US Markets & Sectors: On Tuesday, the US markets experienced a slight rebound, with the Nasdaq Composite nearing its record highs from 2021. The communication services and utilities sectors of the S&P 500 saw increased buying activity. Notably, Netflix’s stock rose by 2.4%, and American Electric Power Co. led the utilities sector with a 4.1% gain. US markets rose at the end of the month, trading close to all-time highs after data showed the Federal Reserve’s preferred measure of inflation. Although the figures met expectations and remained above the Fed’s target, investors were encouraged by a month-over-month decrease.
Company Reports: Shoprite is scheduled to report its results next Tuesday, 5 March. Their last trading update showed improved sales growth towards the end of the year, a trend seen in each of their recent results. The stock is 7% off its January high but still at a premium rating of 19x PE given its growth and market share gains in a tough environment
Oil Demand: China’s oil demand growth this year is expected to be half of what it was before Covid-19 in 2019, according to Eurasia Group.
Beverage Industry: AB InBev, Subdued Full-Year 2023 and Q4 Performance, with Emerging Trends. The fourth quarter and full-year 2023 actual results demonstrate a subdued performance, with sales and EBITDA figures marginally missing the mark. Additionally, the projections for fiscal year 2024 may be seen as uninspiring.
Bud Light (a brand in the AB InBev stable) which aimed for a turnaround with its Super Bowl advertising, saw minimal impact on sales. It ranked second in the US retail stores’ beer sales in the week following the Super Bowl, with a 7.3% share, according to Nielsen data analyzed by Bump Williams Consulting. Modelo Especial took the lead with 8.7%.
Travel & Tourism: Norwegian Cruise Line Holdings’ stock jumped 19.8% after reporting numbers that indicated healthy consumer demand for travel.
Market Movements: US equity futures were flat in pre-market trading. The Rand weakened to around R19.08 – R19.28 against the US Dollar.
Pick n Pay Analysis: The company is proposing a rights issue to improve its balance sheet, potentially saving R700 million in interest costs. The core business value is perceived to be zero or negative, possibly at -R10/share, due to high wage costs from a legacy union deal. Analysts suggest that subsidiaries like Boxer, Liquor, and Clothing could be worth R55/share, with conservative estimates at R40/share. Even with a negative core value, the combined worth could still be R30/share, above the current trading price of R22/share.
Gold: Steadied after rising to a three-week high to trade just under $2,044 per ounce.
Truworths: Management delivered a credible result with HEPS growth of +3.6% YoY. This was driven by Office earnings increasing +30% (in ZAR) and Truworths Africa declining by -5%.
Top 5 instruments traded on Clarity by value for the last 7 days:
NVDA-NASQ – Nvidia
TSLA-NASQ – Tesla
AMD-NASQ – Advanced Micro Devices*
SHP-JSE – Shoprite
PIK-JSE – Pick and Pay
*Advanced Micro Devices Inc., commonly referred to as AMD, serves a global clientele and is a prominent player in the semiconductor industry. The company is engaged in designing and developing a range of technological components such as central processing units (CPUs), graphics processing units (GPUs), server and embedded processors, along with semi-custom system-on-chip (SoC) products, and technologies for gaming consoles. AMD’s diverse product portfolio and innovation in the semiconductor space may attract individuals who are interested in purchasing stock in the company.
