Market Wrap - Stock pick — Afrimat and SA bonds
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Independent Analyst Chris Gilmour chose Afrimat as his stock pick of the day and David Shapiro from Sasfin Securities chose SA bonds.
Gilmour said: "I actually do have a stock pick after weeks of sitting on my hands and saying one should sit on cash, I'm going for Afrimat. I think the stock is terribly underrated, obviously an awful lot depends on the iron ore price, and iron ore is playing the game. But you haven't seen it as yet in the figure for Afrimat particularly when it comes to the fall in the value of the rand. As long as iron ore stays at, or around these levels, the current price is well over a $100 and the demand is there from China particularly, it's a great little operation and I think it will come through nicely."
Shapiro said: "It depends on your tax position but if you can go into some of SA's long end bonds, meaning ten years plus and get 10%-11% yield in an environment where inflation is coming down, in an environment where in the rest of the world yields are zero or at best you can get 1/2% on a ten-year bond in America, or 1/4% in the UK, SA bonds look very attractive. As long as you rand based and living off rands, SA bonds look very attractive for savings."
Gilmour said: "I actually do have a stock pick after weeks of sitting on my hands and saying one should sit on cash, I'm going for Afrimat. I think the stock is terribly underrated, obviously an awful lot depends on the iron ore price, and iron ore is playing the game. But you haven't seen it as yet in the figure for Afrimat particularly when it comes to the fall in the value of the rand. As long as iron ore stays at, or around these levels, the current price is well over a $100 and the demand is there from China particularly, it's a great little operation and I think it will come through nicely."
Shapiro said: "It depends on your tax position but if you can go into some of SA's long end bonds, meaning ten years plus and get 10%-11% yield in an environment where inflation is coming down, in an environment where in the rest of the world yields are zero or at best you can get 1/2% on a ten-year bond in America, or 1/4% in the UK, SA bonds look very attractive. As long as you rand based and living off rands, SA bonds look very attractive for savings."
