vestact posted: " Market Scorecard Yesterday, US markets were very quiet for much of the day until they slid in the last hour of trading. The reason for the decline was that the Fed released minutes, indicating that officials are increasingly in agreement about sta"
Yesterday, US markets were very quiet for much of the day until they slid in the last hour of trading. The reason for the decline was that the Fed released minutes, indicating that officials are increasingly in agreement about starting to taper asset purchases this year. They believe that the economic recovery has advanced enough for them to take away the punch bowl.
Locally, resource companies dragged the JSE lower in what looked like the nastiest day in a month. The resource 10 index closed down 5.33% with names like Kumba and Anglo down 12.66% and 8.28%, respectively. Eina man, eish.
As Michael reported earlier this week, people in the US now spend more at Amazon than they do at Walmart. The New York Times has more detail here. Team Vestact endorses this shift. E-commerce is convenient and takes less time. Cut the commute and the time in the aisles at the mall and rather spend that time with family.
At the end of the day, the JSE All-share closed down 1.5%, the S&P 500 closed down 1.07%, and the Nasdaq closed down 0.89%.
Our 10c Worth
One Thing, From Paul
Felix Salmon at Axios produced the chart below, which is frankly rather alarming. It's based on the latest Intergovernmental Panel on Climate Change(IPCC) report.
Basically, their conclusion is that the world is nowhere near making emissions cuts in line with the Paris Agreement. That was the international treaty on climate change agreed in December 2015. Instead of making progress in curbing rising temperatures by 2030, things are still getting worse.
We might even end up with 3°C of warming by 2030, and significant increases in ocean levels. World leaders will probably wake up in about 5 years' time and start taking drastic steps like the banning petroleum fuels, gas and coal. That will result is a huge move to renewable energy and electric vehicles.
What's the logical investment strategy, if that happens? I'm not sure. Buy Tesla! Let's start with that.
Michael's Musings
Naspers' management team has been saying for a while that they are too big for the JSE. Yesterday that was very clearly the case because Naspers trading volumes on Tuesday broke the JSE trading and settlement systems. The JSE spent all of Wednesday morning patching up the data records, and the market finally opened for trading at 14:30.
Normally the JSE has around R20 to R30 billion in trade value a day. Last week, for example, the JSE saw R118 billion in value traded for the whole week. On Tuesday the aftermath of a complex Naspers/Prosus corporate action resulted in close to R150 billion in trades going through the market, double the previous daily record. Naspers accounted for R78 billion of that value, breaking the previous market record by itself.
Yesterday was a particularly bad day for our market to fall over because dual-listed stocks were seeing big moves in international markets. Traders were developing nervous twitches as they powerlessly sat watching dual-listed share prices bounce around. Commodity companies were down and Prosus was up thanks to good results from Tencent.
The cherry on top was that the small, rival local exchange A2X was open for trades. The problem is that most large companies haven't listed their shares on A2X. Maybe this event will push some to do so, creating a legitimate competitor to the JSE. There is nothing like losing a monopoly to help an organisation focus and improve.
Bright's Banter
London-based online events startup Hopin, announced that it raised $450 million at $7.75 billion valuation making it one of Europe's most valuable tech unicorns. Hopin lets companies or individuals host events online with up to 100 000 attendees. There's a stage, a backstage, and even private rooms. Today they have over 100 000 customers including Amex and NATO with over 17 million registered users.
Hopin was founded by Johnny Boufarhat in June 2019 at age 25 after he had a severe reaction to medication back in 2015 and ended up being allergic to the world. His immune system went into permanent hyperdrive, and it was so bad that he couldn't even step outside. According to a blogpost that he wrote, this meant he was stuck inside against his will, but it was cool.
Johnny wanted to go to events and meet people which annoyed him a lot and in 2019, his frustration led him to write code in his kitchen and Hopin, an online events platform was born. The following year, the Covid-19 outbreak forced all major events and conferences to be cancelled or postponed as government-imposed restrictions.
This resulted in a boom in video conferencing companies and Zoom, Microsoft Teams, Hopin and Google Hangout enjoyed new prominence. Hopin scaled up from a team of 10 to 235 in just nine months and had two funding rounds. The company makes over $100 million a year in recurring revenues.
Linkfest, Lap It Up
Ikea announced it will start selling renewable energy in Sweden. The move is part of a goal to reduce greenhouse gases linked to the usage of appliances sold by the group - A Billy bookcase and some wind power?.
Asian markets are struggling again this morning, with MSCI Asia-Pacific down more than 1% and at the lows of the year to date. Alibaba sagged in Hong Kong, to a 52-week low. Sad!
The Rand has bellyflopped, sagging to above R15.06 against the US Dollar. US futures are also down in early trade. I know this hurts right now, but it's not forever.
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