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The 5 o' Clock Shadow with David Shapiro and Viv Govender · Strictly Business

• 0:00
  You're listening to Strictly Business Podcast with Lindsay Williams.
• 0:05
  The JFC has closed its doors for another day, so it's time for the five o'clock
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  shadow.
• 0:09
  And as always on a Thursday, it's the double-headed Dream Team edition with
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  David Shapiro, who's somewhere in the United States.
• 0:17
  He's from Sassoon Securities and Viv Govender from Ram Swiss, who's nowhere
• 0:21
  near Switzerland, but he's in
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  Johannesburg. Gentlemen, good afternoon.
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  I must apologize in advance.
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  I've been in deep negotiations with an American...
• 0:29
  I wish it was an American bank, a South African bank today.
• 0:33
  I've been talking to them for about eight weeks since they froze my account,
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  but the chatting and the emails, etc, reached a crescendo today.
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  So if I'm slightly frazzled, I apologise.
• 0:46
  If I suddenly burst out in a Tourette's-style tirade of abuse and
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  profanities, I'll bleep it out,
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  don't worry.
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  But goodness me, it's difficult to deal with people.
• 0:59
  It really is.
• 1:01
  You have to do it face to face and I can't, of course.
• 1:03
  But anyway, Viv, can we start with the South African Reserve Bank raising the key
• 1:06
  interest rates to
• 1:08
  7%, please?
• 1:10
  A 25 basis point, sort of almost like a preemptive strike, if you like.
• 1:14
  Well, according to them, basically, they expect us to go out of the range, you
• 1:20
  know, quite significantly this year.
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  It'll only really come back to it in a couple of years time, effectively.
• 1:25
  So they say 2027, they're going to go to the 3% target,
• 1:30
  but they're looking at basically 4.4% this year and 3.7% starting next year.
• 1:37
  That's obviously something where you just have to act.
• 1:41
  The way inflation targeting works, for those that don't know, is you effectively
• 1:48
  establish reputations, like a person that gets into a fight, you know, quickly,
• 1:50
  initially, to prevent future fights.
• 1:52
  So what you do here is you try and fight inflation really strongly, no matter what
• 1:55
  the cause is initially,
• 1:57
  for the hope of preventing future inflation like COLA, cost of living
• 2:01
  allowance, spiralling happening.
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  And so the established new target of 3% is going to be well above 3%, 4.4% this year.
• 2:07
  They had to do something.
• 2:09
  Yes, we've currently got a situation where PPI, which came out today, is at 4.8% year
• 2:15
  on year.
• 2:15
  CPI is at 4%.
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  and interest rates, you know, obviously above that.
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  So it's a very interesting situation.
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  But what I applaud about Lusitia Kanyaga is he sticks to his principles.
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  He's not going to say, oh, well, the war will be over and it'll come down again, so
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  we shouldn't cut interest rates, the economy can't stand it.
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  He sticks to his guns, and I would say well done to him on that front.
• 2:40
  David Shapiro is somewhere in the United States.
• 2:43
  Where are you, David?
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  And first of all, How was your trip?
• 2:45
  Did you get strip searched at the airport?
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  Was your phone taken away because of anti-Trump messages?
• 2:51
  How was it?
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  I actually got here pretty easily, but very, very long.
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  It's a huge trip.
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  What's also interesting, Lindsay, is that the airports are packed again and the
• 3:05
  airlines are packed.
• 3:07
  Good.
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  People are traveling.
• 3:11
  There's a lot of activity.
• 3:13
  And you can see it.
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  You can see it.
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  certainly when we landed at JFK, but it was pretty easy.
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  The weather's lovely here.
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  It's extremely warm and the trees are lush.
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  I'm going to Shakespeare in the park tonight.
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  You know my wife?
• 3:28
  Look at you.
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  Anything that's free,
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  she's queuing at the moment in the seniors line to get free tickets for over.
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  Did you say anything free?
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  She's not a fan of Shakespeare.
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  She just wants to go there because the ticket's free.
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  But it's a beautiful, no, it's actually, it's free to the people of New York.
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  It's actually a wonderful,
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  they really go out of their way to help those who can't afford things, you know.
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  Because things can be expensive.
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  But this has been a long established tradition here.
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  They have, they redid the theater.
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  It's in the middle of Center Park.
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  And it's beautiful.
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  It's a brand new theatre.
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  And they give Shakespeare free.
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  So it's called Shakespeare in the Park.
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  Tonight it's Romeo and Juliet.
