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It feels like just yesterday that I was doing the wrap for 2024, the first year of Supernatural Stocks on Moneyweb. The second year is already behind us now, with so much exciting stuff happening in the market this year.<\/p>\n
I\u2019ll certainly remember 2025 for being that rarest of things: a South African bull market! Long may it continue.<\/p>\n
Just like last year, the team gave me the list of the top podcasts for the year. I\u2019m not surprised at all that we kick off with Sasol, which remains the most talked about and popular stock for retail investors in South Africa.<\/p>\n
Five miracles and a dream<\/strong><\/p>\n When I covered Sasol in May, it was in the aftermath of the Capital Markets Day. The share price had reacted positively to management\u2019s strategy, reversing most of the losses experienced in the first few months of the year.<\/p>\n The theme of the strategy went roughly like this: the chemicals business was the major source of upside, with the idea being that the oil business \u2013 the fuels \u2013 would need to do the best it could in an environment of stubbornly low Brent crude prices.<\/p>\n Listen\/read: Brent crude has plummeted 22% this year in dollars. One of the risks I raised in the podcast is that I\u2019m bearish on oil prices, with my expectation being that they go sideways. I didn\u2019t expect them to drop like this though!<\/p>\n At the time of the Capital Markets Day, Sasol noted a goal to get to a breakeven price per barrel of $50, but they are currently running above that level. Brent crude is now trading below $60. That\u2019s not exactly a lot of fat, now is it?<\/p>\n You would therefore expect Sasol to be doing extremely badly this year.<\/p>\n Instead, the share price is up nearly 17% year to date!<\/p>\n<\/blockquote>\n It\u2019s been a rollercoaster ride though, with volatility as a feature rather than a bug when it comes to Sasol.<\/p>\n The upswing has been driven by better coal quality and production at the Secunda Operations, along with improved recent sales volumes in fuels. They\u2019ve also seen a significant uptick in revenue and earnings before interest, taxation, depreciation and amortisation [Ebitda] in the International Chemicals business.<\/p>\n Chemicals Africa has been a less positive story.<\/p>\n And of course, one of the key drivers of the share price has been improved sentiment towards South Africa and a hope that our infrastructure is on the mend.<\/p>\n In that podcast, I set out the five miracles that Sasol needed to reach their dream.<\/p>\n<\/blockquote>\n The first was for the oil price to remain where it was, which hasn\u2019t happened. The second miracle was for improvement in South African infrastructure, something that we are starting to see at least. The third miracle was for Ebitda to triple in the chemicals business \u2013 let\u2019s wait and see exactly what a \u201csignificant\u201d improvement means.<\/p>\n The fourth was to avoid a global recession that takes oil close to $50\/barrel \u2013 sadly that seems to be happening even without a recession. And the fifth was for the world to avoid global stagflation where there\u2019s low growth and stubbornly high interest rates \u2013 the good news is that rates have been coming down.<\/p>\n Read: Sasol punters were rewarded this year depending on when they bought in, but for me the juice isn\u2019t worth the squeeze here. There\u2019s a lot of volatility here to get a return that was way below so many other options on the JSE.<\/p>\n ADVERTISEMENT<\/p>\n CONTINUE READING BELOW<\/p>\n<\/div>\n<\/div>\n
Sasol: Five miracles and a dream
Has Sasol\u2019s long recovery finally taken hold?<\/p>\n\n
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Sasol CEO sees chemical business potentially listing by 2028
Why is Sasol at such a deep discount to fair value?
Sasol sees solid start to FY26 despite macro headwinds<\/p>\n