JSE at yearly lows: Time to buy or brace?

SPEAKER_1 (0:02)

You're listening to the MoneywebNOW podcast series with Simon Brown. Live streamed every weekday at 6:30 a.m. Monday, 12 October.

Simon Brown (0:15)

The US bond market is closed today for Columbus Day. Equities are open, but expect lighter volumes. I'm Simon Brown coming at you live and loud from Moneyweb Studios in Khartan, Johannesburg. On the show today, Nick Kuze, Sanlam Private Wealth. Top 40 closed its lowest weekly close for the year. Opportunity or concern? Well, as I go through the list, there's lots of reasons why it is down. The newest earnings season starts this week with the banks. Man, expectations are huge, but the last quarter knocked it out the park. We're going to be chatting with Zandile Makhoba, lead specialist research and insights, Liberty. Sanfricans overspend on celebrations. I don't know that that surprises me. And then PwC, talking to them around the state of our local miners. Interestingly, reserves moving higher. This podcast is brought to you by StandLib Asset Management. Invest in more global opportunities through their partnership with JP Morgan Asset Management. Morning headlines, Moneyweb is Afrimat cheap. Despite the dire trading update, Smart Money may be starting to see it that way. Businessday, inside, shop rights, great banking flotation. Money marketer county evolves as retailer eyes broader financial role.

Money markets, US was green on Friday, S&P 0.6 higher, Nasdaq up 0.5%.

The East, green. Sydney, 0.5% up. Tokyo is closed, sports day. Hong Kong is up 0.2% and Tencent up 0.6%.

Commodities are mixed, gold futures are green, 4,228. Brent is lower, $102.83.

Platinum lower, 1,710. And then Palladium higher at 1,161. The round is 1649 Bitcoin, 83,500. Top 40 opening call, green open expected, 550 points, little over 0.5% higher.

SPEAKER_1 (2:10)

MoneywebNOW, on the money, also available on podcast.

Simon Brown (2:15)

29, Nick Kuze, Sanlam Private Wealth. Nick, appreciate the early morning time. I was looking at the index charts over the weekend. Top 40 caught my eye. Lowest weekly close for the year. Truthfully, the previous week was the previous lowest and it wasn't many points lower. But certainly after a strong 2025, this has not been a great year. We are down, but there are a lot of moving parts.

The precious metal miners, consumer stocks with a 30 rand fuel price, Naspats in process, there's a lot dragging us down. There's no sort of single story.

Nick Kuze (2:49)

Yeah, morning Simon, morning to the listeners. Yeah, you know, we start to the year with there was so much hope, wasn't there? After such a strong oil share and we all saw the headline numbers and this was our chance. And obviously the wheels came off at the end of February with the start of that war in Iran. But, you know, I'm not quite convinced that, unfortunately, I don't know if it's yet an opportunity. I think, you know, the risks are certainly becoming more elevated. And yes, to your point, the top 40 is cheap on the numbers. We're trading at about 10 times earnings. You're getting a four and a half percent roughly dividend yield. But and the stock market is down itself. The oil should down about 7 percent. But, you know, it's the old adage, Simon, you know, cheap can get cheaper and cheaper for a reason. And so I have this economy, actually, if you remember, contracted 0.2 percent in the second quarter, the first four and seven quarters. If you look at, I think, the OECD or the IMF mentioned this, you know, we were only one of two G20 economies to shrink. The other one was Saudi Arabia, and that was hit by that energy shock.

Add in a hiking Fed, 10-year yields above 5 percent, oil at $100, et cetera. PMR is actually also in contraction at 49 I mean, it really, without having to paint too much of a dire picture, you can actually understand why we are where we are.

Simon Brown (4:05)

That was my thought. When I saw the chart, it was like, that's a horror. Then you start to think about it and it's like, hmm, okay, it actually kind of makes some sense. And to be fair, we're down a little over 5 percent for the year. I mean, it's not a crisis. We would look at US markets at all time highs, but we're not US, we don't have the AI. So let's go to the US. Earning season kicks off this week. As always, it is the banks. And after what was a stellar Q2, I'm surprised by the expected strength for Q3. That US economy is storming.

Nick Kuze (4:37)

Yeah, and now you know why the dollar has been strong as it has been, not just that flight to quality. It's because the earnings, the US earnings, we do often have to look at these companies besides all the other geopolitical risks out there. And that market is solid and is the world's biggest economy. And as you said, earnings season kicks off tomorrow. We get Wells Fargo, Goldman Sachs, Citigroup, JP Morgan, nice big one, and Morgan Stanley, all scheduled to report. I mean, analysts are expecting to see about, as you said, 50% year-on-year quarter once again. But it is very much quite different sort of sectors. Energy is going to be up 128%, you know why.