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  She's sitting with all the old-timers, over 65,
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  who bring their little seats and they sit on their seats and waiting for a cue which
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  can go on for hours.
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  I mean, it extends.
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  Okay, thanks very much for that entertainment now update, David.
• 4:37
  What about the mood?
• 4:38
  What about the mood?
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  Is there a groundswell of anarchy coming, anti-Trumpism?
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  What's going on?
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  No, it's, you know, that's what's so ironical because I watch the local news,
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  you know,
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  it's not the business news and that, and most of the issues are very tame, more a
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  lot about...
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  housing, a lot about the mayor's policy, a lot about just general traffic and issues
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  like that.
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  He hasn't made the headlines at all.
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  And it's quite remarkable.
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  So it's almost peaceful at the moment.
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  And I don't know whether it's summer or what it is.
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  I've only been here a day or two, so I can't really comment.
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  But I haven't seen any outbursts or outcries or anything like that.
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  So it just seems to be summer.
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  Okay, let's put things on hold, kind of that story.
• 5:32
  Lindsay, I wonder if he's not tiring.
• 5:35
  Do you know what I mean?
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  And, you know, just before we got on air, when you were talking to...
• 5:40
  about this proposed deal.
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  I think he's just tired.
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  I think he's worn himself out.
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  Viv can tell us.
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  Let's stop you there, David, because Viv can tell us what he told both of us just
• 5:56
  before we went on air.
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  Viv, you've come up with a social media post from Trump which hit the airwaves
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  just
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  before we came on air.
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  What does it say?
• 6:08
  Yeah, so basically...
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  If you look at what Trump is talking about now,
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  he's basically had a statement come out that kind of indicates that he might be
• 6:18
  willing to let Iran
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  be involved in the disposal of the nuclear material.
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  Now, how would that work there and what would be the thing?
• 6:26
  So if you look at how this stuff works, basically, once you get to about 90
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  percent nuclear enrichment, it's basically trivial to make a bomb.
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  It's not that hard to make a bomb.
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  the advanced economy or semi-advanced economy with an industrial base can make a
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  bomb.
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  But it's getting your enrichment, you know, from like basically like 3%, 2% up
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  to like that 90% level.
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  But if you basically reduce your enrichment, say from 60% to 3%, you know,
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  it becomes a lot more difficult.
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  Not impossible.
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  It basically just adds a bit of time onto it.
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  And what seems to be the idea here is that, you know,
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  if you look at what Trump is saying here by mentioning that, you know, Iran could
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  be involved.
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  in the deal,
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  in the possible disposal of the stuff.
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  Maybe that's indicating that you might be willing to let some of this deal remain in
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  Iran,
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  just basically downgraded and monitored by international sources.
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  In that scenario, what happens is, let's say there's another flare-up, Iran kicks
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  out those international sources, takes that material, starts enriching again,
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  and they're on track to make a bomb again.
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  And I think that is something that is...
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  Much worse deal rather for the US than what Obama had where the stuff was really
• 7:39
  taken out of the country.
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  Very interesting.
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  And David was talking about him being tired of it all.
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  And I watched him last night in that televised cabinet meeting.
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  And he was slouched forward, slumped forward.
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  His eyes are so puffy.
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  He couldn't see out of them and he was battling to stay awake when other people
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  talked.
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  In fact, he had to lean forward in order to stay awake.
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  I think they've told him, don't lean back in your chair, Mr.
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  President, because you nod off.
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  because that's been the pattern recently.
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  But he also got things mixed up.
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  He started talking about the war with
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  Venezuela, and he went on about the Venezuelan Navy being at the bottom of the
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  sea and everything.
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  So he's becoming even more forgetful.
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  So, David, you could be right.
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  Into summer, 80th birthday, maybe he's bored with Iran.
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  We know that.
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  But the market's reaction to this hasn't, if that is the case, Viv, that he's sort
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  of
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  getting fed up and giving them a little bit of what they want.
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  The market's not really reacting that much to it that I can see.
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  But Viv, I'm just going to stay with you for a bit because we're going to get back
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  to our
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  traditional subjects that we cover on a Thursday.
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  I think it's time that somebody did it, and you're going to be the one, Viv.
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  It's about time that the Pope got back in his box.
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  Let's do some Pope bashing because he's now having a go at AI.
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  Viv, what did you make of his comments?
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  Look, I mean, the thing with AI is that I'm not as anti-Pope as you are.
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  I'm not anti-Pope at all.
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  But look, I mean, do you remember a guy named Andrew Yang?
