JSE Investing

[BaGearA]

The retro spectroscope always the clever one.

Anglo American (AGL) went up from R63/share to R151 today

Same kinda story for Kumba (KIO)

Lonmin (LON) could be had for R10/share in Feb. Now R38/share.

Lots of volatility. Like Angelina Jolie

The above type of shares for aggressive type investing. Win big loose big.

 

Then there are the more stable shares. Defensive.

Stuff like Reinet (REI), SAB Miller (SAB), Mediclinic (MEI). And of course British American Tobacco. Stuff people use every day.  Shoprite, Woolies. Now sudden growth spurts. More gradual. Like your mother (well, kind of) But even they can fall.

 

One of the shares I have been watching for a while now is Sasol. This one is supposed to be one of those long term buys. Kind of defensive. That is until the Brent oil price starts to rise. And that it is at the moment. $45/ barrel. The Middle east countries can only keep up overproduction for so long... When will it turn upside down? Who knows.

 

Everybody knows America is selling shale gas at the moment. But it is not as profitable as 'good' old crude.

 

Crude oil products are used on a daily base. Everywhere and for everything. What a disaster for South African motorists if the crude oil price hits $120/barrel! Unless you have Sasol shares of course...

How exact;y does one go about doing this 

 

which compnay do you go through and such and such 

 

The more I learn it seems if you don't have A bar to put in Most places like PSG won't even look at you unless you're happy with like 2% growth per year *facepalm

[Bikalot]

How exact;y does one go about doing this 

 

which compnay do you go through and such and such 

 

The more I learn it seems if you don't have A bar to put in Most places like PSG won't even look at you unless you're happy with like 2% growth per year *facepalm

 

Satrix ETF's if you're not actively trading as a suggestion.

[BaGearA]

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Edited July 31, 2018 by BaGearA

[BaGearA]

Okay so what does this mean , they have A predicition type thing for the ETF product where you can enter A lumpsum ( how I will probably start out ) 

 

and It gives predictions as follows 

 

Can someone break this down and explain it to me ( assume I know absolutely nothing ) 

[BaGearA]

.

[Bikalot]

Okay so what does this mean , they have A predicition type thing for the ETF product where you can enter A lumpsum ( how I will probably start out ) 

 

and It gives predictions as follows 

 

Can someone break this down and explain it to me ( assume I know absolutely nothing ) 

 

It is a tracker fund. So the Satrix 40 tracks the movements of the top 40 companies on the JSE, their weighting in the fund is based on the companies market capitalisation. Ensures you have a relatively balanced portfolio.

 

There are many different tracker funds tracking different things, read up on it a bit through the Satrix site, quite a lot of helpful info on there to get started.

[Imploder]

MTN Down 20% on the day! 

 

Nigeria wants their money back.

[Bloukrans]

Anyone on the Sanlam Itrade share trade platform?

[shova1]

The Rand has properly tanked and with it the JSE.

 

Must be some good opportunities in oil though, Sasol could be worth investigating...any thoughts?

[Jakkals.]

The Rand has properly tanked and with it the JSE.

 

Must be some good opportunities in oil though, Sasol could be worth investigating...any thoughts?

Have you done your homework on Sasol? Do you understand their balance sheet?

 

for everyone wanting to jump on the ship, be very careful. a lot of silly money is flowing into the market at the wrong times.

[shova1]

Have you done your homework on Sasol? Do you understand their balance sheet?

 

for everyone wanting to jump on the ship, be very careful. a lot of silly money is flowing into the market at the wrong times.

 

Not yet, will investigate further though.

[SwissVan]

The Rand has properly tanked and with it the JSE.

 

Must be some good opportunities in oil though, Sasol could be worth investigating...any thoughts?

How low can it still go?

 

 

https://www.businesslive.co.za/bd/companies/industrials/2020-03-06-moodys-cuts-sasol-to-junk-due-to-lake-charles/

 

Sasol shares lose 6% as outlook gets gloomier Moody’s downgrades chemicals group to junk, but it has been outside the ratings agency’s investment-grade band since 2018

06 March 2020 - 08:13 karl gernetzky and Lisa Steyn

UPDATED 08 March 2020 - 19:24

 

 

 

Chemicals group Sasol, whose share price has fallen more than 60% over the past 12 months, has been cut to junk status by Moody’s Investors Service on high debt and problems at its Lake Charles project in the US.

