|
Related Topics |
We take a look at the Johannesburg Stock Exchange (JSE) trading statistics for the week ending 25 October 2019 and compare the numbers to that of a year ago.
|
Our highlight over the last week
The extract below covers the latest financial results of former market darling Famous Brands
At this point in time, we would not recommend buying into the fast food/ casual dining market. South African consumers are struggling, the Food and Beverages sector has been spinning its wheels in South Africa for a while now, and FBR with their issues in the UK will be focused on trying to get that fixed, which according to us will leave management with less time to focus on South Africa and expanding their business and footprint here, in a market that is already struggling. They not the biggest dividend payer, they trading on a very high PE ratio, but on the positive side they have extremely strong cash generation. But overall we recommend staying away from FBR at this point in time.
But if you really want a benchmark or target price for Famous Brands (FBR), taking all their financials, their brands, their markets and their current issues and obstacles into account, our valuation model places a value of R71.20 per share on FBR (up slightly from our last full year financial results valuation of Famous Brands). Based on Famous Brands' current price feel that they are overvalued and would not recommend investing in them or any other company active in the sector right now.
Read the full Famous Brands financial overview and valuation here.
- Revenue: R3.569 billion (down from R3.583 billion)
- Cost of sales: R1.809 billion (up from R1.667 billion)
- Profit for the period: R192.4 million (up from a loss of almost R600 million due to GBK write offs)
- Headline earnings per share: R1.59 (up from -R5.70 for the same period of the previous year)
- Cash generated from operations: R296.4 million
- Cash generated per share: R2.91
- Cash on balance sheet: R427.6 million
- Cash on balance sheet per share: R4.21 (or 5.4% of share price)
- Net asset value per share: R16.24 (so the group is trading at4.85 times its book value)
- Interim dividend: R0.90 a share
- Dividend yield: 2.28%
- PE ratio: 24.7(which is well above the overall market average PE ratio)
At this point in time, we would not recommend buying into the fast food/ casual dining market. South African consumers are struggling, the Food and Beverages sector has been spinning its wheels in South Africa for a while now, and FBR with their issues in the UK will be focused on trying to get that fixed, which according to us will leave management with less time to focus on South Africa and expanding their business and footprint here, in a market that is already struggling. They not the biggest dividend payer, they trading on a very high PE ratio, but on the positive side they have extremely strong cash generation. But overall we recommend staying away from FBR at this point in time.
But if you really want a benchmark or target price for Famous Brands (FBR), taking all their financials, their brands, their markets and their current issues and obstacles into account, our valuation model places a value of R71.20 per share on FBR (up slightly from our last full year financial results valuation of Famous Brands). Based on Famous Brands' current price feel that they are overvalued and would not recommend investing in them or any other company active in the sector right now.
Read the full Famous Brands financial overview and valuation here.
Advertisement
JSE Trading Statistics for the week ending 25 October 2019
Number of trades:
Number of trades (2019): 1 704 285
Number of trades (2018): 1 719 112
% change year on year: -0.86%
Volume traded:
Volume traded (2019): 1 451 657 000
Volume of traded (2018): 1 705 751 000
% change year on year: -14.90%
Value of trades:
Value of trades (2019): R103 114 198 000
Value of trades (2018): R107 889 543 000
% change year on year: 0.88%
Foreign purchase/selling:
Net sales/Purchases (2019): -R4 441 728 000
Net sales/Purchases (2018): -R3 192686 000
So year to date (YTD) foreigners have been net seller/buyers:
Net sales/Purchases (2019): -R91.290 billion
Net sales/Purchases (2018): -R20.192 billion
So a year ago foreigners were net sellers of SA listed shares to the value of -R20.192 billion for the YTD while this year they have been net sellers to the tune of -R91.290 billion in the year to date (YTD). That is a R71.1 billion difference between the net buying/selling position last year compared to this year as foreigners accelerate their selling of SA's listed stocks.
A clear sign that foreign capital is still leaving South African equities in vast amounts. This while the South African government continues to try and convince investors that South Africa is open for business. But the large scale corruption, poor government service delivery, slow economic growth, restrictive labour laws, worries about property rights, crime and general public disorder in the forms of strikes and looting are keeping potential investors away from South Africa.
