Beaten-down tech offering value

追加: 2026-05-31

[00:00:02]You're listening to the Money Web Now podcast series with Simon Brown, live streamed every weekday at 6:30 a.m.

[00:00:14]It's Thursday, 28th May. We've got Delts ahead of us market open this afternoon.

[00:00:20]I'm Simon Brown coming at you live and loud from the Money Global headquarters in Johannesburg, South Africa. on the show today. Peter Leen has her capital advances. The Mag Seven, I mean the baskets up at the alltime highs. I mean, bits and pieces. Some of them doing better than others. I want to get his sense around what how he's thinking about these. Um certainly we came into the year and everyone was like, "Oh, they're pricey." Sure. But in many cases, they're just pricey here. We're going to be chatting with Vishel Rama from Press and Investment Management. We got MPC this afternoon. Consensus is we're going to get a hike. That seems painful. And then we're going to chat with Worksman's attorneys, changes to mergers and acquisitions, the regulations that perhaps could see an improved process. Uh we'll get her view on that. This podcast is brought to you by Standup Asset Management. Invest in more global opportunities through their partnership with JP Morgan Asset Management. Morning headlines. Money Web Joerberg's 97 billion rand budget.

[00:01:19]Higher tariffs amid intensified revenue drive include plans to increase electricity prices, property rates, and refuge removal charges. Business day take-home salaries shrink to a 2-year low as inflation and war bite. Uh debt burden grows heavier as real salaries hit lowest point in two years. Morning markets. The US was mixed with the S&P was green but 002% higher. NASDAQ was off a tenth of a percent. The east is all red. Sydney 1% lower. Tokyo 1.1% lower. Hong Kong just over 2% down. And 10 cent just over 2.5% down. Commodities all red. Gold futures $4,43.

[00:02:02]Brent 9712, platinum, 895, palladium, 1388, the rand is 1648, Bitcoin 73,300, and top 40 opening call red 810 points or 3/4 of a percent lower.

[00:02:21]Money web now on the money also available on podcast.

[00:02:26]>> Trading now with Petrienh. You find him of course heria capital advisor petri appreciate the early morning time mag 7 alphabet and video Microsoft Apple Amazon Meta and Tesla I mean looking at their uh uh returns year to date uh some are green some meta is a little down Microsoft off 14% Tesla down 2% for the year uh some green there across most of them how are you looking at I mean the basket of these shares is essentially trading at at at alltime highs notwithstanding all The worries we came into the year saying, "Oh, these stocks are expensive." They carry on going.

[00:03:03]>> They keep getting Well, they're magnificent. Simon, >> a good answer.

[00:03:08]>> Um, look, I don't know. We're not big chases of fads. We understand that these things have been doing really well.

[00:03:14]>> Um, and there's a lot of momentum in them and there's a lot of, you know, faith in their ability to continue to grow earnings. We just can't see how Tesla and Facebook and these Nvidia like yes they're great businesses but man are they going to keep growing at the pace they're growing? Is it really realistic for them to do that?

[00:03:35]>> We like man we like to buy the beaten down dogs right companies that are valuable undervalued >> um and we would like to buy some of them. So we have some tech stuff. We own PayPal for example.

[00:03:49]>> Yeah. Um, uh, we've got a company called Workday. Yeah.

[00:03:53]>> So, it's not necessarily that we completely avoid the, you know, the new and shiny sector, if you will. Um, but we think that there's more value for us to be found currently in the software space rather than in the AI space. And I think what a lot of the Magnificent Seven have done is they've all some way, shape, or form introduced the words AI into what they're doing, right? Uh, I mean, even Tesla with the self-driving and all that stuff, >> it's very interesting. It's very cool.

[00:04:23]We think that Tesla is a great business.

[00:04:26]Um, I'm very interested to see what the market's going to do with SpaceX.

[00:04:30]Honestly, it's I mean, I saw something that it's a over a trillion dollar valuation on like 35 billion revenue where other companies like Nvidia for example have, you know, similar valuations uh but actually have 700 billion in revenues. So >> it's um it's going to be interesting to see how the market responds to something that it might be the magnificent eight soon I suppose. Um but I don't know for us we feel that yes there's a lot of momentum in the stuff but we're not willing to buy them or chase them and you know sometimes it costs a bit of performance. We've been we had a very strong first quarter that we outperformed the market very strongly by about 9 or 10%. Um, and this quarter we're lagging about 3% behind the index because we've been basically buying uh protection the whole time. Uh, and the market hasn't yet come down. It looks like hey, we've had two red sessions in a row on the NASDAQ now. So maybe maybe this is it.

