The week that was: MTN, EasyEquities, Moderna, Peloton and Elon’s $25bn Twitter poll

By Investment Correspondent, Justin Rowe-Roberts

There’s never a dull amount in the financial markets. Last week, a BizNews community member made things extra interesting, calling for an end to the local vs offshore market debate. Magnus Heystek has been an advocate for offshore exposure and diversification for a number of years now with his strategy bearing fruit for his clients. The community member, who wished to stay anonymous, has given Heystek and Viljoen R500,000 each to invest on his behalf. The time horizon is five years and the winner will be the money manager who generates the better return over the five-year period. Heystek opted for three different offshore products, in which he has previously invested as he believes the tech-centric investment theme has the potential to go even higher. Piet Viljoen, who has been one of the best performing local fund managers over the last few years, has allocated the entire principal into the Counterpoint Value Fund. He’s personally invested in the fund, so the thesis is to align his interests with the clients. Charles Savage, CEO of Purple Group and EasyEquities, had his say on the investment challenge and called a winner, too.  

The financial technology space on the local bourse was in the limelight last week. Telecommunications provider MTN posted an upbeat quarterly update, surging more than 20% during the week. All the issues that plagued South Africa’s second largest telco during 2020 – such as issues in Nigeria and concerns about the robustness of the oil price – have become a distant memory. It’s Piet Viljoen’s largest position in the Counterpoint Value Fund. He says the business is “firing on all cylinders”. 

Onto the Purple Group, the holding company of South Africa’s largest investment platform, EasyEquities. This is a recent addition to the BizNews portfolio, with Alec Hogg staggering purchases of the holding company in three equal tranches, with the average purchase price around the R1.40 level. The shares are now trading around R2.30, a short-term 65% gain. Hogg’s investment holding period is “forever”, built on the ideologies of Buffett and Munger, until there’s a fundamental shift in the business. So, although a short-term near 70% return is well received, it simply is nothing more than the foundation of more to come. 

In the fintech sector, legacy-stricken Net1 Technologies announced the acquisition of the Connect Group, which services small- and medium-sized businesses in the informal economy, making them an ideal fit into the Net1 stable, according to the man in charge Chris Meyer. The acquisition is massive relative to the market capitalisation of Net1 with Meyer calling the corporate action “transformation” on BizNews after the announcement. A recent management overhaul at the fintech firm has investors excited about its prospects going forward. 

Lastly, on the local business front, decorated mining executive Mark Cutifani will be retiring in 2022, after more than nine years at the helm of Anglo America. He will be replaced by company insider Duncan Wanblad. Piet Viljoen says the transition will be seamless and is confident an insider is best suited to be Cutifani’s successor. 

In the US markets, there were two particularly interesting market moves. Pharma company Moderna, whose only commercial product is the Covid-19 vaccine, nosedived 30% last week on the back of an earnings miss and news that competitor Pfizer is making progress on a Covid-19 pill. Online fitness equipment business Peloton also came crashing down; its growth prospects were slashed when people started heading back to the gym as the pandemic eases across the world. 

On top of all of this, the world’s richest man – Elon Musk – has called on his Twitter followers to ask whether he should sell over $20bn in Tesla stock. Talk about a man of the people. 

Lots to digest. Plenty to ponder. Roll on the new week…

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