Sasol’s share price ended down 5.9% at R159.72 on Friday, having earlier fallen as much as 7.4%. The share price has almost halved so far in 2020.

Moody’s on Thursday lowered the group’s long-term rating to Ba1, the first non-investment grade level, saying the cost overruns at Lake Charles Chemicals Project (LCCP) have burdened Sasol with high financial leverage.

 

Cost overruns at the mega-project prompted the firing of its co-CEOs in 2019 and caused the group to delay its financial results twice. An explosion at the facility earlier in 2020 led it to revise downwards its earnings forecasts for the facility.

The group reported that it had long-term debt of R121.28bn as of its half year to end-December, up 6.3% from the previous comparative period. This exceeds its market capitalisation of just under R100bn on Friday evening.

Sasol said on Friday that it had already taken several steps to manage financial risk, including hedging oil and ethane commodity price exposure, as well as managing costs and increasing working capital efficiency.

“We recognise the challenges presented by the current market environment and acknowledge the outcomes of the ratings agency reviews,” said CEO Fleetwood Grobler.

“We remain focused on managing the factors within our control — delivering safe, strong and stable operational performance and protecting the balance sheet as we bring the Lake Charles Chemicals Project to completion and start deleveraging,” he said.

The revised rating profile is not expected to have a material effect on existing funding costs, the group said. “Sasol maintains a long-term commitment to an investment-grade credit rating,” the statement read.

Kagiso Asset Management head of research Abdul Davids said it was surprising to note that according to Moody’s, Sasol — because of its debt levels — had been in breach of the ratings agency’s investment-grade band since 2018.

Davids said the downgrade did not appear to immediately affect Sasol’s cost of finance. “Clearly a lot of their debt has fixed coupons and they have a bit of floating rate,” he said. “The issue is when they go back to the market to refinance the debt.”

About $1bn is due for refinancing by the end of 2020, but the bulk of it is three to five years out, Davids said.

Davids said the downgrade was also a sign of the times as Moody’s would have considered the worsening macroeconomic environment, the implications of the novel coronavirus and a softer oil price outlook.

Zaid Puruk, portfolio manager at Aeon Asset Management, said that with oil now hovering below $50 a barrel, it presented a significant risk to the group if Sasol had not hedged oil above that level. He said Aeon still expected significant price volatility after Opec discussions and lower demand as a result of the coronavirus.

“We believe talk of a rights issue may be premature for now as LCCP appears to be on the revised track, and [there is no] clarity on additional hedging, asset sales and coronavirus effects.”

According to Davids, with as much as $600m of earnings before interest, taxes, depreciation and amortisation (ebitda) expected to come from the Lake Charles project in the 2021 financial year, Sasol should be able to pay down its debt quickly.

Update: March 8 2020

Edited March 10, 2020 by SwissVan

[Chris_]

How low can is still go?

 

......

 

As it turns out... quite a lot 

[mazambaan]

Did I read some investors suing SASOL execs for not disclosing the depths of the company's problems?  My little view, Lake Charles was a vanity project, SASOL should have stuck to its SA knitting, maybe fiddle in Africa, not the first world.

[Chris_]

Did I read some investors suing SASOL execs for not disclosing the depths of the company's problems?  My little view, Lake Charles was a vanity project, SASOL should have stuck to its SA knitting, maybe fiddle in Africa, not the first world.

 

They'd surely have a case. It seems sasol has been suspiciously quiet for about R400 of share price decline over the last while.

[shova1]

Some further reading for those interested.

 

 https://www.moneyweb.co.za/investing/few-survivors-in-the-market-sell-off/

 

Solid advise in this quote: 

 

"Market declines feel very uncomfortable, but real money is made by investing at the bottom of the market in quality companies at good prices."

 

There certainly are short terms gains to be made in you have an appetite for risk. Perhaps better though to heed the above advise.