[00:05:27]>> Um, but essentially we're sitting with a lot of cash and we're sitting um in a very defensive position because we feel that the market's just run really really really hard recently. uh and we want to protect the money rather than to you know just follow the herd. There are opportunities out there that we think are lower risk essentially. Now you know it is a difficult thing to say because you look at the stuff running up the page and you think well you know you missed the bus of course you're going to be of course you're going to find negative things to say about them. Uh the problem that we have with the market at the moment is that the only things that are running are the magnificent seven. Market breadth is very very narrow. a very small number of companies have a huge impact on the index and the index is up but the rest of the market is really not and that is a worrying sign for us which is why we're in a defensive posture so magnificent 7 they're magnificent if you've owned them congratulations you've made a lot of money um our view is that we wouldn't go out and buy them today uh we would rather buy software counters we would rather buy K web which is like Chinese tech for example >> um that would be what we would be backing. Um, but they could go another 20 30% before it's over, right? So, uh, our investment philosophy is just not to chase what's hot and trending.

[00:06:48]>> And the market is hot and trending. I'm looking at the S&P nine green weeks up uh, 1100 points. Call it 15% since that low in late uh, ma March. Uh, it has been. This is a hot hot market. We leave it there. Peter Red and Hay Serenia Capital Advisers appreciate the early morning time. Give your money the return it wants without taking a flight with the Standlib Global Select Fund, an offshore equity fund submanaged by JP Morgan Asset Management.

[00:07:17]>> Money Web now on the money.

[00:07:20]>> J Van Rama, quantitative analyst at Precient Investment Management.

[00:07:26]Appreciate the early morning time. We've got MPC meeting today. yesterday, today announcement at 300 p.m. this afternoon.

[00:07:34]Uh consensus is on a quarter% rate hike.

[00:07:38]Are you in the consensus camp? Do you think that the the MPC is going to increase our rates this afternoon?

[00:07:44]>> Morning, Simon. Yeah, thanks for having me. So indeed, we do think that the MPC will hike rates at um today's meeting.

[00:07:51]Um the consens is that way. I think the SA will want to sort of be maybe sorry the MPC would maybe want to be a little bit um preemptive in terms of making their move given that I mean second round effects are not yet showing in the data >> with regards to the inflation but um they'd want to be maybe be preemptive in that it looks like given that the war has gone on for so long that the second round effects will start to show and >> you know be ahead of the curve and try to sort of hike grace now and then maybe they can see how they don't have to be as aggressive going forward. So I think they do a hike at today's meeting.

[00:08:23]>> It's a fair point and and I take the point around the second uh round effects and some of those I mean I think for example food and I've had this conversation before with others you know the wheat that's being planted now with higher fertilizer cost we're only going to be eating in 6 months time and we're going to see it the price pressure then if they rise today. I mean, is this going to be potentially a a and I appreciate that there's a lot of unknowns out there, but is this looking like a single oneoff sort of shot across the bar or maybe a, you know, a two or three series of of of of increases?

[00:08:55]Because of course, this is very much a a supply shock driven uh inflation rather than than than than demand driven.

[00:09:01]>> 100% right. So definitely on more supply side than demand side. Look, we think at this point in time it'll be one off at at this point in time, not see further additional um hikes down the line. I think you know if we get some sort of resolution very quickly from the whole I mean it's obviously goes it says one day it will be solved next day not I mean you know but if we can get something fairly quickly sort of on that side then I think there's no reason why inflation can sort of come back and you know the last point is at 4% if that can come now sort of sort of stabilize around the 4% and come down lower >> over time there's no reason why the stock need to be as aggressive you know the rest of the world has also not gone down that route you know, we see with the Fed, >> initially at the start of year, they're looking at cuts, but now that's sort of the curve is sort of flat and higher for longer, not necessarily hiking, but so I think the S don't need to necessarily be aggressive and can just hike for once and then see how the data comes through after that and then if they need to cut to hike further on, they can do that.

