Inflation, it ain't over. So what about rates? (#574)

JSE Direct with Simon Brown

Pick n Pay* Chart Analysis

• Resistance zone around 26, potential to touch 26.70
• Higher highs, higher lows, horizontal resistance
• Target: 30 bucks to fill the gap
• Comments on Pick n Pay's potential under Sean Summers
• No need for a rights issue, potential market spook if it happens
• Simon's position: Started building, considering more
• Current status: Down 1.7%, trading at 25.30

Pick n Pay close 13Feb24 (daily)

Transaction Capital and WeBuyCars

• Transaction Capital planning to list WeBuyCars
• Unbundling process expected in March
• Valuation: 7.5 billion rand
• Key information: Founders' put option on Transaction Capital is off the table
• WeBuyCar's strong performance in January with a record 14,000 cars sold
• Market Cap of Transaction Capital: R6.5 billion
• Opportunities and challenges in SA Taxi business
• Overall assessment: Looking not too bad
• Current stock level: 850c
• Expectation of pro rata shares for Transaction Capital holders
• Timing details expected in the circular

Gold Price Movement

• Gold weaker despite US and UK inflation data
• Current gold price and chart analysis
• Simon's position in Anglogold Ashanti*
• Observations on unexpected weakness in gold price after inflation data

Gold daily chart 14Feb24

Canal+ Offer for MultiChoice

• MultiChoice facing a 105 rand Canal+ offer
• Market sentiment: Canal+ likely to come back with a better offer
• Current stock price: 104.63
• Speculation on possible offer prices: 120, 135, or even 160
• Market confidence in Canal+ making a mandatory offer

Global Market Trends and Dollar Strength

• Dollar strength in global markets
• DXY trading at 104.87
• Money flowing into the US due to fear and concerns
• Impact on Rand: Trading at 19.07
• Market skepticism about inflation concerns

DXY (US$ index) 14Feb24 (daily chart)

Inflation Analysis

• Recent US and UK inflation data
• Market reaction to inflation numbers
• Central bank concerns about reaching inflation targets
• Jerome Powell's cautious approach and potential rate cuts
• Local inflation expectations and potential rate cuts in South Africa
• The challenge of getting back to the inflation target

* I hold ungeared positions.