JSE in the Cross Hairs (and Proposing Changes) | Don't Fight the Trend

Worldwide Markets – Episode 656 (12 November)

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1) JSE Under Pressure 🏛️⚖️

Two issues in the spotlight:

a) Competition Commission Complaint
A2X alleges JSE is being anti-competitive around BDA & settlement. This could have a long regulatory process. No quick outcomes expected.

b) Matengu Allegations
Matengu alleges share price manipulation and claims to have emails implicating JSE directors.

• JSE has fired back and asked: Produce the emails.
• There is also a clear seller overhang (ex-director wanting out), which explains the price pressure more plausibly.

Takeaway: Overhang selling often looks like manipulation. But without proof, it's just selling pressure.

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2) Should We Scrap SENS Announcements & HEPS? 🤔📰

The JSE is consulting on two potential changes:

• Reduce some SENS announcements (e.g., administrative ETF notices, floating rate resets, etc.)
• Possibly remove HEPS (Headline Earnings Per Share)

Simon’s view:
🚫 Do not remove HEPS.
HEPS is invaluable as an adjusted earnings measure, especially in SA where one-off corporate events are common. The process cost argument doesn’t justify removing a critical metric.

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4) Don’t Fight the Trend 🟢📈

Two strong trends right now:

a) Gold 🥇

• Back above $4,100/oz after two brief red weeks.
• Long-term trend still strongly up.
• No point trying to call tops – enjoy the trend while it runs.

b) Rand 🇿🇦💪

• Strengthening since the “liberation blowout” in April (~19.90).
• Now around R17.14 – and trend still down (strengthening).
• This is not just USD weakness.
• Big inflows into SA bonds + stronger commodity prices supporting.

Next key level: R17 → If broken, expect move to low R15s.

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5) Results Round-Up 📊💼

Company	Sector	Key Takeaways	Outlook
Stor-Age*	REIT / Self-storage	SA strong, UK okay. Trading near NAV (R17.77). Yield ~7%.	Fairly valued, solid operator.
Premier Group	Bread, food manufacturing	Revenue +6%, HEPS +27%. Efficiency gains + declining input costs.	Not cheap, but high quality compounder.
GE Aerospace (formerly General Electric)	Aviation Engines & Service	75% of commercial planes use GE turbines. Service business = high margin recurring revenue.	Trend beneficiary as global travel grows. Expensive, but maybe deserved.

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6) KAP (PG Bison, UniTrans, beds, auto aftermarket) 🛏️🚚🛠️

• Earnings slump → PE looked blown out, but forward expectations show return to single-digit PE once capex is absorbed.
• Small-caps remain deeply unloved.
• Worth watching, but needs a catalyst.

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7) Gold Miners – Pick Your Favourite ⛏️✨

If gold keeps running, most producers will make serious money.

Simon’s preferences:

• AngloGold Ashanti* (ANG) – strong price action, holding trends well.
• Pan African (PAN) – up 7x since Oct 2022.

Others:

• Harmony – now has meaningful copper exposure.
• Sibanye* – gold + PGMs.

ETF option: Satrix RESI* – doubled this year (helped heavily by gold).

⏳ How long to hold?
While gold trend remains intact.

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Events & Dates 🗓️

• Monday 17 November @ 10:00 – 91 Income ETFs webcast
  Book: justonelap.com/events
• Friday 8 December – Final Power Hour:
  “Position Your Portfolio for 2026”
  Bookings open next week.

Simon Brown

* I hold ungeared positions.

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