[00:10:01]But we think that there'll be one hike and then we will wait and see and um but most likely that would be one and then it'll be high for longer for a while and then maybe cutting a bit later. But yeah, that's probably only next year.

[00:10:12]>> I I I take your point because inflation can unwind quite quickly. I mean, you know, we looking at I think a diesel price that's potentially down around 5 rand uh uh uh next week. Of course, uh they still be getting the the benefit of of of the Treasury. I think it's 393 benefit there. But this inflation could unwind fairly quickly if we see oil prices down and therefore fuel prices down notwithstanding some of that lag effect.

[00:10:36]>> For sure. Right. I mean our view is that this whole shocker right now as it stands is quite the temporary one right it's not going to persist for long we say temporary because you know if we look at the data and obviously we are smag and we look at the very closely and put it applied into our models you know you look at the data the one-year inflation number has ticked higher but if you look at the longer term stuff like the five and 10 year they have ticked up higher but not as aggressively and so what we think is the market is saying is that well it's expecting more of a short-term thing, not a long-term thing from inflation. However, that does definitely change. If we see inflation sort of stay higher or sorry, if we see the war continue for longer, >> then that inflation numbers will start to tick higher and then it becomes moves away from this temporary thing to a more persistent thing and then we have different problems, right?

[00:11:25]>> Yeah. Yeah. Yeah. 100%. And how much is this because of the new target? And to be clear, I I I I was definitely h in favor of the the new 3% target which is with 1% banned either way. But if we were in the old target and the min and the governor rather always targeting four and a half, we might be in a slightly different well fundamentally different position with inflation only at four. They might not be cutting. This really is part of the new regime.

[00:11:51]>> Yeah, you you would have to say so supposedly. Yeah, we we're obviously on the whole side that this new inflation ban is really a good thing for our economy in the long term. Um I do think that you know as you as you rightly mentioned right it's just where we see inflation tick up higher now and shifting out those bands it does mean that you know the SA need to be on their on their toes a bit more and you know do they want to maintain their credibility around this inflation ban that they've created. you know, we we can't we can't see want we don't want to be seeing this number shoot out higher and then they they go out of their band and then they lose their curbility. So I think it's definitely a case of this new band um maybe just forcing hand a little bit more and they they in a sense will then be a bit more preemptive and look to like um to sort of maintain that credibility going forward. Well, leave Rama press investment management rate decision at 3:00 this afternoon.

[00:12:49]Appreciate the early morning time. I poll today on LinkedIn. What do you think we're going to get? Are we going to get that hike? Is he perhaps going to leave it unchanged? I think we're going to get the hike. I don't like it. I wish we weren't, but I think that's what we will get. Have your vote. Have your say.

[00:13:01]LinkedIn. The Standib Flexible Income Fund delivers capital preservation and consistent top quartile inflation beating returns. Let your money keep working with Stanlip Asset Management even after you retire.

[00:13:16]>> Money web now on the money. I'm chatting with Ammo Burger Smith, director and head of regulatory at worksman's attorneys. I'm more appreciate the time minister of trade industry and competition has published revised merger notification threshold also filing fees.

[00:13:34]Uh this falls under the competition act 89 of 1989. Let's first talk around the the thresholds. What are the thresholds?

[00:13:42]What's the change and are they significant?

[00:13:45]>> Well, Simon and thank you for having me and this is an important topic to discuss if we think about any deal making process. So what we've seen there are intermediate thresholds and then large merger thresholds and this actually determines whether you need to knock on the door of the competition authority to get approval for your M&A transaction or you know your acquisition and that becomes a very important threshold. So for quite a while there's been criticism that you know the merger filing threshold fees were too low and it actually caught too many transactions. So we've now suddenly seen on an intermediate level the thresholds if we look at the combined turnover asset value of the two entities that will come together that's moved up from 600 million to 1 billion and then you al always also look at what is the turnover or the asset value of the target firm that you want to acquire or then combine with and that's been doubled from 100 million to 200 million. So we've seen on the intermediate level quite significant increases in filing fees of over 60% closer to 70% where on the higher threshold if we talk about large mergers that has to go through to the competition tribunal those um increases have been lower around about 45% um and that will mean that you know both the commission's work load will be less in future as well as that of the tribunal. So we now on a tribunal level look at a 9.5 billion combined asset value before you have to knock on the door of the competition tribunal. These are significant changes and I mean I suppose I mean in some senses it's maybe just sort of catching up with sort of I was going to say fiscal drag that's on our tax but in the sense of you know inflation's been going along but this will I mean it will make mergers it'll make acquisitions particularly of the smaller size just that much easier just that it's a process you don't need to go to the authorities to get it approved.

