Not on a trade hold

Chair­man Wiese spends wal­lop­ing R30m buy­ing share on open mar­ket

Finweek English Edition - - COMPANIES & MARKETS - MARC HASENFUSS

IT WOULDN’T be an un­rea­son­able ex­pec­ta­tion for Trade­hold to mo­bilise its freshly raised R650m for some in­spired deal-mak­ing af­ter chair­man and prime mover Christo Wiese snapped up nearly R30m worth of shares on the open mar­ket. Only a few months ago the re­tail ty­coon – as main share­holder and un­der­writer – poured in sev­eral hun­dred mil­lion rand into Trade­hold’s rights is­sues. What’s an­other dol­lop of cash to one of SA’s wealth­i­est busi­ness­men?

But why Trade­hold? Un­like Brait SA – where Wiese is also en­sconced – Trade­hold can’t be re­garded as the most ex­cit­ing share on the JSE. Apart from its cash pile and a few shares in Swiss bank UBS, Trade­hold holds two in­vest­ments: 85% of Bri­tish­based prop­erty spe­cial­ist Moor­garth and a 15,9% stake in un­listed re­tailer In­store (the value of which can’t eas­ily be quan­ti­fied). With a mar­ket cap­i­tal­i­sa­tion of just R850m, we’re not ex­actly talk­ing Cap­i­tal Shop­ping Cen­tres, Cap­i­tal & Coun­ties… or even Re­de­fine In­ter­na­tional.

But Trade­hold could get a tad more ex­cit­ing as it scours the mori­bund Bri­tish prop­erty mar­ket for bar­gain base­ment priced deals (al­beit that process might not un­fold ter­ri­bly quickly).

Of course, there are still some ex­citable pun­ters spec­u­lat­ing hope­fully that Trade­hold may well have a broader scope (think Wiese’s ar­ray of per­sonal in­vest­ments on the JSE). But per­haps we shouldn’t get too car­ried away. Al­though he’s prob­a­bly SA’s best loved se­rial risk-taker, Wiese may sim­ply have latched on to some de­cent value in Trade­hold in the pre­vail­ing mar­ket weak­ness.

Just be­fore Wiese’s R30m spree, the Trade­hold share – re­cently sub­ject of a 10-to-one con­sol­i­da­tion – plunged down to 450c in small vol­ume trade. The some­times dra­matic ef­fects of share con­sol­i­da­tions on share prices are well known and such freak or panic trades can re­ally see mar­ket value ham­mered. Luck­ily for the deep-pock­eted Wiese, a big share­holder – or share­hold­ers – ap­peared to have been spooked. Pay­ing an av­er­age 600c/share, Wiese bought shares that not only carry an in­trin­sic net as­set value of around 680c/share but may well also ben­e­fit from some well-timed cor­po­rate ma­noeu­vres.


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