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The 5 o' Clock Shadow with Schalk Louw · Strictly Business

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You're listening to Strictly Business Podcast with Lindsay Williams.
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The JSC has closed its doors for another day, so it's time for the 5 o'clock
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shadow.
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And as always on a Wednesday, I speak to Skulk Lowe.
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Skulk is a Portfolio Manager at PSG Wealth Old Oak in Cape Town.
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Skulk, do you mind if I tell you a bit of a story and ramble on a bit?
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Do you mind that you can sit back and listen?
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No, we've got nothing happening on the market, so by all means.
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Okay.
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Where could I start?
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Yes, I think what I'll do is start when the new Air Force One landed in Ankara,
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the capital of Turkey, yesterday for the NATO
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meeting.
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Donald Trump got off and he was met by Erdogan, the leader of Turkey.
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And off they went.
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Well, off waddled Trump.
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And when he went to inspect a line of troops with the Turkish president, he sort
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of got a
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bit lost.
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And he sort of stood staring into.
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Space.
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And I got this footage from Russian TV and it was plastered everywhere.
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It wasn't what was shown on certain channels in America.
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But he didn't know where he was.
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And you saw the you saw it again, grab his arm and sort of guide him.
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He did it.
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He did it twice because Trump looked completely discombobulated.
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And it sort of got me annoyed, firstly, because the man shouldn't be in charge.
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He's clearly physically and mentally unfit, but also because no one.
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does anything about it in the administration they just cover it up and i
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don't know why so anyway i got annoyed this morning and i thought i'm going to
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take a couple
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of hours off and go to a lovely town the nearest town to me it's about 8k's away
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it's called dockham it's all 17th
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18th and 19th century buildings canals and windmills and all that stereotypical dutch
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stuff really
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lovely.
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Sat down next to a canal, 10 o'clock.
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And had a double espresso, a glass of water, and then another double espresso.
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And then this huge noise broke the calm of the morning, Skunk.
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A really, a roar.
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And then it got louder and louder, deafening.
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And honestly, I'm not joking, the table and the coffee cup started to shake.
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And then it disappeared.
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And then another one came along.
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And just through the clouds, you could occasionally see a fighter jet with the
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wheels down, coming into land at the
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local...
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military airport called Leuwarden.
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And normally there's three or four of them, and you see them quite regularly,
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almost every day, in fact.
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But this time I counted at least 20 coming in of different shapes and sizes, the
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biggest being the F-35.
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And I thought, I looked it up, and it's a joint NATO-Royal Dutch Air Force training
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session,
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essentially.
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Joint exercises, we'll call it that.
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And I thought, this is NATO, and thank you, America.
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for contributing so much to NATO.
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And then I thought, you know what?
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Also, NATO is important to you, Mr.
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Trump, so stop trashing countries like Spain, which he did in a press conference
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yesterday, saying,
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I'm not going to do any more trade with Spain.
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I'm not even going to allow people to visit Spain.
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He went on and on and on, and that got me angry.
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I went to get a nice, quiet coffee.
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The planes came over.
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I got angry again.
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And then, of course, the so-called memorandum of understanding went out the
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window yesterday.
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They're fighting with each other.
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And the oil price is up in 24 hours around about 9%, 10%.
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So we're back to where we were.
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It's quite extraordinary and can become a little bit depressing, Skunk.
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Yeah, I think it's depressing.
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It's not can become depressing.
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It is depressing.
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I mean, you could see the market was really, really upbeat.
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for the past few weeks.
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I mean, everybody was talking as if the war's over.
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I've got Bloomberg behind me during the day.
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And it was strange.
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It was a strange feeling yesterday with the boulder of him arriving in Turkey,
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getting off the
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plane.
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And I got a similar feeling.
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And then today, it's just that clip where he said, I'm done.
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You know, I'm done.
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And referring to this Iran story, it's the never-ending war story, this.
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It's not ending.
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This is not positive.
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Here we're sitting.
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I'm watching a Brent oil price touching the $80 per barrel
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again.
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And if the straight closes up in totality again, which it seems like it's doing, I'm
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looking at a
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graph here of how… things progress.
