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Mediclinic News : ‘We are seeing a turnaround in Mediclinic’

Title

‘We are seeing a turnaround in Mediclinic’

Date

2017-02-09

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News Description

MONEYWEB David Shapiro considers today’s market – commodities, mining shares, Mr Price, retailers, Cashbuild, Spar, Shoprite, Naspers, Mediclinic, Group Five and Royal Bafokeng Platinum SIKI MGABADELI: Good evening and welcome to the SAfm Market Update with Moneyweb. My name is Siki Mgabadeli. There was no pomp and ceremony on the markets today because we ended up just 0.2% at 51 904 on the all-share. The Top 40 is up 0.2% as well. The rand is at R13.42/dollar, R16.78/pound and R14.31/euro. It’s a mixed picture on commodities. The gold price is down about 0.5%, platinum is up a little bit; it’s sticking above $1 000/oz, and Brent crude is back above $55/barrel. Gold miners are down 2.7%, financials up 0.1% and industrials up 0.5%, with resources down 1%. Watching those visuals from the National Assembly you’ve got the Economic Freedom Fighters now entering the parliamentary precinct, so we are set for an interesting day. David, no pomp and ceremony here. DAVID SHAPIRO: No one on the screen at the moment is wearing Mr Price – not even the EFF. Those look like real designer overalls. SIKI MGABADELI: What does that mean for Mr Price’s own share price? DAVID SHAPIRO: Mr Price was up today, strangely enough. Up about 4%. Quite strong in retailers. It was a very good day in retailers. All the way up. The one thing we have to watch – and I’m not sure what the story behind it is – is Cashbuild. It’s up 3 or 4%. This is Thursday. Over the last four days that share is up 14%. No story behind it. I’m not sure what’s driving it. SIKI MGABADELI: Why? Spar Build It did not give us a good picture of what’s happening in that sector. DAVID SHAPIRO: No. In fact Spar and Shoprite were down today as well. And if you look at Group Five’s trading update it just points to a lot of issues in the construction industry. So I’m not sure why there is a sudden rush. There might be a reason. SIKI MGABADELI: Maybe Cashbuild is buying Build It. [Chuckling] DAVID SHAPIRO: I’ve always liked Cashbuild. I like the way it’s run. SIKI MGABADELI: Why? DAVID SHAPIRO: When I say a low level, I don’t mean that in a disparaging way. It’s well placed in the country and it provides what you could call the bakkie builders and maybe small-time construction businesses, etc, those people who come and buy a few bags of cement or buy a few window frames. But, make no error, this is a big business. I think it’s well placed in this kind of economy where at the low end of the market you’ve got this very strong demand still to build houses – even to build houses room by room. SIKI MGABADELI: I mentioned the platinum price – it’s solidly above $1 000/oz. DAVID SHAPIRO: It’s above $1 000. Gold is up, oil was up, copper was also up because of strikes in Chile. And yet mining shares are all down. Even the heavyweights – Anglos, Billiton, Glencore, all of those were down. And what might be happening is that investors are just taking a step back, nervous that the run that we’ve seen in commodity prices might not last. In other words, we’ll start to see a pull-back. There are a lot of analysts that are coming out very cautious about the iron-ore price, which remains over $82/ton, saying that supply that’s going to come on, and perhaps a lower demand for China, could see this price retreat quite dramatically. So I can’t reconcile it with the fundamentals. But that’s been one of the features today. In fact, it’s been the second day in a row we’ve seen mining under a bit of pressure. SIKI MGABADELI: Naspers up again. Tencent was up this morning. DAVID SHAPIRO: Tencent up. Naspers is not keeping track with other IT companies like in the US, which has really led the S&P and the major indices up there. That’s differentiated US markets from other markets where there has been this very strong rise in tech shares. But for some reason it just seems to be flat-lining in China. We are not seeing much. The currency might have a bit to do with Naspers’s indifferent performance. But what is happening is Mediclinic is strong. We are seeing a turnaround in Mediclinic. This is a company that was down dramatically last year, but we’ve started to see some buying coming in at these lower levels, believing maybe the worst is behind. And also CapCo up for a second [day]. Hammerson also up. These are UK-based property companies also having a fairly good day. SIKI MGABADELI: And we watch them quite closely because of course of the Brexit effect. DAVID SHAPIRO: Group Five came out with a trading update that was a lot worse than the market had anticipated or that they’d led us to believe in December. Conditions have deteriorated and they extended their loss. They were down about 8 or 9%. There are a number of issues that are weighing on the group. But as well as the manufacturing and mining numbers that have come out, even though they are historic up to the end of December, it still shows what a tough year it was. And, if you look at those, if you translate the manufacturing numbers and you translate the mining numbers, it could mean that growth is perhaps even lower than everybody has expected, or certainly pushing it below 0.5% or those levels. SIKI MGABADELI: I was going to ask you about Royal Bafokeng Platinum. They are telling us that they are expecting to return to a profit. DAVID SHAPIRO: I don’t know why – maybe it’s lower than the market was expecting. The trouble is, when you look at trading updates, you have to measure them against what the market was expecting. So what on the face of it appears to be a very strong result might not be where perhaps analysts had marked in a turnaround. Much better results than last year out of platinum, but it still points to tough issues ahead.
Created at 2017/02/16 03:15 PM by Mediclinic
Last modified at 2017/02/16 03:15 PM by Mediclinic