[00:15:47]>> That's correct. But we need to remind ourselves that the commission has always got the ability to write and say but you know we note this transaction is taking place and we require you to notify that as what they refer to in the legislation a small merger. So it it's not as if all transactions that fall below these thresholds are now uh you know land for the free and we can do whatever we want to. um the commission can still keep an eye over what's happening in the rest of the economy. I think what we also need to realize in this process and we seem to see it more and more with government departments, you know, if we think about home affairs um in RIA charging a fee for those checks on the um based from a home affairs perspective, the new CPA direct marketing regulations expecting companies to pay a fee. Yes. as well the the filing fees to those notification fees to the commission has also gone up quite a bit. So their ability to generate can we be blunted say income through filing fees have also been enhanced through this process. I I hadn't actually thought of that. Of course, I mean it is a revenue for them, let's be clear. And and I mean the file merger filing fees what 165 to 220,000 the large merger filing fees from 550 to 735,000. I mean in the bigger picture maybe not massive but not insignificant at all. And this really is a more this is if we look at more broadly this is government kind of trying to make it sort of easing regulatory complexity make it easier for businesses to do business and and cases to do mergers and acquisitions.

[00:17:28]>> Yeah, I think this is part and parcel of that argument as well to you know lessen the hurdles for business and make it easier for business and well this economy needs growth. So we also need to look at it from from that perspective um and those hurdles to to lessen that. But more importantly, Simon, there's been a lot of criticism against the competition authorities with, you know, lag and time and not being responsive enough in terms of approval of transactions and getting that with the necessary speed through the system. But that is also partly due to the fact that there's there's not infinite resources and they had a massive massive workload to deal with.

[00:18:10]So one would hope through this process that one can speed up approval processes and actually and in that way enhance um deal making and enhance the growth of the economy because the workload on the commission side will definitely diminish um as a result of these threshold increases. I hadn't thought of that and of course in some fees they can get some extra stuff but I remember the Afreat merger of takeover of Lafage took an age and it actually hurt the ultimate economics of it. Is this when is this live? Is this is this happened? Is this to happen? What are the timelines in this regard?

[00:18:43]>> Well the irony of this is it's already happened. So by the time it was when it was announced to all of us on the 11th of May um it it came into effect on the 1st of May. So, which is makes for interesting reading, Simon, because now some transactions will actually fall outside of the net and other might actually require higher fee to be paid before it's assessed.

[00:19:08]>> Oh, that is interesting. A quick thought there. If if I sort of, you know, tied the knot back in April, there's different complexities to May and it's not going to be retroactive. Yeah, that is very interesting because you know this is a factor that you need to take cognances of if you in your deal planning and your uh you know whole process and strategy. So yeah that has changed the field um that we're looking at >> but broadly this is good news. I like it. I think it's a good move forward to leave it there director and head of regulatory workman's attorneys.

[00:19:38]Appreciate the time.

[00:19:43]>> That's it for today. We're chatting with uh Sam Bungeway yesterday. F he's from FMB wealth and investments. We were talking Pepcore numbers very strong fintech maybe modest clothing sales. We asked your take on the stock over half said a great business quarter said could be better. Uh and the rest saying yeah core ops is seeming to struggle. Have your vote have your say LinkedIn. This podcast is brought to you by Stanib Asset Management. Invest in more certainty to navigate volatile market conditions. We're live every weekday morning. the money web in the app. 6:30 a.m. podcast just after 7. Thanks to my team Eddie Nobuk, Nicole Sabu to you for listening. My guests for their time. My name is Simon Brown. This is Money Web Now. We'll chat again. Tomorrow is Crypto Capital.

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