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The straight opened up two, three days ago and we started to see
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some proper movement in there.
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And I'm looking at the graph today.
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It's quiet again.
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It's quiet.
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That's not good.
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That's really not good for the world price and ultimately it's not going to be good
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for the globe.
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Yeah, it's utterly, utterly disappointing.
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I mean, somebody made the comment this morning.
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for any party to want to be warring during the soccer World Cup or the football World
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Cup, then you know how bad things are, because that usually is the one thing that
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should unite
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a globe.
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It's very disturbing, it's very dangerous, very depressing, any sort of word you want
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to conjure up, but you'd think we'd
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be numb to it after, gosh, how long has it been now?
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How many days have we...
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The U.S.
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been at war with Iran?
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I know exactly.
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I know exactly.
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It's too long.
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That's how many days.
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Too long.
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It's been too long.
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Okay.
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And it's quite pathetic the number of times it was over and the so-called
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negotiations are going well.
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And Vitkov and Jared Kushner, who are completely ill-equipped to be doing our
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bidding for
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us, which is what they are doing because we're part of the free world.
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But anyway, Scott, the markets.
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Of course, they're down today, but not down as much as they might have been when,
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for example, you first
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started plying your trade on the JSC and in financial markets.
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Again, they're sort of immune to it by now.
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Yeah, it is.
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But there's a definite fear in the market.
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I mean, I'm looking at the JSC.
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It's down 1.8% today.
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Resources, 3.8%.
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I mean, that's major movements.
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That's a major movement.
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And if we look at the U.S.
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currently, I mean, Dow Jones, which usually tend to be the proxy for more
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value approach for the
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U.S., that's down 1.5%.
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And we know these hyperscalers, these massive companies, have been under
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pressure anyway.
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Nasdaq has been under pressure, and that's dwindling downwards.
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So, yeah, it's not positive.
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But, I mean, you mentioned the word numbness.
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There's sort of a numbness towards this.
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Yes, I do get the same feeling because I think if we had a I remember when the
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war actually broke out between Ukraine and Russia.
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There was a massive, massive pullback.
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When we saw Liberation Day last year, I mean, that had a massive, massive
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pullback.
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Even within the start of the U.S.-Iran war, there were some big movements in the
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beginning.
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And you would have thought, you know, the memorandum of understanding is off the
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table.
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We are still at war and we're going to be bombing each other.
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That would have had a much, much worse effect on the market.
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I do ever want to caution that the worst is still to come.
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If we see these world processes, and we see these, let's call it inflationary
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activators continue to run, this is going to have a very, very bad effect on markets
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in general
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going forward.
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First the economies and then markets.
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But yeah, let's cross fingers that they can get some understanding or get the
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right people
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involved in one room to get an understanding.
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And you know what I'm meaning.
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They had plenty of chances to do that, so I'm not hopeful.
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Let's have a look at other things now.
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Why are nest person pros doing so well today?
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Yeah, okay.
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So firstly, it's a simple one.
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I mean, we've had Tencent.
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I mentioned to my team one stage last week that I still need to find a day
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where I don't wake up and get a notification on my phone.
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I've got all these different kinds of notifications.
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Tencent is trading a new 52-week low.
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Alibaba trading at a new 52.
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two-week low.
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So China has been under massive pressure.
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So we also had the extra news that also
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that what is that company?
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Oh, with an S.
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Company with an S.
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Give me more.
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Yeah, within process.
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Within process, they're holding that company.
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It's a company where, it's sort of a platform where tech or programmers
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interact with
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each other they ask each other questions and there's a that's something that a
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process invested
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quite quite a bit into and and last week it came out that they had another another
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write-off of another
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six billion rand and effectively um that was 84 percent write-off of a company
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that they paid you know quite a bit i think i recall something at 18 billion
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rand um But I
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mean, I think the market realized, and on that specific day, I think it was last
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week, Wednesday or
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Thursday, if I'm not mistaken.
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Yeah.
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That specific day, the market cap.
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of what is the process dropped by 45
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billion rand in that one day on a six billion rand write-off.