JSE total market capitalisation:
Market Cap (2019): R16.874 trillion
Market Cap (2018): R13.047 trillion
% change year on year: 29.33%
So as shown in the JSE total market capitalisation above, the value of the overall market capitalisation of the stocks listed on the JSE has increased significantly over the course of the last 12 months (and it would have been even higher if it wasn't for the tariff war between the USA and China). The markets had a particularly positive start to the year, with all four months of the year ending in positive territory. However since then there has been a few negative months. Including September 2019 in which the JSE All Share Index ended down roughly 2%
See our JSE Calendar tracker for more.
Key issues for the market and South Africa during 2019 will be:
Number of trades (2019): 1 704 285
Number of trades (2018): 1 719 112
% change year on year: -0.86%
Volume traded:
Volume traded (2019): 1 451 657 000
Volume of traded (2018): 1 705 751 000
% change year on year: -14.90%
Value of trades:
Value of trades (2019): R103 114 198 000
Value of trades (2018): R107 889 543 000
% change year on year: 0.88%
Foreign purchase/selling:
Net sales/Purchases (2019): -R4 441 728 000
Net sales/Purchases (2018): -R3 192686 000
So year to date (YTD) foreigners have been net seller/buyers:
Net sales/Purchases (2019): -R91.290 billion
Net sales/Purchases (2018): -R20.192 billion
So a year ago foreigners were net sellers of SA listed shares to the value of -R20.192 billion for the YTD while this year they have been net sellers to the tune of -R91.290 billion in the year to date (YTD). That is a R71.1 billion difference between the net buying/selling position last year compared to this year as foreigners accelerate their selling of SA's listed stocks.
A clear sign that foreign capital is still leaving South African equities in vast amounts. This while the South African government continues to try and convince investors that South Africa is open for business. But the large scale corruption, poor government service delivery, slow economic growth, restrictive labour laws, worries about property rights, crime and general public disorder in the forms of strikes and looting are keeping potential investors away from South Africa.
JSE total market capitalisation:
Market Cap (2019): R16.874 trillion
Market Cap (2018): R13.047 trillion
% change year on year: 29.33%
So as shown in the JSE total market capitalisation above, the value of the overall market capitalisation of the stocks listed on the JSE has increased significantly over the course of the last 12 months (and it would have been even higher if it wasn't for the tariff war between the USA and China). The markets had a particularly positive start to the year, with all four months of the year ending in positive territory. However since then there has been a few negative months. Including September 2019 in which the JSE All Share Index ended down roughly 2%
See our JSE Calendar tracker for more.
Key issues for the market and South Africa during 2019 will be:
- Exchange Rate (seems to be see sawing a lot. See our exchange rate page)
- The medium term budget speech delivered by Finance Minister Tito Mboweni on 31 October 2019 sent the rand plunging against all major currencies as it was announced the government needs to find an additional R150 billion over the next 3 years to fund what they need to fund. So this saw the debt to GDP ratio skyrocket and sent the Rand plunging.
- The impact of the 25 bp cut announced by the South African Reserve Bank (SARB) monetary policy committee and the impact will have on the Rand as well as the South African economy on the medium to long term. Additional interest rate cuts are now being discussed considering the muted inflation numbers published by Statistics South Africa yesterday and discussed earlier in this article
- ESKOM's financial woes and weaker than expected tax collections is forcing government to borrow more money, which is negatively affecting the South African exchange rate, and potential credit rating cuts coming for South Africa's government which pushes up the cost of borrowing, and this at a time when government is borrowing more and more
- Expropriation of land without compensation (EWC)
- Potential expansionary monetary policy coming considering the very weak economic growth numbers
- Sluggish economic growth. See our SA GDP page and high levels of unemployment
- Tax increases announced in the budget speech and how it will affect South African consumers spending patterns and potentially increase inflation levels as taxes were increased by rates higher than inflation. In particular lack of bracket creep relief and higher sin taxes, fuel levies and road accident fund levies will hurt consumers.