SA: Investment grade within two years?

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 Monday, 19 October.

Simon Brown (0:15)

Chinese GDP year on year data came in a couple of hours ago, 4.5%.

I'm Simon Brown, coming at you live and loud from the Moneyweb Studios in Gauteng, Johannesburg on the show today. Nick Kunze, Sanlam Private Wealth. We've got US bank earnings coming in, Goldman Stacks, the standout, JP Morgan, a bit of a miss. But I also want to dig into MTN. Massive run up to July, what? Three fold up and then a bit of a sell off. I'm not sure it's expensive. We'll get Nick's view. We're going to be chatting with Chris Holdsworth. He is a CIO at Investec Investment Management. Higher local inflation expected, but improving outlook for the fourth quarter and the journey to investment grade rating for the country could perhaps be only just two years away. Maarten van Doesburgh, he is from the Cape Peninsula University of Technology, turning our commodity windfall into real economic growth.

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, 10 billion grand Vendetta investment positions, Zinc mined to become one of the world's largest, and from the FM inside the dubious science or shop rights CEO pay scheme. Morning markets, US was red on Friday, S&P 1.1% lower, Nasdaq off 2.5%.

The East is green, we've got Sydney up a third of a percent, Tokyo up 1.8%, but then Hong Kong is closed for day after Chung Ying Festival, also means no 10 cent. Commodities mixed, gold futures red, $4,200. Brent is green, $107.90. Platinum is green, $1,663. And Palladium is red, $1,133. The round is $1,646. Bitcoin $82,500. And top 4D opening call, red open expected, $328.00 or 0.3% lower.

SPEAKER_1 (2:14)

MoneywebNOW on the money, also available on podcast.

Simon Brown (2:19)

Tilly Nye, Nick Kunze, Sanlam Private Wealth. Nick, appreciate the early morning time. You and I talk lots around US earnings season. The second quarter was an absolute standout. The third quarter started fairly good. Banks as per usual. As I said, Goldman Sachs, well, the EPS was just over $17.00 the market was looking for. I think sub-14.

JP Morgan, surprising a miss, but broadly, maybe not as strong as second quarter, but growing and good numbers coming through. American economy is doing just fine.

Nick Kunze (2:48)

Yeah, morning sir, morning, sir, ministers. Yeah, absolutely. American economy is ticking over just fine. Thank you very much. That EPS and Goldman's, as you said, 17.01.

One company better. Really was a good, a good set of results. And there was an old adage, I mean, you've been around a while like me, Simon, that financials tend to lead markets up. They tend to lead them down.

And actually, all these bank stocks actually peaked in mid August. They're down about sort of 39 percent. So it's worth keeping an eye on that. But if we drill down to the two earnings, I mean, it really was sort of a tale of two different trading desks. I mean, Goldman's equities business growing at 72 percent. The record says there's Goldman traders really earning their keep. And on the other side, there's JP Morgan. They missed the EPS because that fixed income market is slowing down quite a bit. They're going to be exposed to that fixed income. We all know those bond yields are down, right? So yeah, two very different markets. But overall, I mean, it's difficult to put the brakes are not on this US market just yet.

Simon Brown (3:48)

Yeah, I take your point on that. And if we look at, if we switch to the China number, which came out a couple of hours ago, there's another strong economy, 4.5. Now, different drivers. I think China is sort of doing the export story. The US has got the AI story. But another good number.

Nick Kunze (4:06)

Another good number. And heaven knows that the world needs a strong China. You know, the world's second biggest economy, you know, it's a lot of us in South Africa have been well aware of what happens there with exposure to the likes of Tencent that you mentioned earlier.

And we really need the economy to turn around. And, you know, mid 4% is a very nice number. And you can see that this morning, nice little bit of risk on as well. So we might still get that sort of a Santa Claus sort of grind higher into year and hopefully off the set.

Simon Brown (4:36)

Yeah. And then maybe some run in Tencent, to your point, Tencent's been had a bit of a horror year, which has flowed through. I want to touch on MTN. We've tried to talk because there's no particular news out, but the chart is astounding. It was what, 3X up to the middle of the year.