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So we did have a few overreactions.
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We had the overreaction in terms of Tencent not doing well, and then we had
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the overreaction on certain
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write-off or impairments that they had within the company.
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And then the good news started we we first had results coming out that looked pretty
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solid
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then secondly we we yesterday heard that this upbeat with chinese ai
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also now looking to create these chip stocks or it was a deep stick chips chalk
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stocks that will be able to
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compete with the likes of the nvidia's nvidia took took a hiding but chinese
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stocks definitely definitely more
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positive over the past few days, and today was no exception.
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We had Alibaba that had the positivity on.
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They were removed on some US list.
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Oh, man, why am I blank?
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I'll tell you now what's that list.
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This is the second time you've gone blank today.
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What's going on here?
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This is typically a Friday thing.
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This is holiday, Brian.
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You see, it's not your holiday.
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It's Northern Hemisphere, but it's filtering.
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Is it down or?
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Yes, down to you.
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That's it.
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But don't worry about it.
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But they came off some
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American list, what let's call it hostile list, and that quite upbeat
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on Alibaba.
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And they jumped this morning as much.
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On one stage, they were up 12.5%.
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And that sort of dragged all the Chinese stocks along.
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And like I said, it just went from a perfect storm to a much better
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environment,
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to oversold to now getting some recovery.
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Nice little bounce back, yeah, from an oversold condition, as you say.
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We'll come to the gainers and losers on the JSC in a moment.
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But let me give you some prices.
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A dollar round.
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I think it's remarkably steady, actually.
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I think there's definitely money coming into.
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South Africa via the bond market and that is supporting the round.
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So we've got a dollar round at 16.45.
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Okay, it's weaker today.
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But as I say, the general picture for me is positive for the round at the moment.
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British pound against the round is 21.99.
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Euro round is 18.77.
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The euro dollar has been flirting either side of that 114 level all day.
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British pound against the US dollar I was 134 and a bit.
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Now then, what about...
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What about commodities?
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All important commodities.
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You mentioned the resources index.
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You'll give us that towards the end of the podcast.
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But gold is down 1.2% at 4,038 at the moment.
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The platinum price down nearly 5% to 1582.
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Palladium down even closer to 5%, 4.96% at $12.18 per
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ounce.
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So that's not good.
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Now the oil price as well.
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It's a massive, massive move in the last two days.
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It started yesterday with about a five and a quarter percent move for Brent.
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It's now up nearly eight percent, 7.82 percent at $79.96.
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That's big.
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West Texas $75.76, up 7.6 percent.
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Copper price down two and a half percent at the moment.
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So let's continue a bond yield.
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Predictably, the yield has risen.
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along with international bond yields they started yesterday, 8.515%.
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That's 15 basis points higher.
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The U.S.
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10-year was below 440 a week ago.
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It's now close to 460, 4.596 to be precise.
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And the 30-year has gone back through 5%.
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It's about 5.08 at the moment.
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S&P 500 futures, yeah, they're getting a little bit of stick.
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$74.91 for the September futures.
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That's down 0.8%.
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And what else have we got here?
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The Bitcoin price, of course, down 3.7% now, $61,570.
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Recent low just above $58,000.
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Looks as though it's going to retest that if this current mood continues.
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Okay, JSC now, please, Skulk, in the absence of lots of other news.
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What have you got on the ups and the downs?
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Let's start with Nesperson Process at the top.
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Give us the closing prices, please.
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So, yeah, you asked for the tops.
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You don't need to look any further if you've got a market that and I'm actually
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counting on the old share stocks, and
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given there's not too many anymore.
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It's 2, 4, 6, 8, 10, 12.
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Only 12 stocks positive today.
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So that's giving you an idea that the markets Not really that positive.
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So I think.
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You know, reading the top five for today, that's pretty much all the top fives.
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But NASPAS today, 4.73% processed, 4.23% up.
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And then, no surprise, Sasol back in action, 4.12% up.
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Grinrod, 3.16%.
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And Metair, 2.56%.
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On the losers' side, that is a little bit more excessive.
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We had Northern Platinum down 7%.
