Our small-cap picks are:

Brait: With plans afoot to separately list underappreciated consumer brands business Premier

Group, the value unlocking will begin in earnest. One hopes the listing of Premier — which really does look like a superb business — coincides with fitness chain

Virgin Active stretching its profit stride closer to pre2019 levels.

Grindrod: We’re retaining Grindrod — not only because the value-unlocking effort has been pushed

out, but there are interesting rumblings coming down the track.

Net1 UEPS: Another retained holding with a good deal more upside — especially if new management

can restructure operations to spin off a very intriguing fintech hub. Oh, did we mention there’s plenty of cash sloshing around the balance sheet?

eMedia: This TV broadcast group falls in the market’s blind spot, mostly because the share is

frustratingly illiquid. Major shareholders Hosken

Consolidated Investments and Remgro have been patient with free-to-air satellite platform OpenView, which now seems to have found traction. The confident dividend declaration at the end of the past financial year speaks volumes about prospects in 2022 and beyond.

Zeder Investments: Another share retained from the 2021 portfolio. With The Logistics Company disposed

of for a very decent price, it seems likely Zeder could hold out for a juicy payday for its stake in fruit business Capespan. The Zaad seed and agri-inputs business goes from strength to strength, and would make for an intriguing standalone listing (possibly on a foreign bourse).

Merafe Resources: Even if the ferrochrome price wilts a tad, shareholders in this specialist mining

business should be in line for a bumper dividend.

Nor can the possibility of corporate action be ruled out (see page 29 for more).

Master Drilling: More than a handful of market experts canvassed by the FM picked this mining

services company as a share to watch in 2022. The bulging order book is reassuring, and there must be a chance for Master Drilling to snag extra business as new mining activity picks up.

RECM & Calibre: These days, RACP is a proxy for cash-spinning alternative gaming business Gold

Rush. With Covid’s influence waning, Goldrush’s electronic bingo halls should be more vibrant. Cash flows should be compelling, and — if debt is paid down to acceptable levels — dividends may not be that far off. It’s also worth watching for fresh developments in sports betting and online gaming.

Karooooo: The old Cartrack business is chugging along nicely, with reassuring growth in quarterly

subscription numbers. The slightly delayed thrust into

Asia Pacific markets will hopefully start paying off this year, with core operations in SA and Europe underpinning that growth with dependable cash flows.

Trencor: This is a defensive rand hedge play — noting US interest rate scenarios for 2022 — with

Trencor sitting on the equivalent of about R1.2bn in dollars. Complicated indemnities have precluded cash being paid out as a special dividend. Hopefully these remaining legacy hitches can be sorted out sooner rather than later.

● Over the past year, bank prices rebounded thanks to good news on debt provisions. In most cases, the provisions proved to be highly conservative and led to a strong rerating from March 2020.

Investec was the star performer. Many investors believed it would be especially vulnerable after it unbundled the most successful part of the business, Investec Asset Management (now Ninety One). Yet its bad debts came down to a negligible 0.07% by September.

Capitec had a strong year. It continued growing its client base despite increased competition from low-cost rivals including TymeBank and Bank Zero.

Within the “big four”, Absa and Nedbank, which had more traumatic falls in early 2020, recovered best, with share prices up about 30% each.

FirstRand looks to be the best choice for the long term. Former FNB CEO Michael Jordaan argues that it’s at least two years ahead on the journey to

BUILDING & CONSTRUCTION

There are only a handful of construction stocks left on the JSE, but some that remain had a Lazarus-like 2021: Aveng gained 297%, Raubex rallied 88% and WBHO rose 33%. Building supplies companies did well too, like Cashbuild

(+29%), Afrimat (+38%), PPC (+285%), Sephaku (+163%) and Italtile (+18%). The latter operate in a contested space, but results from all players attest to the Covid-induced DIY frenzy of 2020-2021.

The question is, how much is left in the tank, considering the run that the construction stocks had last year? While retail investors have been piling into Aveng with gusto in recent months, it is unclear whether the steep rise in its share price can continue before it begins to repay this faith with money in the bank.

By contrast, there may still be scope for the building supplies companies to grow this year. In its most recent trading update, Italtile explicitly said people’s lockdown-induced dissatisfaction with their homes had been a wondrous oneoff becoming a more digitally focused platform. But that is unlikely to be a catalyst for share price growth over the next year.

Standard Bank probably won’t be a winner while there is uncertainty around its African that won’t last. But as far as quality companies go, you don’t get much better than this one. That’s why its shares are so tightly held by a committed band of institutional investors alongside founder and nonexecutive chair operations, which depend on commodities.

Nedbank is likely to be held back by its expensive ambitions to offer “anything legal” on its Avo super-app. But Absa has a good chance to make progress.

Giovanni Ravazzotti.

For the past 20 years Italtile has remained one of the JSE’s most consistent performers, and it will benefit from the push for more infrastructure investment.