To market to market to buy a fat pig. The Dow broke through 23 000 points yesterday. Even though it is just a number, which has no real difference from 22 999 or 23 001, it is nice to have milestones. Having markers allows us to see where we have come from and the progress made; celebrate the small victories. I'm sure that market watchers get a shot of dopamine when we break through key levels, just like we get that high from likes on social media.
What is amazing to me is that in August 1987, the Dow crossed 2 000 points for the first time. If we keep at the same run-rate, the index should be above 230 000 in the next 30-years. The human mind struggles to compute the power of compounding. The question is, do you have the patience and the staying power to go along for the ride?
In November last year, the Dow broke through 19 000 for the first time. Since then it broke through 20 000 in January, 21 000 in March, 22 000 in August and now 23 000 in October. More interesting is that on its trip from 22 000 to 23 000, it was only down on six occasions. For more interesting facts about the market, follow Robert Hum on Twitter. Here is what he had to say about yesterday's close.
Market Scorecard. US markets continue to power ahead, our market unfortunately wasn't able to do the same. The Dow was up 0.18%, the S&P 500 was up 0.07%, the Nasdaq was down 0.01% and the All-share was down 0.48%. Our market was slightly in the red following the cabinet re-shuffle but from there onwards it just steadily drifted lower. We also saw weakness in the Rand immediately after the announcement but after a couple of hours, our currency was back at its previous trading levels.
Company corner
Bright's Banter
Private hospital provider Mediclinic International released their interim trading and operational update yesterday. This is the first trading update after the Thiqa regulations in Abu Dhabi on co-payments by citizens had been repealed by the King.
The group now has 75 hospitals and 29 clinics across its operations in Mzansi through the Mediclinic brand, Abu Dhabi and Dubai in the United Arab Emirates through the Al Noor/Mediclinic Middle East brand, and Switzerland through the Hirslanden brand. Mediclinic also has a 29.9% stake in Spire Healthcare Group in the United Kingdom.
Mediclinic said that on the group level, revenues were flat in constant currencies but up 9.5% in pounds to GBP1.4billion compared to £1.3bn in the prior year. Earnings before accounting items were up 5% to GBP231million compared to GBP 220million in the prior year. Earnings per share are expected to be 10% lower at around GBP0.115 compared to GBP0.128 in the prior year. As you can see, these aren't exactly blockbuster numbers. Shareholders pushed the share price down 3.2% yesterday extending the weekly losses to 7%.
Switzerland operations are still the powerhouse with 48% contribution to revenues with Mzansi operations coming second at 28% and Mediclinic Middle East contributing the remaining 24%.
The company reported that the Swiss operations were hit by the timing of the easter holidays and a subdued market during summer months. As a result revenues per bed day were flat. The Mzansi operations saw revenues increase by 4.1% to R7.6billion with a 7.7% increase in revenue per bed day in what management describes as a weak macro-economic environment that we are facing here at home.
The Middle East revenues were down by 4.7% and after once-off items they were pretty flat, but what caught my attention here was the huge improvement in Thiqa patient activity after the repeal of the co-payment requirement in Abu Dhabi. The quality of revenues should improve and the Dubai operations continue to do well.
Spire's earning were hit by Ian Peterson a surgeon nicknamed "the butcher" who apparently was jailed for performing unnecessary surgical procedures on patients. Spire made a provision of GBP27.6million before taking into account any potential recoveries from insurers, a potential cost of settlement relating to a civil litigation said the company.
It has been a very tough couple of years for Mediclinic and thats reflected on the share price which is down 27% over a one year period. We think the best times lie ahead for this business and long-term investors will be rewarded for their patience here, excuse the pun.
Michael's Musings
The graph below shows the power of a brand and nostalgia. Disney's huge lead is due to its appeal to multiple generations, from Frozen for the young to Star Wars for older folk - Licensed Merchandise Is a Billion-Dollar Business. As the article points out, Netflix is quickly building many hit shows and brands that will be used for merchandising further down the road.
You will find more statistics at Statista
It was only a matter of time until Uber became the king of New York city. July was the first time that more rides were done with Uber than with a yellow cab - New York City yellow cabs have taken a back seat to Uber. As a tourist to New York I found using Uber much easier, I didn't have to navigate the minefield of hailing a cab on a busy street and there was no pressure around, "How much should I tip the driver?". I even asked a New Yorker what the tipping guideline was, he just said "tip what you feel is fair"; which didn't help much.
Home again, home again, jiggety-jog. Our market is flat this morning, inline with most of the Asian markets. South Africa's CPI for September has just come in at 5.1%, higher than the 4.9% expected, edging back to the top of the SARB's range. The MPC next meet at the end of November, so there is time for one more CPI read before then, but as it stands I wouldn't be expecting a rate cut just in time for your December holiday.
Sent to you by Team Vestact.
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