My EasyEquities share account is talking nicely to me, for once. It tells me that I am up 23% on that dirty energy business Sasol. The subliminal message, of course, is “take profit”. But I’m determined to ride on.
It was a good week for my other stalwarts: Reinet swapped a long-held bad habit for a chunk of cash (hopefully just in time for the US markets to suffer a wince-worthy correction) and even AB InBev and Prosus showed traction. I could not be happier, and life without my usual coterie of small-cap counters has not been as boring as I expected.
That said, I suffered the indignity of a terrible capitulation at our investment club meeting at Magica Roma restaurant last Thursday. I knew I was in heaps of trouble when a fellow member, on perusing the portfolio printout, inquired loudly (possibly in earshot of investment legend Dave Foord, perched imposingly at a nearby table): “Who the hell put us into Metair, and can that person explain why?”
I was obviously unconvincing in my explanation. The club voted decisively on a costly exit, and I could not really enjoy the always excellent fried squid-head pasta for the incessant grumbling and aggressive pointing of forks. It took a shot of the roughest grappa to reinforce me.
But, I know, you have to be decisive in cutting your losses — and in my autumn as a sportsman I have developed a terrible padel addiction. With my son, Zac, now playing a mean game, I get dragged onto court more frequently. It’s a costly dalliance, at R156 a pop, and made worse by having our local padel courts in a precinct with fine restaurants and (oh dear) a craft beer emporium. My slush fund is just not big enough.
Big decisions need to be made. Relinquish my increasingly neglected Virgin Active gym membership (which will no doubt affect sentiment for Brait)? Give up tennis? Why not? My percentage game — dink, drop and lob — is frowned on, whereas in padel a looping lob brings great adulation, even chest bumps and high fives. I suppose pick the sport that offers you the greatest returns …
I doubt too many investors would be asking luxury brands behemoth Richemont to refine its interests. Not with the Rupert family-controlled business notching up its highest-yet quarterly sales of €6.2bn, with double-digit growth recorded in the Americas, Europe, the Middle East and Africa and Japan.
I’m not sure why Richemont even bothers with anything outside its thick-margined jewellery business
To think, not too long ago, more than a few punters held that Richemont’s fortunes were hitched almost exclusively to China. Not quite! Chinese demand might be flaccid for a while still. But in Europe sales increased 19% on the back of higher domestic demand and tourist spend (mainly by North American and Middle Eastern residents). France, Switzerland and Italy rocked. Sales jumped by 22% in the Americas, 19% in Japan and 20% in the Middle East and Africa. Richemont’s redoubtable jewellery maisons — Buccellati, Cartier, Van Cleef & Arpels and Vhernier — saw sales rise 14%, compared with an 8% decline at the specialist watchmakers segment and an 11% gain at the loss-making “other” segment, which includes fashion and accessories.
I’m not sure why Richemont even bothers with anything outside its thick-margined jewellery business, even if a few “other” businesses, like sportswear specialist Peter Millar and Watchfinder, are faring well. Richemont is certainly well poised for acquisitions — possibly a game-changing transaction in the “other” segment — with a cash pile of €7.9bn. To provide some context to Richemont’s fortified balance sheet, the cash pile is larger than the market value of Nedbank.
To end off, let’s step right into the twilight zone. A statement earlier this week from controversial Namibian investment company Trustco, which has been mooting ambitious ideas in diamond mining, advised shareholders that plans were afoot to delist from the JSE, the Namibian Stock Exchange (NSX) and the OTCQX market in the US.
This unexpected decision came after a bizarre incident: Max Endjala, the COO for Trustco’s internal and forensics investigations unit, was found dead at the scene of an attempted heist in Windhoek involving diamonds estimated to be worth about R700m. Shareholders might rightfully be confused, even a little worried.
The delisting decision comes scarcely two months after Trustco told its shareholders that it had “resolved to initiate” the process to upgrade its primary listing to a direct listing on the Nasdaq. At the time (mid-November) Trustco noted: “The move will deepen Trustco’s access to the world’s largest capital markets, and is expected to increase liquidity and improve price discovery of the company’s securities.” The JSE and NSX listings were to be retained.
Possibly the delistings are part of an ongoing effort to secure the primary Nasdaq listing? But the delisting statement does not make that clear, save to indicate that the board was still evaluating details regarding the planned direct listing on the Nasdaq.
Ultimately, the offer to shareholders should be interesting to mull, with Trustco boasting a NAV (128c a share at last count) well in excess of the market price, which has ranged between 5c and 65c on the JSE.
There is another snag, though. Trustco has still not released its end-August 2024 annual results, which would be useful for shareholders who might soon be considering an offer.
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