Price worth watch­ing

Finweek English Edition - - News -

WITH THE JSE suf­fer­ing from the ad­vent of ir­ra­tional in­vestor sen­ti­ment it’s per­haps ap­pro­pri­ate to pon­der a value-laden un­listed in­vest­ment. Ven­Fin, which has a broad tech­nol­ogy-aligned in­vest­ment man­date, was last week bid markedly lower at 2000c/ shares on the over-the-counter mar­ket. At end-June Ven­Fin was trad­ing closer to the 2700c/share mark. The dip in its un­listed shares prob­a­bly stems mainly from the re­cent weak­ness in Di­men­sion Data (Di­data) shares.

Di­data is ad­mit­tedly Ven­Fin’s big­gest hold­ing – rep­re­sent­ing 30% (more than R2,3bn as at end-June) of the in­vest­ment port­fo­lio. But Ven­Fin cer­tainly isn’t a proxy for Di­data’s share price. Far from it…

Ven­Fin holds a sprawl­ing in­vest­ment port­fo­lio – which to some de­gree is hedged against mar­ket volatil­ity by a R1,6bn cash pile, com­pris­ing a chunk of hard cur­ren­cies. The group has a num­ber of fund and di­rect in­vest­ments in China, as well as ex­cit­ing lo­cal ini­tia­tives such as SEA­COM and Re­source En­ergy.

Ven­Fin’s lat­est an­nual re­port notes: “Our cost of cap­i­tal has in­creased ma­te­ri­ally in the volatile eco­nomic cli­mate. That has in­flu­enced our val­u­a­tion mod­els and risk ap­petite. Down­side risk has in­creased ap­pre­cia­bly and an in­vestor’s goal for at least the next 12 months should be to pre­serve cap­i­tal.”

While Ven­Fin may be adopt­ing a de­fen­sive po­si­tion for the mar­ket tur­bu­lence ex­pected over the next few months, there can be no doubt that the group will stum­ble across at­trac­tively priced op­por­tu­ni­ties in the en­su­ing global shake-out.

Notwith­stand­ing the mar­ket cor­rec­tion, at cur­rent lev­els Ven­Fin’s shares sub­stan­tially dis­count the last stated net as­set value (mar­ket prices and direc­tors’ val­u­a­tion as at end-June) of 3000c/share. With the rul­ing price be­low the end-June book value of 2300c/share Ven­Fin could be worth ac­cu­mu­lat­ing on weak­ness.

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