Managing market expectations
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.