Naspers: Core Headline Earnings up 45%

In its results for the year ended 30 September 2015, NPN saw consolidated revenue increase by 10% to R37.8bn, driven by good growth in the eCommerce segment. However, in U.S. dollar terms, consolidated revenue came in at $3bn, a decrease of 7% compared with the previous year. Revenue growth from the internet-segment remained strong at 33%, with the segment now accounting for 64% of group revenues, up from 60% a year ago. In addition, businesses outside of SA now contribute 75% of revenues, up from 70% in 2014. Over the period, consolidated development spend declined by 13% compared to previous period. Meanwhile, trading profit grew by 34% to R15.3bn, backed by solid earnings contributions from Tencent, South African video entertainment and the Allegro marketplace. The group’s share of the results of the equity-accounted investments, mainly Tencent and Mail.ru, was R8bn for the period, and includes non-recurring gains of R1.5bn. Lastly, the group saw a 45% increase in the core headline earnings to R8.8bn, with Tencent and the South Africa video-entertainment business the main contributors. In U.S. dollar terms, core headline earnings increased by 22% to $693mn.
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Pan African Resources: Going for Gold

Pan African Resources rose 1.97% during yesterday’s session, after the group released an upbeat trading statement for the interim period ending 31 December 2015. In it, the board advised shareholders it expects results to differ by at least 20% from those of the previous corresponding period. Hence, the group expects earnings per share and headline earnings per share to be a minimum of 10.37 cents. This translates to an increase of at least 85% in the HEPS and an increase of at least 91% in the EPS of the company. This increase can be mainly attributes to an improved performance from the Baberton and Evander Mines, as well as an increase in the ZAR gold price.
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Anglo American: Down down down

Anglo American experienced another torrid day on the market. On the JSE, the stock fell 7.07% to trade at R88.71, while the group lost 7.7% to £4.122 in London. The declines stem from a report by HSBC, in which the banking group cut its target price for the beleaguered company to £4.10. In addition, the bank anticipates “more near-term pain” and also raised concerns about the group’s cash burn and prospective dividend payout. The mining company is currently seeking to raise $3bn by trimming costs and selling assets, and has thus far raised about $2bn by exiting a variety of operations.
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Transaction Capital: Looks to maximize SA Taxi

Yesterday, Transaction Capital ended 0.88% higher as the market cheered their results for the year ended 30 September 2015. In it, the group saw a 19% increase in headline earnings to R393mn, from R330mn previously. On a per share basis, headline earnings increased by 20% to 69 cents. In addition, the board declared a final dividend of 12 cents per share, taking the total dividend for the year to 22 cents, a 38% increase on the previous corresponding period. Looking forward, the group, which has a range of interests, will look to maximize its profits from its SA Taxi unit by doing its own panel-beating and consider an Uber-like model in the metered taxi space.
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Pfizer and Allergan confirm $160 billion mega-deal

On Monday, Pfizer announced it will buy Botox maker, Allergan, for $363.63 a share, or about $160bn, in what is set to be the biggest deal ever in the health care sector. The deal represents a 30% premium of the companies’ unaffected share rice as of 28 October. In addition, the acquisition will see a new company being formed, namely Pfizer PLC, which will relocate its global headquarters from New York to Ireland. This will be done in an attempt to cut the company’s tax burden, with the new corporate tax rate set to come down to 12.5%, from 25% previously. As it stands, the deal is expected to close in the second half of next year.
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Nike Inc: Shaking up the Dow Jones

Coming off its most profitable year in history, Nike confirmed that the group would be looking to buy back $12bn worth of stock over a 4-year period, while also announcing a 2-for 1 stock-split. However, the move is set to shake things up for the Dow Jones Industrial Average and the Dow 30. As it stands, Nike has a weighting of 4.7% in the price-weighted Dow 30, the 6th biggest component. On a split-adjusted basis, this weighting would decline to 2.4%, making it the 21st biggest component on the index. Lastly, the consumer discretionary sector’s weighting in the Dow Jones would fall to 16% from 18%, while all other sectors would represent a larger portion.
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Rand stronger after SARB’s 0.25% hike

Yesterday saw the rand endure a volatile session after the South African Reserve Bank decided to increase the repo rate by 25 basis points to 6.25%. This comes after the governor cited concerns over a weak rand and rising inflation. From a previous close of R14.167/$, the rand moved to trade at a low of R14.212/$ at 15:10, just after the MPC meeting had started. However, at 15:30, the rand started to strengthen as it moved to trade R14.029/$ at 16:20. The rand continued to strengthen as the day progressed and was last trading at just below the R14.01/ $ level this morning. The word from bank FX desks is that market participants should use this dip to sell local currency.
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Lonmin: D-Day

Yesterday, Lonmin’s two listings put in a somewhat contradictory performance. At the close of trade on the JSE, Lonmin had gained 2.27% to trade at R2.25. However, this was in stark contrast to its performance on the LSE, where the group fell 14.29% to trade at £10.05. This comes ahead of today’s deadline where Lonmin’s shareholders will either vote for or against a rights issue. The world’s third largest platinum producer claims it desperately needs this capital injection in order to continue operating. As it stands, shareholders will be offered a 94% discount as it looks to raise $400mn. Lastly, the PIC has pledged its support to take up as much as 25%, potentially bringing its total stake in Lonmin to 32%.
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Wal-Mart Stores: Tops forecasts but strong dollar hurts

After what has been a challenging year for Wal-Mart, with the stock having declined more than 30%, investors were given something to cheer about as the group gained 3.54% after releasing better-than-expected results. For the third quarter, the group saw net profits fall to $3.304bn, or $1.03, down from $3.711bn, or $1.15 per share, a year earlier. This was higher than analyst expectations of a decline to $0.98 per share. For the period, Wal-Mart saw revenue fall by 1.3% to $117,4bn, weighed down by international operations and a stronger dollar. Lastly, the group narrowed its forecast for earnings per share for the full fiscal year to $4.50 to $4.65, from $4.40 to $4.70 previously, higher than estimates of $4.50.
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MTN: A fine extension

On Friday, MTN shed 1.36% to trade at R145.00, taking its total losses since the start of the Nigerian sim card debacle to nearly 25%. In a SENS announcement this morning, the company reassured shareholders that negotiations were underway and that the deadline would be extended until talks were completed. The company announced, “Although the Nigerian Communications Commission (“NCC”) set a deadline for payment of the fine by Monday, 16 November 2015, shareholders are advised that the Nigerian authorities have, without prejudice, agreed that the imposed fine will not be payable until the negotiations have been concluded.”
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