IN­VEST­MENT SHORTS

Financial Mail - Investors Monthly - - Contents - In­vest­ment Briefs edited by Rob Rose Pic­ture: WALDO SWIEGERS/BLOOMBERG

Given how well his in­vest­ments have done in the past year, it’s no sur­prise that when Pep­kor and Shoprite chair­man Christo Wiese lets slip any wis­dom about the mar­kets, in­vestors’ ears tend to prick up.

So it was at Shoprite’s AGM when, dis­cussing the dire sit­u­a­tion in SA, Wiese said the coun­try’s mood tends to lift when three things hap­pen.

First, the gold price must go up (which it has re­cently); sec­ond, it must rain across the coun­try (which it hasn’t); and third, SA must do well in the rugby (and the ver­dict seems un­clear on this, given the volatile World Cup cam­paign in the UK).

“It’s just a tough patch, we have to fight our way through it,” he says.

In fact, things are sur­pris­ingly tougher than any­one knew. True, com­pa­nies have been talk­ing about the “weak con­sumer” for months, but quite how weak wasn’t en­tirely clear. Then the an­swer moved into sharp re­lief in mid-Oc­to­ber when Shoprite re­leased a trad­ing up­date which showed that growth in its South African su­per­mar­ket busi­ness had slowed to 4,9% — marginally above in­fla­tion.

This sparked some­thing of a blood­let­ting in Shoprite’s stock, as it tum­bled 8% in two days, from nearly R160/share to around R147/share. This is not the kind of thing that CEO Whitey Bas­son is used to, hav­ing been un­of­fi­cially anointed as the golden boy of South African re­tail years back.

But the up­side is that that fall made Shoprite’s stock, hith­erto quite pricey, far more rea­son­able. At its low, Shoprite was trad­ing on a price-to-earn­ings ra­tio of less than 20 — which seemed a bar­gain.

Es­pe­cially if it starts to rain.

Survé’s syg­nia of the times African Eq­uity Em­pow­er­ment In­vest­ments (AEEI) — the old Sekun­jalo In­vest­ments, ul­ti­mately con­trolled by the flam­boy­ant Iqbal Survé — should make more in­vest­ments in listed com­pa­nies, it seems.

For the most part AEEI’s value re­sides in un­listed Pre­mier Fish­ing, its tech­nol­ogy hub and its rather opaque BEE in­vest­ment in Bri­tish Tele­coms SA.

Lately, though, AEEI has scored big from its par­tic­i­pa­tion in the em­pow­er­ment scheme for listed con­sumer brands con­glom­er­ate Pioneer Foods, and now ap­pears to have made an­other im­pres­sive re­turn on newly listed as­set man­ager Syg­nia (see our cover story).

AEEI has con­firmed se­cur­ing 3,8% of Syg­nia in its over­sub­scribed pri­vate place­ment at the sub­scrip­tion price of 840c/share.

With Syg­nia’s share trekking north of R14 at the time of writ­ing, this is a nice boost to AEEI as it kicks off its new financial year. For its last year to Au­gust, AEEI said earn­ings will be up as much as 40%.

There is, of course, an ironic twist to this Syg­nia in­vest­ment. In­de­pen­dent News­pa­pers, which is also owned by Sekun­jalo af­ter a con­tro­ver­sial buy­out a few years back, messed up at the be­gin­ning of Oc­to­ber by re­port­ing that Syg­nia was a sub­sidiary of Sekun­jalo in its

Busi­ness Re­port sup­ple­ment. This mis­take can’t have pleased Syg­nia CEO Magda Wierzy­cka, be­cause a lengthy apol­ogy ap­peared the next day, re­it­er­at­ing that Syg­nia has “no as­so­ci­a­tion or af­fil­i­a­tion with Sekun­jalo or AEEI”.

Now AEEI has made a pretty penny on this in­vest­ment. Who knows, maybe this rash of suc­cess­ful list­ings will even prompt AEEI to has­ten its ef­forts to bring Pre­mier Fish­ing and its tech hub to the JSE.

Yeoville be­comes No-ville Real es­tate in­vestors have prob­a­bly no­ticed that the small Cape Town-based prop­erty counter Fair­vest is mak­ing some rather eye­brow rais­ing moves into the re­tail space.

For one thing, it has al­ready made a very promis­ing stab at re­vamp­ing Nyanga Junc­tion out­side Cape Town. But it was a rather bold plan to pay R56m for a con­glom­er­a­tion of re­tail prop­er­ties in the di­lap­i­dated sub­urb of Yeoville, on Joburg’s east­ern flank, that re­ally set the risk bell ring­ing.

In­vestors, how­ever, will surely be breath­ing a sigh of re­lief af­ter Fair­vest’s bosses then re­vealed that the Yeoville ac­qui­si­tion

Pic­ture: FINANCIAL MAIL

Iqbal Survé

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