Legendary British manager Bill Shankly famously told the world: “Some people think football is a matter of life and death. I assure you, it’s much more serious than that.” For the South African nation, rugby plays an identical role. David Bacher proves the point in Corion’s analysis of investment markets in August – sharing a Bokke-based presentation relating top players with specific streams. He spoke to BizNews editor Alec Hogg.
Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.
Watch here
Listen here
Highlights from the interview
In this interview between Alec Hogg and David Bacher, they discuss South Africa’s recent sports and financial developments. Alec opens by celebrating the Springboks’ recent rugby victory, noting its impact on national pride. David highlights how this win influenced Corion Capital’s “Decoding the Month” video, which was timely released after the match.
The conversation shifts to financial markets, where David explains Corion’s approach to simplifying complex market data for investors. He recounts the market volatility in August, noting significant fluctuations in equity markets and the impact of the U.S. Federal Reserve’s interest rate decisions. David also discusses the effects of the Japanese yen’s unexpected interest rate hike on global markets.
Alec inquires about specific investment strategies, leading David to explain Corion’s practice of buying during volatility. The interview also touches on South African economic indicators, including interest rates, currency strength, and foreign investment trends, suggesting a positive shift in investor sentiment.
The conversation concludes with references to key figures and events in South African sports, such as the rise of young rugby talent Sacha Feinberg-Mngomezulu and the strategic plays of coach Rassie Erasmus. David praises the unifying power of sports in South Africa and expresses hope for continued economic stability and growth, driven by both market conditions and national unity.
Edited transcript of the interview
Alec Hogg (00:41.007):
David, I just introduced you with a Hier Kommie Bokke. Very appropriate given what happened over the weekend with the Springboks pulling victory out of the jaws of defeat. I suppose if they hadn’t won, you’d be rethinking today’s presentation?
David (01:28.527):
Definitely. We debated having two versions but decided to be optimistic. Luckily, the Boks came through, and we managed to send out our “Decoding the Month” video just as the final whistle blew.
Alec Hogg (01:56.143):
Indeed, and here we are. The country’s still celebrating, but let’s shift focus to the markets. Why does Corion Capital put together a monthly report on market performance?
David (02:39.343):
At Corion, our values are simplicity, engagement, and agility. Investing can be complex, so we aim to break it down simply and engagingly to help people understand market events.
Alec Hogg (03:11.889):
Let’s get into the presentation. You’ve drawn on a theme from 1995 with PJ Powers’ song “The World in Union.”
David (03:31.109):
Yes, a pun on “union,” as markets were united in volatility during August. Major indices like the S&P 500 had their biggest one-day losses in two years due to recession fears and a stronger yen, but ended up positive by month’s end after the Fed’s announcement on interest rates.
Alec Hogg (04:38.799):
What exactly is the Japanese carry trade?
David (04:45.359):
It’s when investors borrow at low interest rates in Japan and invest in higher-yielding assets elsewhere. It works until something disrupts it, like the unexpected rise in Japanese interest rates, which caused a major market drop.
Alec Hogg (05:58.957):
And you took advantage of this?
David (06:08.485):
Yes, when markets are volatile, sometimes we buy first and research later. During the volatility, we bought more as the fundamentals hadn’t changed, and it benefited our clients.
Alec Hogg (07:15.825):
Interesting. Moving on, you’ve included Jesse Kriel in your presentation. What’s the link to US debt?
David (08:05.207):
We labelled it “Creeling Softly,” with Jesse Kriel looking at the rising US debt as a reminder of ongoing concerns about global debt levels and potential impacts on borrowing costs.
Alec Hogg (08:58.171):
On to interest rate cuts?
David (09:24.133):
Yes, the Fed’s announcement at Jackson Hole indicated upcoming rate cuts, which is favourable for equity markets and economies like South Africa’s.
Alec Hogg (10:24.569):
You’ve also featured Sacha Feinberg-Mngomezulu in your presentation.
David (10:51.343):
Yes, he’s a rising star. We used his story as a metaphor for gold prices reaching $2,500 an ounce this month.
Alec Hogg (11:31.429):
And Eben Etzebeth—do you think there were mind games involved with his selection?
David (11:52.261):
Rassie doesn’t play mind games, Alec. We titled this slide “A Breath of Fresh Air,” highlighting the Rand’s strength and its impact on our bond market and financial stocks.
Alec Hogg (12:53.071):
Good news indeed. Our captain also features in your next slide.
David (13:16.453):
Yes, we labeled it “SA Seeing Green” due to positive movements in financial shares and bonds, driven by anticipated interest rate cuts and foreign investment returning to our markets.
Alec Hogg (14:18.299):
What impact might this have on asset classes?
David (14:37.541):
Increased demand could lead to higher prices. We’ve seen local institutions moving funds offshore, and with foreign investors returning, we could see significant rallies in our markets.
Alec Hogg (15:59.611):
Fascinating. Now, the individual performers on the JSE?
David (17:00.133):
Interest rate-sensitive shares like GrowthPoint and Mr. Price performed well, while resource shares like Northam and Goldfields struggled due to weaker commodity prices and a stronger Rand.
Alec Hogg (18:06.043):
Northam’s CEO mentioned an existential crisis for platinum companies. Let’s wrap up with Rossi Erasmus.
David (19:47.397):
We closed with “We Have Been Erasmatized,” appreciating Rassie’s leadership and the unity he brings. It’s great to see such national pride.
Alec Hogg (20:21.743):
Indeed. And our Minister of Sport?
David (20:30.617):
He’s been very positive and engaged. It’s refreshing to see such involvement in promoting unity through sports.
Alec Hogg (20:59.021):
Absolutely. Thanks, David. David Bacher from Corion Capital and I’m Alec Hogg from BizNews.com
Read also:
