Monday, 28 September 2015

Samurai Summary: Top Tweets 28/09/2015

A shake up in Spanish politics has left one region in the hands of pro-independence party under the leadership of Arthur Mas. This served a heavy blow for Marione Rajoy of Popular Party, the current national government prime minister who has had his hands full trying to prevent his country from exiting the eurozone.

The region of Catalonia has been divided by a political group vying for independence from the eurozone but it would be an extremely hard feat to achieve given they only control one region of Spain for which the won majority but not the all important 50% mark, they fell just short of that figure. However what it does suggest is that Spanish politics could be in for a bumpy read as general elections are nearing closer only 3 months away with the ruling party facing stiff competition from Mr Mas's party.

The news was received by the market with very little impact however I do feel that this does have the potential to evolve into a bigger crisis for not only the country but the entire Euro region. The economic stability within the eurozone has been mute for a while as policymakers try in vain to revive activity within the region that suffers from chronic deflation. But one really starts to wonder if the concept around the idea of having a united Europe may be crumbling before our eyes with those in charge being brutally bombarded with extremist opposition views.  

I think this may have been coming for some time, a possible merger between Telkom and Cell C, however we do not have facts yet what the state of play is at this point in time. The move would strategically boost Telkom's mobile telecommunicative business which has failed to capture many new subscribers in a very saturated market.

It must be noted that Telkom held a significant stake in Vodacom but subsequently unbundled it a few years back believing the company had reached full value, a call which has been called into question many times over as well as the management who was behind the decision.  Fixed line voice communication is a dying market, an area where Telkom is largely exposed too and in need of a richer stream of revenue to bear profits from.

The company has blossomed under the management of Sipho Maseko who has tackled problems facing the state owned enterprise with vigour in a mission to bring back costs to industry standards, something previous CEOs have failed at due to meddling from government.


It's often heard "This time is different"whenever there's a pullback in the market and I suppose there's a degree of validity to that phrase since every pullback doesn't contain the same news flow as the previous as story developed, some go away others stay a little longer to wreck havoc while others are forgotten.

But one things always been certain over the past 6 years of this magnificent bull run...there'd come a time where buying the dips would payoff handsomely and the next move upwards was the target for moves to come. We haven't seen that sentiment come through over the past few months as the market has suffered from a severe bout of volatility and heavy selloffs that make all the right moves for a bear market.

Carl Icahn, an investor activist and billionaire has come out guns blazing by calling the Fed out for keeping interest rates low for too long and failing to lift those rates 6 months prior. He isn't the first prominent financial figure to do so and certainly won't be the last but what we do know is that the market has been playing up since the Fed stopped their massive QE program late last year.

What becomes of the market in the future nobody knows, but its clear the precedent has been set and the market ready for a rumble the real question now is; Are you ready?    
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