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Harmony down 6.13%.
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Impala Platinum.
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down 6.1%.
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Pan-African Resources down 5.5%.
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And Volterra, 5.2%.
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So clearly, the diggers not having the best days.
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No, really, really bad.
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When the diggers are struggling, I struggle to be upbeat.
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So maybe some buying opportunity there.
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Okay.
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In the old days, of course, the NASPERS and process moves of, you know, around
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about 5% and 4% would have meant that the
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JSC's all-share index would have been rocketing because...
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Those two stocks had a much bigger influence on the index because of their
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weighting in it.
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But not so anymore.
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It's the diggers that hold sway.
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And when the diggers are down, which they are today, it means that the indices are
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down.
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Can you start with the really bad one, the resources index, please, Skunk?
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Yeah, that's a tough one.
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3.8% down today.
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And then property.
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It's a property where the second worst performing main sector.
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That was down 2.4%.
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Financials down just over 2%.
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Then we had the industrials keeping just in a positive territory, thanks to
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NASPA's process that was up 8 basis points.
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And we look at the JSE All Share that closed the day at 108,349 points.
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That's down 1.8%, with the JSE Top 40 also trading down 1.8% for today.
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Very good, Skalk.
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Two things now outside of markets.
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Firstly, how's the golf going?
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Um, it's going.
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It's that time where you realize that you're rubbish.
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Yeah, that's it.
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That's it.
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You got it.
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I'm rubbish.
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But are you enjoying being rubbish?
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I mean, do you enjoy going out there?
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And for the nine balls that you hit badly, the 10th, you hit sweetly and you get that
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lovely feeling?
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Or is it just, oh my goodness, why am I playing this game?
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Tell me more, please.
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No, I can understand.
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I watched a clip this week of Alice Cooper.
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Oh, yes.
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I saw the same thing.
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Yes.
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How crazy is this?
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Who would have thought that Alice Cooper is such an unbelievable, I mean, 71 years
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old.
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And this specific clip, he was being interviewed playing his best run of golf
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ever.
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He played a 65.
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That's something like two under par.
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And then I asked him, you know, what's the thing about golf?
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And he says, well, he plays six days a week.
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It's a drug.
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He went from being really sex, drugs, and rock and roll.
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I mean, he went from being an addict.
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I mean, he was so down the bottle and drugs that it was crazy.
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It was pretty much taking his life.
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And then he got clean, and he took up, as his own words, he took up another drug,
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namely golf.
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He says, and it's a much.
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Much worse drug.
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And I look at Alice Cooper when I say that.
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There's no such thing as a bad dandle golf course.
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It's just, ah, it's fun.
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Even playing is rubbish as hell.
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The interview I saw was different, and I'll read you the transcript from it, a
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short transcript.
18:42
Rock musician Alice Cooper once famously hinted that Donald Trump is a golf cheat,
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famously stating that in a
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2012 interview.
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And this is what he said.
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The worst celebrity golf cheat?
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I wish I could tell you.
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It would be a shocker.
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I played golf with Donald Trump one time.
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That's all I'm going to say.
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And we've heard that so many times with other people.
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Donald Trump cheats in everything, including golf.
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I mean, for goodness sake.
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Anyway, my story outside of the markets is very much linked to my little diatribe at
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the beginning of the podcast.
19:16
I was chatting to somebody today and I told him about the flights over at
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Dockham.
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He said, oh, you should go to this particular place.
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It showed it to me.
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on his phone and there's a sort of a viewing area where we're plane spotting
19:28
nerds real geeks go and they park their
19:31
car and they walk up and they sit there with their headphones on and their
19:34
earplugs in and everything because it's so loud and you can watch these things take
19:38
off and land so i'm doing that tomorrow eight o'clock skulk i mean how nerdy is
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that
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you're a golfer i'm a plane spotter what have we come to what yo what happened man
19:51
Anyway, on that very sad note, thank you very much for your time as always.
19:55
Scott Glover is the Portfolio Manager at PSG, World Holder and King Cape Town, and
19:58
that was the 5 o'clock shadow.
20:00
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