Market would love a direct route into Tyme
From “A Teachable Moment” by Tony Isola: A client asked what I thought about him pulling 10K out of his portfolio for some “fun money” to do some daily speculating.
When people ask this sort of stuff, they get an honest answer. Not what they want to hear.
“Go ahead; it’s your money, so you can do as you please. If you want my honest opinion, it’s a hard no. I’m not going to start a dental practice because I don’t know anything about root canals and such. It would be a danger to myself and those around me. You know just as much about day trading as I know about dentistry.”
Not liking throwing cold water on others’ fun, I presented an alternative.
“Why not take this money and go to Las Vegas when the pandemic ends? You would have more fun, maybe get comped a room, drinks, dinners, and entertainment. Your odds of success are at least the same, and I think you could at least enjoy yourself while losing money.”
After trading currencies professionally, I have some firsthand experience in this matter. Working for a Swiss and then Austrian Bank, I was in charge of trading the Japanese yen. We had no edge. The big exporters would come in and place trades with fellow Japanese banks. The Japanese banks always knew the market’s direction because of their customers. We didn’t and would regularly get smoked.
What edge do you have as an amateur day trader?
Are you going to hire drones to fly over the parking lots of Home Depot and other retailers and use this information to predict their earnings? How about paying millions to doctors to determine the latest potential blockbuster drugs’ efficacy? This is some of the stuff professionals employ in their arsenals.
The probability of losing money in this endeavour is off the charts. /
The announcement last week by African Rainbow Capital Investments (ARC) regarding its majority stake in Tyme Global (the holding company of TymeBank) — that it had raised new capital and would be extending its offering into the Philippines with a local partner — was almost an epiphany.
Investors now can begin to understand where this curious structure and ARC’s determination to own it are going, and it looks compelling.
Tyme Global’s local partner in the Philippines is the canny and proven Gokongwei family, which besides running a successful conglomerate also happens to possess one of the country’s largest retail footprints. That is ideal for securing space to park the bank’s kiosks.
It is a pity, though, that the only way investors can get access to this fintech-to-a-bank play is through an investment in the holding company, which has a portfolio comprising nonfinancial assets. Like almost all investment holding companies, ARC suffers from the dreaded “deep discount” that investors are applying to entities of this nature, with its market price trading significantly lower than its book value.
So it would be fantastic if ARC could consider providing a more direct route into Tyme as it begins to expand into markets very different from the ones investors can get exposure to through the JSE.
Besides the new Philippines leg, Tyme is headquartered in Singapore and has an operational hub in Vietnam, indicating there may be more Southeast Asian legs to the table.
INFRASTRUCTURE FUNDS
Construction companies are concerned about how the state will be able to fund its latest infrastructure drive.
Wolfgang Neff, the CEO of Wilson Bayly Holmes Ovcon (WBHO), said this week after the firm released its financial results for the six months to December that long-awaited, large-scale infrastructure projects were being rolled out again in SA after years of waiting. However, his big question was where the money would come from.
He said that under President Cyril Ramaphosa there had been a drive to spend on infrastructure and that state-owned enterprises (SOEs) had been releasing projects for tender.
“We are seeing a sudden rise in tender activity. The biggest question though is how SOEs and other bodies will pay for it while they tackle existing challenges around Eskom, SAA and so forth,” Neff said.
WBHO reported a steady order book of R36bn, which was largely unchanged from the one reported in June 2020, but showed orders from SA grew as much as 14% — the quickest rate compared with regions in the rest of Africa and Australia.
Its UK operations suffered a 23% drop. The hard lockdown imposed in the UK towards the end of 2020 scuppered WBHO’s project growth in the region.
Wikus Lategan, CEO of Calgro M3, an affordable housing and memorial parks developer, echoed Neff’s sentiments on Wednesday in an interview.
“We have mostly avoided government projects because of concerns around funding and timing. It’s taken three years for the SOEs to work out what projects they need and yes we will see new tenders now. But we couldn’t commit to projects while there were so many delays, which would add risk to our business,” he said.