Reit balance sheets strongest in a decade

SPEAKER_1 (0:02)

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

Simon Brown (0:15)

US balance of trade data due this afternoon expected minus 102 billion dollars. I'm Simon Brown coming at you live and loud from the Moneyweb Global Headquarters in Johannesburg, South Africa. On the show today, Jimmy Moyaha, I want to dig into the the Sanlam buying Santam story, but also Sappi. They got the proposed JV on their graphic paper being nixed by the Europeans. That's an important JV for them. Ian Anderson, Merchant West Investments. September Reit results. Some strong dividend increases coming through. And then we chat in to Cars.cozr on how the fuel price is changing consumer buying habits as we shop for a car.

This podcast is brought to you by Stanlip Asset Management. Invest in more global opportunities through their partnership with JP Morgan Asset Management. Morning headlines. Moneyweb once off gains are masking financial strain at state owned enterprises. Collective profit is a mirage for many. Business day. SA's wheat harvest set to hit 8 year low, pushing imports higher.

Morning markets. US is green. S&P 0.7 and Nasdaq almost a full percent higher. Easter's all green. Sydney 0.3 percent up. Turkey is 0.2. Hong Kong almost a percent. Tencent is 0.9 percent up.

Commodities are red. Gold futures, 4,152. Brent is $100.67.

Platinum, 1,720. Palladium, 1,171. Durand is 1664 Bitcoin, 85,400. And top 40 opening call, green open, 263 points, 0.25 percent.

SPEAKER_1 (1:58)

MoneywebNOW on the money. Also available on podcast.

Simon Brown (2:02)

Cheney Nga with Jimmy Moyaha. Jimmy, I appreciate the early morning time. Let's kick off with the Sappi statement. They're trying to merge their graphic paper. I've spoken to Steve Benney, CEO a number of times, no doubt you have. He talks about an industry in structural decline. We don't buy magazines anymore, but the EU is maybe not so impressed. This is an important deal for Sappi, my senses.

Jimmy Moyaha (2:25)

Good morning, Simon. It's an absolutely important deal. I mean, if you look at just some of the headline numbers around that deal, 12 mils across Europe, assets worth 1.4 billion pounds or billion euros rather, that's quite a significant size if you were looking at a special purpose vehicle and a joint venture between the two companies.

But the overarching challenge here is, of course, as you rightly elude, the state of the market and you see that more in how the market is performing entirely. I mean, just take a look at Sappi and Mondi both approaching the International Trade and Administration Commission recently around those paper tariffs. Mondi received their ruling yesterday from ITAC that they would not be looking to increase those paper tariffs because the primary market that would be impacted by that would be, of course, the European market and there's a separate European agreement to foster trade between Europe and Africa and Europe and SADC. And unfortunately, the paper industry is on the receiving end of some lower tariffs as a result. But to your point, Sai, around the fact that we no longer buy magazines, it's not just magazines, it's magazines, it's newspapers, it's menus that are no longer printed on paper. There's been, and we don't realize it, but really the advent of digital technology has brought about a serious existential threat towards the print world, right?

It's not just in South Africa, it's a global phenomenon. Everybody has gone paperless effectively, and everybody's pushing for, let's go paperless. You don't take receipts when you go to the shops. It's the little things, but if you think about it, and you think about the fact that printing company, paper companies like Sappi, like Monty, fundamentally rely on a demand for printed products in order for them to have something to do with those meals, then clearly this seems a little more logical than what we make out.

Simon Brown (4:23)

Yeah, absolutely. It is, as you say, it's wider than just magazines. It's everything. Although I do say in my defense, I have a piece of paper in the desk right now. I'm trying to do my bit for Sappi. Let's change track. I was actually looking at Sanlam yesterday morning and thinking to myself, because the stock's been sold off for a fair bit this year, and I'm thinking to myself, I wonder if there's some value here, I wonder if there's some opportunity. Then they pop up to buy Santam. I mean, we saw Old Mutual do it with their short term insurer, Mutual and Federal, 20 plus odd years ago. I mean, I suppose it makes some sense for Sanlam. I don't know about Santam. Your thought?