Proudly sponsored by
Disable this popup on your account page.

SAB and AB InBev both down quite a bit

David Shapiro on LVMH, Richemont, Apple, BAT, Altria, SABMiller, AB InBev, US economy and Capital Economics.

RYK VAN NIEKERK:  David Shapiro of Safin is in the studio. Good evening, David.

The JSE was rather strong but European markets were really going strong.

DAVID SHAPIRO:  Very strong. That’s on the back of some good results – Airbus, LVMH. LVMH was surprisingly very strong, because we’ve been watching Richemont, where watch sales have been down quite dramatically. Swiss watch sales each month seem to be losing ground and that’s translated into companies like Swatch and Richemont. Richemont is dramatically down from its levels of earlier on this year.

Then we get LVMH, which is mainly leather goods and also Moët Hennessy – in other words drink and alcohol and champagne and so on. Very strong results coming out of them, surprisingly strong. So that’s had a good effect.

We’ve had fairly good numbers coming out of the US as well. Apple is stabilising. I think the Nasdaq is up. I don’t know where the S&P is but Nasdaq is strong on the back of better-than-expected sales numbers from Apple. They are down on the comparative quarter last year, but 40 million handsets sold. I think that surprised on the upside, because this is the SE, this is the cheaper phone that they sold in great numbers, and suddenly there are some bullish views coming out. That share is up 7%.

RYK VAN NIEKERK:  Well, it’s the biggest company in the world. To surprise on the upside and to see this reaction says a lot.

DAVID SHAPIRO:  Whether it’s sustainable – I’m not an Apple bull. I like the company very much but I think they’ve gone ex-growth.

There was some impact on our market. Our industrials are reasonable. We were held back by tobacco companies. British American Tobacco came back. There again, I think taking a lead from Altria, whose results were down.

And then I couldn’t work out SAB and AB InBev. Both of those were down quite a bit. Whether this is on the back of calls by SABMiller shareholders to get AB InBev to increase the number – whether that pulled it down I don’t know.

RYK VAN NIEKERK:  But the PIC joined the fray. They are talking to SAB. Obviously if you are shareholder you want more money. What is your take on this? Do you think it’s justified?

DAVID SHAPIRO:  Well, if you make an offer, you make an offer. We are moaning, oh, the pound’s gone down, we want more money, we are selling it cheap. Why are we selling it cheap? Not because of SAB. It’s simply that this is a currency issue – that the pound’s down. I was happy. If we go pre the offer, we are still up dramatically. And if you look at SAB’s results, I still think this is pretty good offer.

RYK VAN NIEKERK:  Later tonight the Fed will announce the interest-rate decision. The expectation is mostly that it will be left unchanged. What do you think?

DAVID SHAPIRO:  Not yet. But it depends on how you interpret the US economy. There are so many issues ahead. They’ve got an election – I don’t think that’s going to sway Janet Yellen, but she’ll be looking at labour numbers, because last time she held back on the disappointment. The last time I heard her speak, those were the May numbers. Then suddenly we had the June numbers, which were incredible. And also we are starting to see inflation creep up, so there are good job numbers, good inflation. I saw the durable goods number today, which is stable. That’s expected in this kind of economy.

Capital Economics is a consultancy or a research firm. I read a note from them yesterday. They are a respected crowd; Roger Bootle is a very well respected economist in the UK. They are calling for two rate rises this year. They feel that the economy is strong enough, or conditions are fairly strong for them to raise rates. But that’s not consensus. I think consensus is maybe one towards the end of the year.

RYK VAN NIEKERK:  David Shapiro is from Sasfin.

AUTHOR PROFILE

COMMENTS   0

You must be signed in to comment.

SIGN IN SUBSCRIBE

or create a free account.

Free users can leave 4 comments per month.
Subscribers can leave unlimited comments via our website and app.

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR
BTC / USD

Subscribe to our mailing list

* indicates required
Moneyweb newsletters
INSIDER SUBSCRIPTION APP NEWSLETTERS PODCASTS RADIO / LISTEN LIVE VIDEOS WEBINARS TRENDING

Follow us:

Search articles:
Search JSE companies: