Manag­ing mar­ket ex­pec­ta­tions

Financial Mail - - CROSSWORD 2031 -

ANY­ONE ELSE FEEL­ING RE­ALLY

de­spon­dent about the mar­ket? I cer­tainly am get­ting there. A few weeks ago, when I was feel­ing rel­a­tively chip­per, I at­tended the AGM of con­struc­tion ma­te­ri­als spe­cial­ist Ma­zor. CEO Ron­nie Ma­zor was dis­arm­ingly down­beat around prospects for the broader build­ing and con­struc­tion sec­tor — even re­sort­ing to some colour­ful lan­guage to ham­mer home the point.

Not­ing a pen­chant for buy­ing back shares, I thought Ma­zor might be try­ing to talk down his share price. But watch­ing sev­eral con­struc­tion com­pa­nies slide into busi­ness res­cue, and oth­ers — in­clud­ing for­mer heavy­weight Aveng — look­ing as brit­tle as a stale rusk, I think (in ret­ro­spect) Ma­zor’s dire as­sess­ment was spot on.

Even the share price of peren­ni­ally prof­itable build­ing sup­plies spe­cial­ist Afrimat — with its track record of val­ueadding ac­qui­si­tions — has come off markedly in the past few weeks.

With “well-priced” op­por­tu­ni­ties to fur­ther con­sol­i­date the broader build­ing sup­plies sec­tor, you would think pun­ters might ac­tu­ally be back­ing Afrimat.

In past months I have be­moaned how promis­ing small- to medium-cap com­pa­nies are slapped with desul­tory rat­ings. Aside from lo­gis­tics spe­cial­ist San­tova fi­nally find­ing de­served trac­tion, mar­ket sen­ti­ment for the rest of my watch-list looks as in­sipid as ever.

Per­haps it’s bet­ter to wait on the side­lines un­til the pre­vail­ing so­ciopo­lit­i­cal sit­u­a­tion set­tles back to a level of an­i­mos­ity.

There is some scary rhetoric and blus­ter be­ing hurled around ir­re­spon­si­bly on so­cial me­dia — es­pe­cially re­gard­ing “EWC” (ex­pro­pri­a­tion with­out com­pen­sa­tion).

I noted re­cently that on a sin­gle day four large coun­ters with roots in the agri­cul­tural sec­tor were all trad­ing at 12-month lows. These were Zeder In­vest­ments, Pioneer Foods, Crookes Broth­ers and Dis­tell.

Dis­tell, in fact, had ex­pe­ri­enced a de­cent lit­tle run in its shares af­ter a re­cent relist­ing on the JSE, with for­eign in­vestors seem­ing to lap up scrip. Have those off­shore buy­ers been spooked, I won­der?

A HUGE LOSS

more ac­cept­able This mag­a­zine won’t be the same with­out the deft con­tri­bu­tions of veteran fi­nan­cial jour­nal­ist Stafford Thomas, who passed away sud­denly ear­lier this month.

We could al­ways rely on Stafford for valu­able in­put and thought-pro­vok­ing copy. He was unflappable un­der pres­sure and never shirked from the some­times vo­lu­mi­nous tasks at IM.

Stafford will be greatly missed by his col­leagues and read­ers alike. His fi­nal con­tri­bu­tions to IM are pub­lished posthu­mously in this is­sue.

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