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  He ran for the presidency of the US, not the last time, but the one before that.
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  Basically, this was a Chinese-American gentleman who talked about a universal
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  basic income.
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  And that is the kind of stuff that we need to start thinking about going forward.
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  If you're going to have a disruption to the global economy, like we expect AI to
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  do,
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  we need to almost change the social contract in a way.
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  And that's the kind of stuff that's really in the wheelhouse of things like popes and
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  other religious figures.
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  Because we are going to have to have a situation where we already are seeing it.
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  The unemployment rate is rising for young people.
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  We are seeing the amount of spending happening globally, etc.
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  It's going to have a massive economic effect in the next five years, maybe 10
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  years at max.
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  massive unemployment, massive disruption to global economies.
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  And unless we have some kind of real redress mechanism involved here to try and
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  change outcomes beyond what the market allows, you're going to have lots of
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  people that will...
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  pretty secure, suddenly unemployed and in quite a bad situation.
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  And then, of course, we have to talk about the fact that AI is going to change, you
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  know, military warfare, military tactics,
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  military capabilities.
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  And we've seen it happen in Russia and Ukraine over the last few months.
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  We've seen it happen in, for instance, even the current Iran war.
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  These are all things, the war, killing of people, social, you know, situations, even
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  things such as, for instance, the,
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  you know, sad to say, the emergence of AI companions and so on.
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  That's really in the wheelhouse of religious thought.
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  I think that's something to be looked at.
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  And someone like the Pope and other, I would say, spiritual, religious,
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  philosophical figures,
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  need to start intervening here because we're going to have these really
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  complicated questions to answer.
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  Okay, yeah.
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  David, can you weigh in on that?
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  It doesn't matter what anyone says about AI.
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  It's not stopping.
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  It's not going anywhere.
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  It's a juggernaut.
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  Yeah, that's my view.
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  I don't think you can hold back on.
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  progress.
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  It is his progress.
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  And how you control it is no one can know at this stage.
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  But I think to actually have a universal approach to it, I don't think it's going
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  to happen.
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  This is highly competitive.
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  And we can see that between the US and China in terms of sharing technology.
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  And it's like the space race that we had in the 60s between America and Russia.
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  And no one's going to concede and say, let's do it together.
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  you know, for the peace on Earth and let's try open up Mars and so on, not going to
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  happen.
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  And America by nature, their DNA, you know,
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  their whole approach to life is very competitive, very aggressive.
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  And I don't see it happening.
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  I just, you know, as long as they've got the edge at this stage, it doesn't mean
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  they're going to always have it.
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  But I mean, as long as they're bounding ahead.
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  With the kind of companies that they've got, I can't see any concessions.
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  And no matter what the Pope says, yes, from a religious point of view, I mean,
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  this just fits in with their mandate.
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  But no, it's America for Americans kind of thing.
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  And as Viv has said in previous programs, I think as long as they do this,
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  they're going to attract people from the rest of the world who can't make it in
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  their country going to come here.
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  And for those nations, Lindsay, for those nations who are behind, there's a big
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  catch up.
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  Yes, very much so.
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  There's a massive catch up.
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  And we've spoken about this on the program before.
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  The African continent might be falling behind and not getting the full benefits
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  of AI.
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  Hopefully there can be initiatives that stop that.
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  And just for anyone that is Catholic that's listening, I'm certainly not
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  anti-Pope.
• 13:01
  I was just trying to goad Viv into dissecting what he said about AI. One
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  thing I am anti, though,
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  and that's the word trillion.
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  Now, I've heard it in three cases.
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  I think it's three times.
• 13:16
  Okay, Micron, Viv, congratulations on Micron.
• 13:18
  You were talking about it a couple of months ago, three, four months ago,
• 13:23
  actually, and you said, Micron, don't talk about these stocks, chaps.
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  You said, look at Micron.
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  Look what it's done.
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  That passed the trillion.
• 13:31
  a magic trillion capitalization mark um this week um what else have we got that's
• 13:34
  a trillion
• 13:36
  we've got uh no it's the it was two yeah three things we've got to see it we've got
• 13:41
  spacex
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  coming in and a trillion probably sometime
• 13:44
  next month potentially the ipo and the third trillion is the potential for the
• 13:50
  man musk to
• 13:52
  become a trillionaire now i'm i'm old-fashioned I find anyone who has a
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  trillion dollars,
• 13:59
  even if it's only on paper, I find it vulgar, and I think it's morally wrong.
