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Finweek English Edition - - COMPANIES & INVESTMENTS - David McKay

Re­mem­ber Gwede Man­tashe lam­bast­ing An­glo Amer­i­can for hav­ing “stolen our money”? This was t he comment Man­tashe made in an SAfm ra­dio in­ter­view ear­lier this year, adding: “They are a Bri­tish com­pany now,” an ex­pla­na­tion as to why An­glo Amer­i­can’s sub­sidiary, An­glo Amer­i­can Plat­inum (Am­plats), could pro­pose re­trench­ing 14 000 work­ers with­out any ap­par­ent show of sym­pa­thy.

As it turned out, Am­plats is to re­trench 3 000 em­ploy­ees, but there are also grounds for re­view­ing the comment that An­glo is “a Bri­tish com­pany”.

Since the end of 2009, a decade af­ter An­glo ‘mi­grated’ to the UK in a list­ing aimed at low­er­ing its cost of cap­i­tal, South African share­hold­ers in An­glo Amer­i­can have been steadily ris­ing.

At the cur­rent rate of growth in the SA share­holder base, An­glo now stands at more than 50% lo­cally-owned from about 35% at its low in mid-2009. It’s a shift that could be con­strued as a home­com­ing.

And it’s not the only com­pany where SA share­hold­ers have been pil­ing in.

As shown in the graph be­low, the UK­head­quar­tered plat­inum pro­ducer, Lon­min, is now nearly 50% owned by SA share­hold­ers, from less than 5% of the to­tal share­holder base in 2009.

In the case of Aquarius Plat­inum, one of the first to adopt the dual-list­ing share struc­ture on of­fer from the JSE, it has seen lo­cal in­vestors scoop up 30% of the share reg­is­ter from the end of 2011.

The shift in share­hold­ings comes as in­ter­na­tional in­vestors quit SA amid in­dus­trial and so­cial strife, poor min­ing economics, and to a lesser or greater ex­tent – c om­pany de­pend i ng – u nder­per­for­mance. South Africans, mean­while, un­der­stand (or are less risk averse) to what’s been go­ing on at the lo­cal op­er­a­tions.

Cap­i­tal­is­ing on geo-po­lit­i­cal risk, may also make for some good in­vest­ing, es­pe­cially if you be­lieve the min­ing mar­kets are not fun­da­men­tally harmed, just cor­rect­ing.

From Fe­bru­ary 2011, the time when the num­ber of SA share­hold­ers in Lon­min started to in­crease dra­mat­i­cally, the share lost over two-thirds of its value from R102/ share to R31/share. It has since re­cov­ered to R53.80/share so per­haps some lo­cal in­vestors bought as Lon­min bot­tomed out.

The same might be said for Aquarius Plat­inum, which lost R18/share from De­cem­ber 2011 to June 2011, roughly over the same time that the SA share­holder base started to rise. It is now trad­ing at R8.18/ share. Per­haps there are ben­e­fits from lo­cal do­main knowl­edge.

The will­ing­ness of South Africans to in­vest in their own stocks was grasped as an in­ter­est­ing mar­ket­ing op­por­tu­nity by Glen­coreXs­trata, which is ex­pected to take a sec­ondary list­ing on the JSE in

SA share­hold­ing the last quar­ter of this year. Are there other com­pa­nies with op­er­a­tions within SA, but not listed here, seek­ing to mine the cap­tive SA au­di­ence, which doesn’t have the geopo­lit­i­cal col­ly­wob­bles of its in­ter­na­tional brethren? IvanPlats, a Toronto-listed plat­inum de­vel­op­ment firm is one.

Adrian Sav­ille, of Can­non As­set Man­age­ment, says the ob­ser­va­tion is in­ter­est­ing, but won­ders if for­eign share­hold­ers of min­ers op­er­at­ing in SA are just “cap­tur­ing col­lec­tive for­eign sen­ti­ment”.

One of the com­pa­nies not con­sid­er­ing a home­com­ing is Pe­tra Di­a­monds. Al­most all of the di­a­mond firm’s op­er­a­tions are in SA, hav­ing bought them from De Beers, but the com­pany has largely stuck to a UK list­ing.

Jo­han Dip­pe­naar, CEO of Pe­tra Di­a­monds says: “We had a dual list­ing in Aus­tralia, but it was hard work, es­pe­cially with the time shifts. We wouldn’t have that prob­lem in SA, but we have a very strong share­holder base in the UK.

“It’s [an SA list­ing] not some­thing we’re con­sid­er­ing at the mo­ment.”

Mean­while, some com­pa­nies have cho­sen to quit for­eign climes al­to­gether, such as Pet­min, which is end­ing its Lon­don list­ing, while Sappi is delist­ing its ADRs from the New York Stock Ex­change, giv­ing low trad­ing vol­umes there.

Jo­han Dip­pe­naar

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