Some in the market believe that African Rainbow Capital (ARC) could be the Remgro of our times: a stable, deep-pocketed anchor investor, with impeccable empowerment credentials to boot. If so, it’s not a view that has captivated many retail players in the market yet, if the company’s share price performance is anything to go by. While its intrinsic net asset value as of end-December was R8.79, from R8.46 at listing in September, ARC’s shares on the JSE have steadily fallen to their present level of R6.65, implying a discount of about 32%. While all investment holding companies tend to trade at a discount to net asset value, like Remgro itself, the extent of the discount implies a certain level of unease. Perhaps it’s the wide array of unlisted investments, where investors must take the management’s word on how they arrive at their valuations. In its results ARC defines fair value "as the price that would be received for an asset in an orderly transaction between market participants"...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.