• 14:02
  Now, this is where I have to turn over to.
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  Let's turn over to Viv, because I introduced the Micron theme.
• 14:08
  What a story that is, Viv.
• 14:11
  Oh, look, I mean, it's the biggest holding I have at the moment.
• 14:15
  So I've really written this up.
• 14:17
  It wasn't the biggest when I bought it, but it's done so well.
• 14:19
  It's the biggest holding I have at the moment in my portfolio.
• 14:22
  But yeah, looking at Micron and just looking at the valuation, it still doesn't
• 14:29
  seem overvalued, unfortunately,
• 14:31
  for me, because I need to cut this thing because it's such a big part of my
• 14:34
  portfolio.
• 14:35
  But really, yeah, it's done really well.
• 14:38
  The thing with the trillion dollar valuation for Musk is the thing is that
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  I don't mind somebody like Musk making a trillion dollars because he's creating
• 14:46
  value in the world.
• 14:48
  He's creating SpaceX.
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  He's creating Tesla. He's creating, for whatever you want to say, X that's still
• 14:51
  doing something.
• 14:53
  What I don't like is people that make trillions either by inheriting money,
• 14:58
  property,
• 15:00
  just basically managing unproductive assets.
• 15:03
  That's the kind of stuff the world really doesn't need.
• 15:05
  If somebody makes a trillion dollars basically fairly in the marketplace by
• 15:11
  adding value to the world, so if Musk is worth a trillion,
• 15:13
  his companies are worth more than 10 times that.
• 15:13
  So he's taking a piece of what he's created in the world.
• 15:16
  I don't mind that.
• 15:17
  I don't like people, even to a certain extent, like, you know, people that make
• 15:22
  money out of resources because, you know,
• 15:24
  that kind of money out of resources because resources are just natural
• 15:25
  endowments.
• 15:27
  You know, you basically are using what should belong to the entire country
• 15:29
  effectively.
• 15:31
  And you can take any super profits from that.
• 15:33
  I don't think that's great.
• 15:35
  You create a company that basically puts 90% of the stuff into space.
• 15:37
  You're worth it.
• 15:38
  You start the EV revolution.
• 15:40
  That's fine.
• 15:41
  You basically go off and, you know...
• 15:43
  and Twitter is a much more, you know, mixed bag there.
• 15:46
  But, you know, if you have a valuation in Twitter that's valuable, that's fair.
• 15:50
  So I don't mind that.
• 15:50
  But with regards to the trillion-dollar valuation for SpaceX, I think it's closer
• 15:56
  to $2 trillion at the moment.
• 15:58
  And that is the kind of value that people are talking about right now.
• 15:59
  In fact, we're likely to have three companies with a trillion-dollar valuation
• 16:04
  IPO-ing in the next year or so.
• 16:06
  That's going to be SpaceX, OpenAI, and Anthropic.
• 16:08
  And these are all, I think, companies that are either going to be a trillion-plus or
• 16:11
  almost a trillion.
• 16:13
  Vivian, I want to bring up something that might be happening.
• 16:16
  And just for a comment, I've got no substantiation for this at all.
• 16:21
  But, you know, looking at the market on an ongoing basis,
• 16:25
  just trying to pick up why certain companies are coming down, why nothing's
• 16:31
  happened.
• 16:33
  Are investors,
• 16:36
  institutions creating the opening, you know, to take up?
• 16:41
  SpaceX, Anthropic, OpenAI.
• 16:45
  These are big, big asks.
• 16:47
  And if you're running a portfolio, and even your portfolio, if you said, hold on,
• 16:51
  I want to make room to take up some SpaceX or whatever it is, even if it's a decent
• 16:57
  allocation,
• 16:59
  you've got to get rid of something.
• 17:01
  And could it be your Microns, your NVIDIAs,
• 17:06
  companies like that that have run hard?
• 17:07
  because that's That's the normal way that people do it.
• 17:10
  You know, they say, oh, they tend to sell their winners rather than their losers in
• 17:16
  the hope that the losers will catch up.
• 17:18
  And I wonder if this is not having an impact on market sentiment at the moment,
• 17:23
  just creating liquidity to take up this deal.
• 17:27
  I think that has to be the case.
• 17:28
  I think, look, I mean, you're going to have, like I said, two probably, because
• 17:33
  OpenAI and CX are pretty related.
• 17:35
  Anthropic is not that far away, I think.
• 17:36
  But I don't think Anthropic...
