Market Snapshots: Crypto’s Ascendancy and Gold’s Retreat
Bitcoin is on a tear, with investors seemingly jumping ship from gold to crypto. Gold recently peaked at $2,800, but there’s a pullback in the making, possibly settling between $2,300 and $2,400. Despite this shift, central banks aren’t budging from gold. They still see it as a trusty shield against the overpowering U.S. dollar and ongoing global uncertainties.
The Rand’s Woes
The South African Rand (ZAR) has slipped, crossing the 18 mark against the U.S. dollar. It’s primarily due to the robust demand for the greenback amid market upheavals. Interestingly, because of its liquidity, the Rand can swing sharply, showing its vulnerability in volatile times.
Trump and the Crypto Narrative
What’s buzzing in the market is speculation around Trump potentially being more crypto-friendly, in stark contrast to the current SEC chair, Gary Gensler, who’s known for his stringent regulatory approach. If Trump makes a move that’s favorable to cryptocurrencies, Bitcoin and others might get a good boost.
Simon, a Bitcoin enthusiast, offers a word of advice: Keep your crypto secure in a hardware wallet to stay safe.
Telcos Under Pressure: Vodacom & MTN
Both Vodacom and MTN are feeling the burn as African currencies, like the Ethiopian Birr and Egyptian Pound, weaken. This hits them hard when profits are converted back to ZAR. Although their dividend yields are appealing (MTN at around 4%, Vodacom at 5.6%), Simon remains skeptical due to hefty capital expenditure demands and ongoing sector challenges.
Raubex Shines Amid Construction Doldrums
Raubex is standing out in the construction world with impressive results. Thanks to its strategic shift toward renewable energy and mining, it’s showing resilience. Simon points out Raubex and Afrimat as rare gems in a tough construction landscape.
Challenges in the Consumer Market
Updates from companies like AVI and BidCorp paint a picture of weak consumer demand persisting. Even though there’s buzz about a potential unity government and inflation is cooling, consumer spending is still sluggish as households work on getting their finances in order. Retail updates are mixed: Truworths didn’t quite hit the mark, whereas The Foschini Group* delivered a better performance.
Tencent: Strong Performance, Muted Reaction
Tencent posted solid results, but it didn’t really move the needle for Naspers or Prosus stock prices. The strong performance was met with a rather underwhelming response from the market.
Wrapping It Up
With volatility casting long shadows over the market, particularly in crypto, gold, and the Rand, Simon suggests maintaining a cautious stance. Focus on quality stocks and strategies for the long haul.
And always remember the golden rule: kindness matters.
Simon Brown
P.S. I hold ungeared positions in The Foschini Group*.
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