Blushes for fund managers
MARKETS might be able to stay irrational longer than investors can stay solvent, but there are red faces among fund managers who predicted big things for stocks that tanked this year.
For the first seven months of this year, asset management company Coronation is the bestperforming share, up 66% as investors reward its fund managers for outperforming their rivals.
Capital & Counties Properties, which invests in London real estate, was second best with a 61% rise in earnings, followed by paper company Mondi, up 58%.
Media company Naspers continued its stellar rise, up 52%, thanks mainly to Chinese investment Tencent and MultiChoice.
It’s perhaps no surprise that mining companies that were savaged by the plunge in commodity prices and labour strikes loomed large among the worst performers.
Of the five worst performers to July, four were mining shares.
However, even the miners could not do worse than African Bank, which is officially the worst-performing stock, according to a list released this week by Anchor Capital.
It’s been a nasty slump. At the beginning of the year, the unsecured lender had been poised to recover from concerns over its retail arm Ellerines and mounting bad debt. But then things got even worse.
African Bank’s stock shed 55% in the first seven months of the year — 11% in the month of July alone. Ratings agency Moody’s has changed its outlook on African Bank to “negative”, which means another rating downgrade is possible, over concerns that unsecured lenders are in for an even tougher time.
Shares performing second worst were gold companies AngloGold Ashanti and Harmony Gold, which lost 51% of their value over the past seven months. Impala platinum, down 42%, and Gold Fields, down 36%, rounded out the top five worst performers.
This has been embarrassing for a number of fund managers who late last year chose companies like African Bank as one of their picks for 2013. Alwyn van der Merwe, director of investments at Sanlam Private Investments, was one of those.
Van der Merwe admitted he made the wrong call, but maintained the African Bank sell-off had been overdone.