• 17:37
  you know, really needs it because their founders and their mission, that's one of
• 17:43
  the advantages that Dario has.
• 17:45
  It's that the people think he's on a mission and he doesn't have to act.
• 17:46
  It's kind of like how Tesla was, you know, initially, when he could do things that
• 17:52
  other companies couldn't do because people
• 17:54
  thought they were working for a mission, also making him, you know, billions of
• 17:57
  dollars, you know what I mean?
• 17:59
  And Dario has that.
• 18:01
  I don't think, I don't think, you know, SpaceX has that.
• 18:03
  People want their money.
• 18:05
  But yeah, look, I think people will have to like, you know, clear up some space.
• 18:07
  to try and get these multi-trillion dollar companies under the belt.
• 18:10
  And look, quite frankly, they have to.
• 18:12
  I mean, the idea that you're going to be investing in a modern portfolio right now
• 18:17
  and not have SpaceX and not have
• 18:19
  Anthropic and not have OpenAI in your portfolio to some extent is going to be
• 18:23
  quite difficult.
• 18:23
  It's not going to happen in us, but it's in a South African portfolio.
• 18:25
  It's quite a big decision to be making.
• 18:30
  But even your passive funds, those that are just tracking the index, have to do
• 18:36
  the same thing, or the index has to do it.
• 18:38
  You know, you're going to have to make space.
• 18:40
  Therefore, you've got to downweight certain of the other holdings.
• 18:43
  Do they go straight into the NASDAQ?
• 18:44
  I mean, it's a NASDAQ listing.
• 18:46
  One would imagine, David, and Viv, SpaceX, and Anthropic, and OpenAI, et cetera,
• 18:52
  they'll go straight into the NASDAQ.
• 18:55
  Is that correct?
• 18:56
  It skews the index.
• 18:58
  And then the passive funds, as David says, have to take a chunk of that.
• 19:02
  Unless they've got money sitting on the sidelines, unless they've got money.
• 19:05
  coming in in the previous month to put into that, which is highly unlikely, not
• 19:11
  at those sort of levels.
• 19:13
  Yes, you're quite right, David.
• 19:15
  They have to say, right, Chaps, what do we get rid of?
• 19:17
  I couldn't weigh it up.
• 19:18
  I couldn't weigh, you know, why there was this good selling of some very good
• 19:24
  businesses.
• 19:26
  You know, I'm looking at Nvidia now, which is down to 212, having been 235,
• 19:30
  off the spectacular results.
• 19:32
  And I'll say, you know, what's...
• 19:34
  forcing the selling.
• 19:35
  Now, we can make up stories.
• 19:37
  I mean, analysts can go back and start saying, oh, the probability of them
• 19:43
  continuing and so on,
• 19:45
  and the margins and this and so on, competition.
• 19:47
  But that's not driving the markets.
• 19:49
  There's something else.
• 19:50
  And in my own way, Lindsay, it could work on gold as well.
• 19:56
  It could work on precious metals.
• 19:58
  Don't think that those are central banks only buying.
• 20:01
  A lot of people have made a lot of money out of gold.
• 20:04
  And could also say, okay, let's take some profits here and so on.
• 20:07
  But I couldn't reconcile some of the weakness with the headlines.
• 20:12
  If you look at Nvidia, I think there's a lot to do with AMD.
• 20:14
  AMD is up 60 plus percent in the last month.
• 20:17
  And I think that's one of the things that's happening there, that people, if
• 20:21
  you are looking directly at Nvidia,
• 20:23
  I would say AMD is what's really been taking the thing.
• 20:24
  I mean, Nvidia, AMD basically is a $850 billion company.
• 20:29
  Of course, not quite as much as Nvidia, but to be up 67 percent,
• 20:35
  that's hundreds of billions that have effectively increased in valuation.
• 20:38
  And this is in the last 30 days.
• 20:40
  So I think if you're looking at what could be explained, the video pullback, I mean,
• 20:44
  I think it's a question of like AMD taking a lot of that.
• 20:48
  I mean, even, you know, looking at Micron, I mean, Micron, like, I mean, obviously
• 20:54
  I'm talking my book and SK Hynix as well,
• 20:56
  another trend on the share.
• 20:58
  In the last month, Micron is up 86%.
• 20:59
  SK Hynix, Samsung.
• 21:00
  I think what's happened here is people have looked at the NVIDIA pipeline.
• 21:03
  They say, okay, NVIDIA has done well, but who are the things that they really need
• 21:07
  to continue?
