CORONATION

Share price: R40.86 JSE code: CML

CORONATION IS THE LARGEST

domestic asset manager with funds of R508bn under management. Founded in 1983 in Cape Town under the auspices of the old Coronation Holdings, it has through strong longer-term performance and exceptional retail marketing grown into a local juggernaut. Its market value is

R14.3bn.

Coronation has a small international footprint and that somewhat insulates the counter to the expected ravages of the domestic marketplace. Due to Covid-19 it is expected that the domestic institutional retirement fund sector will see higher fund withdrawals. Coronation, as one of the largest sector players, is likely to suffer market-share and AUM attrition, which could impact performance and AUM fees.

Recent interim results saw a modest 8% rise in earnings to 178.3c a share with a generous 178c a share dividend paid. This places the counter on a dividend yield of 8.7%. The dividend yield is a key supporting factor. Coronation has a tight cost base, enviable investment performance and a retail footprint that should allow the company to withstand any material asset withdrawals as long as fund performance is maintained.

Coronation year to date has returned 2% — but due to its scale and strong dividend yield IM rates the counter a keenly watched HOLD.