China Running and Finally a Sasol Reversal Pattern?
02/12/25 • 18 min
Market Updates & Analysis:
- Sasol Reversal Pattern? – Examining Sasol’s technical setup and the significance of a ‘kangaroo tail’ pattern.
- Rand Stability Amid Trump’s Threats – Despite geopolitical concerns, the rand remains steady.
- Top 40 at All-Time Highs – Market momentum and investor confidence.
- Revenue shortfalls and potential tax bracket adjustments
- Universal Basic Income and National Health Insurance funding discussion
- Expectations for the fiscal policy outlook
- Telkom: Revenue up 0.9%, in a turnaround phase, but Simon remains skeptical about telcos.
- Santam: Strong earnings growth (40-60% increase in HEPS), but insurance sector risks remain.
- Shoprite*: Consumer stock pullback; long-term bullish outlook despite short-term pressure.
- Alibaba up 40% on Apple collaboration
- Satrix China ETF – is it time to reconsider investing in China?
- General sentiment split between ‘China is uninvestable’ vs. ‘China has potential’
- SA Bonds Showing Volatility: A significant move in bond yields post-Trump comments, raising concerns about borrowing costs.
Market Updates & Analysis:
- Sasol Reversal Pattern? – Examining Sasol’s technical setup and the significance of a ‘kangaroo tail’ pattern.
- Rand Stability Amid Trump’s Threats – Despite geopolitical concerns, the rand remains steady.
- Top 40 at All-Time Highs – Market momentum and investor confidence.
- Revenue shortfalls and potential tax bracket adjustments
- Universal Basic Income and National Health Insurance funding discussion
- Expectations for the fiscal policy outlook
- Telkom: Revenue up 0.9%, in a turnaround phase, but Simon remains skeptical about telcos.
- Santam: Strong earnings growth (40-60% increase in HEPS), but insurance sector risks remain.
- Shoprite*: Consumer stock pullback; long-term bullish outlook despite short-term pressure.
- Alibaba up 40% on Apple collaboration
- Satrix China ETF – is it time to reconsider investing in China?
- General sentiment split between ‘China is uninvestable’ vs. ‘China has potential’
- SA Bonds Showing Volatility: A significant move in bond yields post-Trump comments, raising concerns about borrowing costs.
Previous Episode
Golden Highs & Trump Trade Shambles
Trump Trade Tariffs & Global Market Impact:
- Initial tariffs of 10% (China) and 25% (Canada, Mexico) announced but later revised.
- U.S.-Canada relations strained, with Warren Buffett warning of reputational damage.
- Global negotiation shifts—China, Russia, and Europe eye opportunities.
- Continued U.S.-China trade tensions, including semiconductor restrictions and rare earth tariffs.
- Market volatility expected; long-term investment strategies recommended.
- Volatility is high—avoid panic selling.
- Keep cash reserves for opportunities (buy the dip cautiously).
- Long-term focus: presidential terms are temporary, investments span decades.
- Bank of England expected to cut rates.
- U.S. Fed Chair Jerome Powell pauses rate hikes due to inflation concerns.
- South Africa’s MPC cuts rates, prime now at 11%.
- Analysts predict one to two more rate cuts in 2024.
- Gold price hovering near $2,900, with potential to break $3,000.
- Supply constraints—minimal new gold mining projects.
- Strong central bank purchases—1,000+ tons bought in 2023.
- Retail ETF inflows return after three years of outflows.
- Gold miners like Harmony, AngloGold*, and Pan African positioned well.
Gold weekly | 06 February 2025
Retail Sector & Consumer Spending:
- Mixed trading updates: Pick n Pay and Boxer show early turnaround signs.
- Modest growth in TFG, Mr. Price*, and Clicks; Shoprite* remains strong.
- Cautious consumer spending patterns persist.
- Initial withdrawals lower than expected—around R50 billion.
- Future ongoing withdrawals expected as a structural component in SA’s economy.
- January sales at 46,400—stronger than expected.
- Used car market expanding, Chinese brands gaining traction.
- Auto sector investment options: CMH*, Motus, and Zeda.
Such African monthly vehicle sales
Sasol’s Ongoing Struggles:- Six-month trading update—earnings per share around R14.
- Continual asset write-downs and operational challenges.
- PE ratio suggests market pricing for bankruptcy, but survival likely.
- No clear turnaround signals yet—investors should wait for stronger confirmation.
All charts by KoyFin | Get 10% off your order
00:00 Market Overview and Podcast Introduction 01:10 Trump Tariffs and Global Trade Dynamics 06:25 Interest Rates and Economic Implications 10:02 Gold Market Trends and Predictions 12:51 Retail Sector Performance and Consumer Behavior 14:17 Vehicle Sales Insights and Market Trends 16:40 Sasol's Financial Challenges and Future Outlook
Next Episode
Xi Jinping makes nice with Chinese tech | Anglo raids Anglo Plat cash pile
Anglo-American’s Cash Raid on Anglo-Platinum
- Anglo-American’s decision to unbundle its stake in Anglo-Platinum raises concerns.
- Declaring a special dividend of R59 per share wipes out the company’s entire R17.6 billion cash reserves.
- Implications for investors: selling pressure expected as shares land in new brokerage accounts.
- The appearance of Jack Ma and Xi Jinping together could mark a softening stance toward tech companies.
- Alibaba partners with Apple, integrating its AI into Apple’s ecosystem.
- Is China reopening the door for its tech giants?
- Global indices continue to hit all-time highs, with AI and tech stocks leading the charge.
- Not just tech: European and Asian markets show strength.
- Are valuations stretched, or is there more room to run?
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