NOT THE FOGGIEST
Recently Sappi delisted its American depositary receipts (ADRs) from the New York Stock Exchange and it now just trades over the counter in the US. ADRs are a way for South African companies to give their shares exposure to the US market without a formal listing. Now we have Cashbuild and Growthpoint both issuing ADRs (and in both cases over the counter rather than on the NYSE). For Growthpoint it does make sense as it enables US investors to get into South Africa’s largest property company and, as it recently converted to a REIT, it has even more attraction. Why Cashbuild is going the ADR route I can’t fathom, are US investors keen for exposure to our struggling local building materials market? Surely not.
Sappi lator (NCR) case. Initially proposed at a couple hundred million, the settlement came in at very modest R20m and the stock responded positively, albeit most of the positive response was on the day before the official announcement! The two remaining issues needing clarity from African Bank are the price of the rights issue and the disposal of Ellerines. These two don’t solve the bank’s bigger problems, but it will remove the uncertainty around these issues from the market, which can then focus on their profits and the quality of the profits.
African Bank Investments