have to
say is that, you know, the reason that the

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00:15:04.150 --> 00:15:06.150
market's kind of down,

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00:15:06.150 --> 00:15:07.652
it's just like a rule of thumb I have at
the moment is you want to sell at the end

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00:15:07.652 --> 00:15:07.893
of this week.

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00:15:08.272 --> 00:15:11.214
Every week, Friday, basically, the S&P
ends up negative.

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00:15:11.494 --> 00:15:13.315
I don't know if you noticed that in the
South of War.

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00:15:13.635 --> 00:15:15.536
So basically, we've had a very strong
week.

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00:15:15.576 --> 00:15:17.477
We're up about 10% from lows in the
market.

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00:15:18.178 --> 00:15:20.339
And we're heading into another weekend
tomorrow.

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00:15:20.779 --> 00:15:22.220
And the market, I think, is probably going
to set up.

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00:15:22.221 --> 00:15:24.021
And that's probably why we are seeing oil
prices higher.

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00:15:24.301 --> 00:15:25.562
And that's probably why we are seeing...

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00:15:25.942 --> 00:15:29.123
you know, the kind of movements we're
seeing at the moment in markets.

329
00:15:29.124 --> 00:15:35.846
It's just because it's the end of the
week, you have two days when you can't do

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00:15:35.846 --> 00:15:37.846
much, and you're going to be, you know,
quite brave to be,

331
00:15:37.846 --> 00:15:39.888
you know, as fully in the market as you
were maybe Monday.

332
00:15:40.528 --> 00:15:41.768
Yeah, very good assessment.

333
00:15:42.269 --> 00:15:45.410
Okay, let's enjoy the relatively quiet
time.

334
00:15:45.590 --> 00:15:47.611
And Viv will speak again next week.

335
00:15:47.631 --> 00:15:54.113
Just very quickly, the all share on the
JSC today closed down half a percent,

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00:15:54.113 --> 00:15:56.113
118,708 and the top 40,

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00:15:56.113 --> 00:15:58.113
110,000

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00:15:58.113 --> 00:16:02.136
833 and that was a 0.6 percent loser
thanks very much for your solo efforts

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00:16:02.136 --> 00:16:04.136
this afternoon viv

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00:16:04.136 --> 00:16:09.078
governor is from rand swiss in
jahannesburg and that was the five o'clock

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00:16:09.078 --> 00:16:11.078
shadow the views and opinions expressed in
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00:16:11.078 --> 00:16:16.020
lindsey williams and various contributors
and do not reflect the policy position or

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00:16:16.020 --> 00:16:18.020
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00:16:18.020 --> 00:16:22.962
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00:16:22.962 --> 00:16:24.962
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00:16:24.962 --> 00:16:26.962
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00:16:26.962 --> 00:16:29.404
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other entity other than the speaker or the

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00:16:29.404 --> 00:16:29.585
author.

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And since we are critically thinking human
beings, these views are always subject to

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00:16:35.167 --> 00:16:37.729
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