• 21:09
  They've looked at, like I said, SK Hynix, which is this
• 21:13
  South Korean memory maker as well.
• 21:16
  In the last month, it's up 77%.
• 21:18
  And this is a trillion-dollar company.
• 21:19
  So we're talking three companies, even if you include Samsung in there as well,
• 21:24
  that are a trillion or more in valuation.
• 21:28
  And they are all basically, in the last, like I said, month or so, up
• 21:32
  significantly.
• 21:32
  Samsung is the smallest improver, up a third in the last month.
• 21:37
  What I've seen happen is basically people have said, okay, NVIDIA is great.
• 21:41
  Here's these multi-trillion dollar companies that are really essential to
• 21:45
  NVIDIA's ecosystem.
• 21:47
  You know, why don't you put some money into those guys as well?
• 21:48
  Because they are really going to be taking on.
• 21:50
  AMD, I think, is to do with some of the substitution effects that are possible
• 21:56
  with, you know, NVIDIA versus AMD chips.
• 21:58
  And look, NVIDIA has great, you know, profits.
• 21:59
  It gets great profit margins.
• 22:02
  That is always going to attract competition.
• 22:04
  And I think the market is just going to say that now.
• 22:06
  Maybe put some money towards the AMD competition.
• 22:08
  Maybe put some money towards the suppliers who say, hey, if you're making 70% and you
• 22:13
  depend on my stuff, I can raise my prices.
• 22:15
  Okay.
• 22:17
  I accept that, and I'm not challenging it.
• 22:18
  But what is happening is that they're selling NVIDIA.
• 22:22
  They're selling the winners, the previous winners, to make space, whether it's for
• 22:28
  AMD, whether it's for Micron, whether it's for
• 22:30
  SpaceX and so on.
• 22:33
  The liquidity is not there.
• 22:34
  And you have to create it.
• 22:36
  And that's why I think you're seeing those switches.
• 22:39
  And, you know, what Viv says makes a lot of sense.
• 22:42
  I mean, you can see it by the price performance.
• 22:44
  But it's not, you know, you can see these switches taking place.
• 22:48
  And maybe once more details come out, I think the roadshow for SpaceX, for
• 22:55
  example, starts on June 8th.
• 22:57
  And then when people say, right, we're going to put in X, then you may see this
• 22:59
  theme.
• 23:00
  develop, David.
• 23:00
  We're going to have to come back down to earth though, David.
• 23:04
  I mean, if you think of the JSC, I think of Renette and I think of Telcom and I
• 23:11
  think of lots of others.
• 23:13
  They went in opposite directions.
• 23:13
  Yes.
• 23:14
  I don't know if you had settled down or could be bothered to have a look at a few
• 23:19
  of the results here.
• 23:21
  I mean, Telcom went soaring and Renette went down the pan.
• 23:23
  So I don't know if you want to comment on either of those because they used to be
• 23:29
  terribly important in your life.
• 23:31
  Yeah, not anymore.
• 23:33
  But I mean, if you look at telecom,
• 23:34
  I think what's finally happening there is that digitization, the sale of data,
• 23:41
  and their move into that is finally offsetting the legacy issues that they had
• 23:48
  of maintaining fixed
• 23:50
  lines.
• 23:52
  And fixed lines become such a small part of their business now, but the other sides
• 23:55
  have grown to offset that.
• 23:57
  It's still a bit of a drag.
• 23:59
  There's been a lot of adjustments as well, you know, restructuring the company,
• 24:04
  selling properties and right-sizing it.
• 24:06
  And it doesn't look bad.
• 24:08
  You know, it looks okay.
• 24:10
  It's still not an area that I'm rushing into simply because there's so much
• 24:12
  competition.
• 24:14
  And if you've looked at MTN, if you looked at Vodacom, locally they're battling.
• 24:18
  Most of the growth is coming from outside of the country.
• 24:21
  So there's a lot of competition internally, and you've also got CELSI.
• 24:26
  But I can't sneeze at those results or sneer at them.
• 24:29
  I think they're doing the right thing at Telcom.
• 24:34
  Yeah, it's taken a while, but they are moving into the 21st century.
• 24:38
  Viv, just a broad comment now.
• 24:42
  The discount to NAV trade, the people that bang on about, well, look at it, it's
• 24:47
  trading here,
• 24:49
  but the NAV is way up there.
• 24:49
  Renet is a company that epitomizes that sort of talk, doesn't it?
• 24:54
  Oh, yeah, most certainly.
• 24:55
  Look, I mean, we've seen, of course, you know, the massive pullback here.
