Motheo Khoaripe  00:00

Peter Brooke, Portfolio Manager at Old Mutual Investment, covering the markets with us today. The JSE ending the day in negative territory, really pulled down by mining shares that were down more than 2%. Financials are up more than a half a percent . The industrials in positive territory, and something you don't see every day, Peter. Textainer, the lessor of containers, up more than 40%. What happened there? I hear there's a big deal that's coming through there with the company privatizing.

Peter Brooke  00:33

Yes, that's right. So, there's a bid for the entire company from... as you may well know, they do shipping containers, which is a very long term asset, which has got quite good cash flow, it's very much a financials type business where you've got a lot of stock in there. And that's an attractive asset to a certain type of financial buyer, and they bid for that. The good news is some shareholders are a lot richer today. The bad news is this is another delisting from the JSE.

Motheo Khoaripe  01:12

And why would a company that's relatively doing well want to go private then? Is it because of the buyout or there's something that was a scope for the company?

Peter Brooke  01:21

At the end of the day, there's an offer from a potential buyer, they're offering a very big premium. So, the board can either refuse it or embrace it, in this case, the board has been positive, they're saying this is good for the company, it gives them a better future. But at the end of the day, it's up to shareholders to decide. So, they can either sell their shares or not. So, we've had some failed bids, this one I think will probably go through unless we see another buyer come up and offer to pay a higher price.

Motheo Khoaripe  01:55

Of course, Textainer shares spiking more than 40% on that deal of 7.4 billion rand from Stonepeak taking over Textainer. But looking at Sasol, they came through today saying Transnet's logistics failings are still a risk to the business.

Peter Brooke  02:16

That's right. So, you can see in terms of their export volumes of coal, that there wasn't much progress there. I think this is a standard problem that we're well aware of. But the good news in terms of their statement was that their synfuel volumes are up 7%. And they seem to be getting under control of their own coal issues. So, this is coal that's being mined that is feeding into the Secundas synfuel plant.

Motheo Khoaripe  02:44

And looking at the likes of Pick n Pay, they were up close to 8% today. Another retailer, Truworths and Spar also up 3%. Really, the retailers having a better day on Monday.

Peter Brooke  02:55

Ja. Look, Pick n Pay is not a great one, because it's obviously been down hugely last week on the back of the management changes and further information on the trading statement. But broadly, I would agree with you, you can see a very clear bias within the market towards more SAInc type shares, retailers, financials doing better, and resources on the downside.

Motheo Khoaripe  03:25

And on Friday, of course, Tiger Brands announcing a new CEO to come through and take over the business. They've had their fair bit of bad news and deciding to change the strategy now.

Peter Brooke  03:37

Ja, so Tiger Brands is interesting, because actually, at the same time, they produced quite a good trading statement relative to market expectations, which were for some pretty bad numbers. So, that helped. It also then got the... so, the market liked the new CEO strategy, we obviously had the big fall in Pick n Pay's price when they removed their CEO. Personally, I'm intrigued by this change, because what you've got is you've actually got Noel Doyle, who took over, sort of stabilized the ship, has improved the metrics a little bit. But clearly from the statement, you can see the board is sort of looking for somebody to push the growth faster and to sort of revitalize the company. And they've chosen Tjaart Kruger who very successfully helped Premier drive their bread business, which is obviously a big part of Tiger Brands. But he's relatively older, and once again, we seem to be recycling CEOs from the past when things were a bit easier in South Africa. But he's got a fixed contract. So, I see this very much as a strategy to bring as a transition strategy, whereby they'll then-

Motheo Khoaripe  04:57

So, they're buying time before they get a permanent CEO?

Peter Brooke  05:00

Exactly.

Motheo Khoaripe  05:03

Alright, we'll see how that pans out of course. Noel Doyle had been at Tiger Brands for quite a long time, the company announcing that he'd be leaving on a Friday. Peter Brooke, Portfolio Manager at Old Mutual Investment Group covering the markets today.