In­vestec’s shares take a ham­mer­ing af­ter Ninety One de­merger


THE SHARES of In­vestec plc and In­vestec Ltd plunged more than 49 per­cent yes­ter­day fol­low­ing the com­ple­tion of the Ninety One de­merger in line with a 11.64 per­cent de­cline in the JSE All Share In­dex.

In­vestec plc shares fell to R36.61 a share yes­ter­day af­ter­noon from Fri­day’s close of R64.57, while In­vestec Ltd dropped to R37.66 from R64.99 recorded on Fri­day.

Ninety One Ltd’s share price closed at R32.90 fol­low­ing an open­ing of R55 dur­ing its list­ing.

Ves­tact port­fo­lio man­ager Michael Tre­herne said the drop was a di­rect re­sult of the Ninety One spin-off.

Tre­herne said while the stock fell, they were bound to bounce back to add back the value of those new shares to get the true price of In­vestec.

“If you add back the value of the Ninety One shares that you re­ceived, the In­vestec share price is still down 23 per­cent, higher than the other bank­ing stocks. It might be the mar­ket sig­nalling that they pre­fer the as­set man­age­ment busi­ness. On such a volatile day like to­day (Mon­day), where emo­tion is driv­ing share prices, it is very dif­fi­cult to know a par­tic­u­lar rea­son for the share price drop,” Tre­herne said.

Sas­fin Se­cu­ri­ties’ se­nior port­fo­lio man­ager Ne­san Nair also pointed the over­all de­cline in the mar­ket as the rea­son for the de­cline in In­vestec’s share price.

“Some of the de­cline is a re­sult of the mar­ket, but most of it is the un­bundling of Ninety One,” Nair said. Ninety One plc and Ninety One Ltd listed on both the Lon­don Stock Ex­change and the JSE yes­ter­day.

The list­ing comes af­ter the strate­gic re­view of the In­vestec group, which con­sists of In­vestec Ltd and In­vestec plc and their re­spec­tive sub­sidiaries in 2018. The spin­ning-off fol­lowed In­vestec’s de­ci­sion to pro­ceed with the de­merger of its as­set man­age­ment busi­ness from the spe­cial­ist bank­ing and wealth and In­vest­ment op­er­a­tions.

The group said the de­merger would fo­cus In­vestec and Ninety One groups on their re­spec­tive growth paths. It said this would en­hance the long-term prospects and po­ten­tial of both busi­nesses for the ben­e­fit of their share­hold­ers, clients and em­ploy­ees.

Hen­drik du Toit, a founder and chief ex­ec­u­tive, said the de­merger and listings marked a his­toric mo­ment for Ninety One, de­spite ex­tra­or­di­nary mar­ket volatil­ity.

“In spite of the cur­rent mar­ket volatil­ity, we are ex­cited about the fu­ture. We are con­fi­dent in the re­silience of our cap­i­tal-light busi­ness model and its or­gan­i­cally de­vel­oped, spe­cial­ist, ac­tive in­vest­ment of­fer­ings. Ours is a long-term story of a unique busi­ness with a care­fully-de­vel­oped cul­ture, a com­mit­ment to em­ployee own­er­ship and a long track record. We re­main com­mit­ted to serv­ing our clients to the best of our abil­i­ties by build­ing a bet­ter firm, pur­su­ing bet­ter in­vest­ment and con­tribut­ing to a bet­ter world,” Du Toit said.

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