• 25:01
  But frankly, in the current environment, you know,
• 25:04
  the fact of the matter is that you have to trust the people managing these things.
• 25:08
  You have to trust the thoughts and like, you know.
• 25:12
  investment analysis that that's been going forward by the people managing it because
• 25:18
  effectively that's what you're buying you're buying these guys ideas
• 25:20
  um yes you may say net asset value in center in there but also you you have to
• 25:25
  think to yourself like this thing has a
• 25:27
  huge cash balance um which you're not gonna be getting um and you need to
• 25:32
  basically see you i
• 25:34
  mean like the stuff that you can pay whether that box you're not getting that
• 25:38
  stuff that's what is the discount and that is why you basically have to kind of trust
• 25:40
  uh you know to what they are doing.
• 25:42
  I do think that, you know, the fact that the matter is rain, if you look at the
• 25:48
  performance of this particular share, I mean, in the last,
• 25:50
  what's called a year or so, it's basically flat.
• 25:52
  In the last five years, it's done not bad at all, like about 77%.
• 25:56
  I do think the market is kind of like making a judicious choice here, saying
• 26:00
  that, you know,
• 26:00
  these guys obviously are doing things that are not quite, you know, up to the level
• 26:05
  we want.
• 26:05
  And we don't really, you know, want to give them too much benefit of the doubt
• 26:09
  when it comes to...
• 26:11
  what they will be able to do going forward.
• 26:13
  And I think that's kind of fair when it comes to this.
• 26:15
  If you want people to value things properly, give them the stuff to value
• 26:16
  directly.
• 26:18
  Both of your voices changed when you talked about
• 26:20
  Renet and Telcom respectively to when you're talking about AI stocks.
• 26:24
  It's very interesting that years ago that would never have been the case.
• 26:30
  Many years, many, many years ago, the markets looked like this, gentlemen.
• 26:33
  The dollar round is unchanged at $16.25 despite the fact there was an interest
• 26:37
  rate.
• 26:38
  Rise from the South African Reserve Bank.
• 26:39
  The British pound against the Rand 2184.
• 26:42
  The Euro-Rand 1894.
• 26:44
  Euro-dollar has just breached 117.
• 26:48
  The dollar on the side again.
• 26:51
  What else have we got?
• 26:52
  The gold price.
• 26:54
  It briefly had a look at 4,400 earlier on.
• 26:58
  It's rallied a bit now to 4,475, but still looks...
• 27:02
  The charts I look at, I don't know if I'm reading them the wrong way, but they
• 27:05
  look...
• 27:06
  terrible.
• 27:08
  I think it's over.
• 27:10
  I think gold when gold slipped from 5,300 all the way down, you know it's over.
• 27:18
  It's not going to do anything.
• 27:20
  No, it's suffered a lot.
• 27:22
  Officially from its peak, which I think was 5,625, something like that.
• 27:28
  It's where it is now.
• 27:28
  It's officially in a bear market.
• 27:30
  Platinum down nearly a percent to 1909.
• 27:33
  Palladium down 1.8%.
• 27:35
  you to 13.87.
• 27:38
  The oil price did actually, was up about 2.5% at one stage.
• 27:41
  And so that social media message that Viv was talking about has an
• 27:48
  effect because Brent is actually now unchanged on the day at 94.32 dollars
• 27:55
  per barrel, whereas West Texas crude is 89.63 upper percent.
• 27:59
  There's a difference in the times that those markets change, hence the Difference
• 28:06
  between their ups and downs prices.
• 28:08
  Copper price is up nearly a percent to, let's call it $6.37 per pound.
• 28:12
  South African 10-year bond yield in response to the SARB has shed two and a
• 28:19
  half
• 28:19
  basis points.
• 28:20
  The yield has gone down to, let's call it, 8.46%.
• 28:25
  The US 10-year Treasury bond yield, that's pretty, the bond market quite steady
• 28:32
  recently.
• 28:34
  Last few days, the yield is still 4.46%.
• 28:36
  S&P 500 futures, a couple of hours into the session,
• 28:40
  7,568, up 0.4%.
• 28:44
  That's the June futures soon to become spot.
• 28:47
  The only other thing that's surprising, actually, it's getting really clobbered in
• 28:52
  the last few days, and that's Bitcoin,
• 28:54
  72,800, down another 3.2% today.
• 28:58
  Right, David, while I give you the ups and downs on the JSE,
• 29:01
  Can you possibly get the indices ready for me, the usual main indices?
