Just can’t get go­ing

Finweek English Edition - - INVESTMENT -

WE HAVE PUT a sell on this stock be­fore and al­most im­me­di­ately af­ter­wards Cash­build launched its Amer­i­can De­posi­tary Re­ceipt pro­gramme (ADR), which en­ables trad­ing of its shares in the US. This saw the stock rally but has given back most of that post-ADR ex­cite­ment gain.

The re­cent trad­ing up­date was bleak and things will only get bleaker from here on. The con­sumer re­mains un­der pres­sure and in­ter­est rate in­creases will hurt, al­beit at the lower end few have tra­di­tional debt and are al­ready pay­ing at the higher usury rate. How­ever, trans­port costs are ris­ing (the weaker rand be­ing the driver here), in­fla­tion is edg­ing higher and the net re­sult is a con­sumer with less and less dis­pos­able in­come. Added to this is in­creased com­pe­ti­tion in the space for home builders, and things look very tough for Cash­build.

The only pos­si­ble glim­mer of light would be a se­ri­ous in­crease in so­cial grants in the Bud­get later this month and while an elec­tion year makes this pos­si­ble, Trea­sury sim­ply doesn’t have the money.

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