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Market Overview, Week Ahead Fucuses on US Politics

By Vestact Market OverviewFeb 11, 2019 11:40
za.investing.com/analysis/market-overview-week-ahead-fucuses-on-us-politics-200198158
Market Overview, Week Ahead Fucuses on US Politics
By Vestact   |  Feb 11, 2019 11:40
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After a week of being closed, mainland China's stock exchanges are open today and are up over 1%. The positivity in mainland China spilt over to Hong Kong, where Tencent is currently up 1.3%. The push higher from Tencent means that it broke through the HKD 350 a share for the first time since August 2018. The stock still has some way to go until it reaches the HKD 470 share highs reached in January 2018, but considering it was around HKD 260 in October, we can't complain about its current levels.

On Friday the JSE All-share closed down 1.24%, the S&P 500 closed up 0.07%, and the Nasdaq closed up 0.14%.

One thing, from Paul

I am very excited about the forthcoming listing or initial public offering (IPO) of Uber. No date has been set, but rumours are that it will be in 2019 sometime. Uber was valued at around $76 billion when it last raised money in August 2018.

Everyone knows the business model of the ride-hailing giant, but it also has some other parts to its business. Did you know how big Uber Eats has become? According to projections from CEO Dara Khosrowshahi, Uber Eats is on track to deliver some $10 billion worth of food worldwide this year, up from an estimated $6 billion-plus last year.

Uber takes a 30% cut and a delivery fee, then pays drivers, suggesting that Uber Eats could generate at least $1 billion in revenue this year, or an estimated 7% to 10% of the total. That means Uber Eats is already among the planet's largest food-delivery services and ranks second in the US behind rival Grubhub (likely $1 billion in 2018 revenue).

Michael's Musings

With all the legal issues that MTN (JO:MTNJ) has been through over the last two years, we sometimes forget the scope of their operations. The MTN group has exposure to a number of tech businesses, for example, they own a stake in Irans equivalent to Uber.

Another of their investments, this time from Nigeria, is looking to IPO in New York which could raise as much as $600 million for MTN - MTN said to prepare share sale of African unicorn Jumia. At current exchange rates that is just over R8 billion which works out to 5% of the MTN market cap, so not insignificant.

Many of you probably haven't heard of Jumia before but have you heard of Zando? The South African subsidiary is the online store Zando; I wonder if MTN employees get staff discounts?

Signing off

The week ahead will be focused on US politics, sigh. Congress has until Friday to pass new legislation to keep the government open and funded. Over the weekend news surfaced that Democrats and Republicans stopped talking to each other, so who knows what will happen over the next few days. Then high-level trade talks will take place again this week between China and the US; there are only three weeks until the 1 March deadline. The only significant piece of data out today is a UK GDP figure. Economists are expecting growth of 1.4%. The JSE All-share is higher this morning.

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Market Overview, Week Ahead Fucuses on US Politics
 
Market Overview, Week Ahead Fucuses on US Politics

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