• 29:08
  On the upside on the JSC today, the ones that we should note, MTN up 4.5%,
• 29:14
  Kumba Iron Ore up 2.8%, and Harmony up 1.4%.
• 29:18
  On the downside, Carew down 7.4%, Life Healthcare a 5.5% loser,
• 29:24
  91 Limited down 3.5%, Clix has shed two and three quarters, and Datatech.
• 29:29
  2.3%.
• 29:30
  I don't know if any of those are ex-div.
• 29:32
  Anyway, they're the prices that are prevailing on the screen.
• 29:35
  David, the closing indices, please.
• 29:38
  Just on that, I think the rise has had an impact.
• 29:41
  You know, you might not see it in the index.
• 29:43
  The index is only down 0.3%.
• 29:46
  But I mean, if you go through those shares, it might not be able to actually
• 29:51
  move the index.
• 29:53
  You know, whether it's Life, Spark, Clix, Pickup Pay, Fashini,
• 29:55
  all of those were starting to show some kind of form.
• 29:59
  you know as oil started to fall this just sets it back i don't i you know i heard
• 30:06
  what uh viv said about anchoring
• 30:08
  inflation but uh you've got an economy that is on its knees and uh you know to
• 30:12
  borrow money now
• 30:14
  10 and a half percent or whatever it comes to with the rise i mean you can't survive
• 30:18
  So I think we're seeing a lot more fallers now, a lot more losers to gainers on the
• 30:25
  market today,
• 30:27
  with a few just benefiting, I think, from those that you've mentioned.
• 30:30
  But by and large, it was actually a very weak day.
• 30:34
  Okay.
• 30:35
  Show us the indices, please.
• 30:39
  So you've got the all-share down 0.029% at 1.15096.
• 30:45
  The mining index was up about a third of a percent, 0.33.
• 30:50
  Nothing really dramatic across there.
• 30:53
  And then the rest of the market was down.
• 30:55
  Property slightly better.
• 30:56
  I've got to analyze that.
• 30:59
  You know, maybe with rates going up, I don't know what that means.
• 31:03
  I would have thought that property stocks come down.
• 31:05
  But nevertheless, financials under a bit of pressure.
• 31:08
  The bank index down 1.2 percent.
• 31:11
  And the industrial index.
• 31:14
  minus about a quarter of a percent.
• 31:17
  There again, not huge movements on our market, but still ticking downwards.
• 31:24
  I think it came as a...
• 31:25
  I know the market was expecting it, but I still think it's a bit of a shock.
• 31:28
  I thought with oil coming down that the governor would hold back,
• 31:32
  but his long-term outlook is still quite negative.
• 31:37
  So, Lindsay, to just share our sentiments again, I think the JSC is under a lot of
• 31:43
  pressure.
• 31:43
  And I can't see it breaking that, especially with gold coming down against
• 31:49
  what we're seeing in overseas markets.
• 31:51
  Okay.
• 31:53
  Okay, David.
• 31:55
  Your point is noted and very well made.
• 31:57
  Gentlemen, I'm going to now take advantage of the long days of summer.
• 31:59
  It doesn't get dark until around
• 32:02
  10.15. It's about 26 degrees at half past five in the afternoon here.
• 32:09
  I'm going to wander up the pole, up the dike to have a look out over the Wadmse.
• 32:13
  which is the piece of the North Sea that is sort of sheltered from the real North
• 32:19
  Sea by a group of
• 32:21
  islands, which you can see from the top of the dike there.
• 32:23
  And it's going to be lovely.
• 32:26
  Thank you very much for a really good show.
• 32:27
  David Shapiro is from Sasson Securities in New York at the moment.
• 32:31
  And Viv Govender, as always, in Johannesburg.
• 32:33
  He's from the award-winning RAND Swiss.
• 32:36
  And that was the 5 o'clock shadow.
• 32:38
  The views and opinions expressed in these podcasts are those of Lindsay Williams.
• 32:42
  and various contributors and do not reflect the policy, position, or opinion
• 32:49
  of any other agency, organization,
• 32:51
  employer, or company associated with StrictlyBusinessPodcast.com.
• 32:54
  Assumptions made on the analyses are not reflective of the position of any other
• 33:01
  entity other than the speaker or the author.
• 33:03
  And since we are critically thinking human beings, these views are always subject to
• 33:07
  change, revision,
• 33:09
  and rethinking at any time.
• 33:10
  Please do not hold us to them.
• 33:11
  in perpetuity.