Financial Mail - Investors Monthly
EDITOR’S NOTE
Stockbroker Special for boffins and beginners
THE STOCKBROKER SPECIAL gets more intriguing as it becomes increasingly clear how competitive this segment of the market has become over the past few years.
Competition, of course, is good — resulting in better services at better prices to us ordinary investors dabbling in and around the JSE (and other bourses, might I add).
Goodness knows, I certainly needed my costs to be as low as possible as I switched my portfolio frantically around in this dastardly investment climate. I may have bought and sold British American Tobacco (BAT) more times than I cheated on my Banting diet (and I did a lot of cheating).
On a serious note, I would like to once again express my gratitude to the Intellidex team on compiling an authoritative and extremely useful survey. There is a stack of valuable information in this edition, and I really believe it will help the endeavours of budding and experienced investors alike.
This has been an interesting month for investors, with two large unbundling exercises and separate listings proposed by JSE stalwart counters Naspers and Investec.
There has been a spate of unbundlings — Sea Harvest (out of Brimstone), Premier Fishing & Brands and Ayo Technology Solutions (both AEEI), Novus (Naspers) and Hosken Passenger Logistics & Rail (HCI).
Unbundlings — over many years — have given investors plenty food for thought. It is probably a generalisation, but it seems most unbundlings are met either with initial cynicism or a lack of interest.
MiX Telematics (spun out of Control Instruments), Montauk (HCI) and Astral Foods are a few of the more successful exercises, which were all initially met with a lukewarm market response.
My gut feel is that Investec’s proposed (and long-awaited) unbundling of wealth management hub Investec Asset Management (IAM) is likely to garner more enthusiasm than Naspers’s proposed unbundling of MultiChoice (which was previously listed on the JSE in a slightly different guise).
Reading between the lines, the Investec brainstrust is genuinely heart sore to see a solid subsidiary leaving the group. IAP — like Coronation Asset Management — needs to stand on its own to compete with the large asset managers.
Naspers, on the other hand, is shooing off a business that perhaps has less relevance in the “new” economy than the rest of its online consumer services aligned portfolio. Some punters have compared the mature MultiChoice to BAT — compelling cash flows with modest growth prospects. But MultiChoice’s brands are less habit forming in a fast changing environment and there is less pricing power.
I certainly would not buy Naspers to get an allocation of MultiChoice shares, but I might watch Investec for a chance to snaffle some IAM.