Ship­ping out

Grindrod chair­man nearly wipes out stake in com­pany and col­leagues also of­fload­ing

Finweek English Edition - - Companies & Markets - SIKONATHI MANTSHANTSHA sikonathim@fin­

AF­TER A BUY­ING SPREE through­out last year, direc­tors at ship­ping com­pany Grindrod seem to have com­pletely re­versed the po­si­tions they took in their com­pany’s shares. This week chair­man Ivan Clark, CE Alan Olivier and fi­nan­cial di­rec­tor Tony Ste­wart re­leased a to­tal of 2,2m shares at R36m (av­er­age 1598c/share) into the mar­ket. Clark ac­counted for 1,5m of those, while Olivier sold 500 000.

In April this year Clark off­loaded 2,5m shares for R31m (1252c/share), while Olivier pock­eted R7,2m af­ter sell­ing 500 000 Grindrod shares a few weeks later. Then Ste­wart shipped R4m to the bank af­ter of­fload­ing 280 000 shares.

“There’s no spe­cific rea­son for my sell­ing Grindrod shares other than bal­anc­ing my per­sonal port­fo­lio,” says Olivier. With more than 2m shares, he says he was over­weight on Grindrod shares. Olivier couldn’t speak on be­half of his non-ex­ec­u­tive chair­man, who couldn’t be con­tacted for com­ment.

Read­ers will re­mem­ber that in De­cem­ber Clark pock­eted R121m af­ter sell­ing 8m shares. That was to set­tle an un­spec­i­fied debt obli­ga­tion that had arisen two years pre­vi­ously. Grindrod’s an­nual re­port to De­cem­ber 2008 showed Clark held 12,3m shares, down from 13,9m in 2007. This year he’s off­loaded 4m shares, a quar­ter of his hold­ing.

Com­pany sec­re­tary Craig Robert­son con­firms Clark still owns 8,3m shares in the ship­ping com­pany he joined in 1977 and as a di­rec­tor since 1993. Olivier has now sold al­most half his 2,3m shares he held in De­cem­ber.

Else­where, now that in­dus­trial com­pany KAP In­ter­na­tional’s chair­man Claas Daun has be­gun buy­ing back the com­pany’s shares, in­vestors can won­der if this is an­other co­in­ci­dence at the bot­tom of the mar­ket cy­cle.

That’s be­cause when Daun be­gan sell­ing down his stake in the com­pany in 2006 – os­ten­si­bly “to im­prove liq­uid­ity” – it was only a mat­ter of time be­fore the share em­barked on a sus­tained down­ward spi­ral over the fol­low­ing two years. Those sales of around 24m shares were timed to co­in­cide with the top of the mar­ket, at around 500c/ share. They were pre­ceded by sim­i­larly timed

dis­pos­als dur­ing 2003, at around the 400c level. Those were again nec­es­sary “to com­ply with the JSE’s spread re­quire­ments”. It seems it was just an­other co­in­ci­dence they were sold at the top of the mar­ket be­fore a down­turn to mid-2005.

Last week Daun bought 4m shares for R5,2m at the 130c level. That fol­lowed buy­ing nearly 11m shares be­tween March and May last year at around 200c/share. His new buy pushes Daun’s stake in KAP In­ter­na­tional, the firm he founded in 1993, closer to 46%. Daun is based in Ger­many and couldn’t be in­ter­viewed for this re­port.

How­ever, what seems clear to any­one fol­low­ing his share trad­ing is that Daun seems to know when to sell KAP. What­ever the rea­son that “forces” him to sell, it al­ways “co­in­cides” with the top of the mar­ket.

The other direc­tors at KAP seem to of­ten be on the wrong side of the mar­ket. CE Paul Schouten sold 1,2m shares at 130c apiece in March last year, and re­peated that two months later. Then 1,6m shares were sold for 220c in May. That was ex­actly the time Daun was buy­ing at those lev­els.

Daun’s col­league John Have­man also found him­self buy­ing 100 000 KAP shares at the 390c level in May 2006, a few months be­fore Daun sold to “im­prove liq­uid­ity”. It seems KAP’s ex­ec­u­tives would do well to in­vest in “co­in­ci­dence” lessons from their non-ex­ec­u­tive chair­man.

In a Claas of his own. Claas Daun

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