Johann Rupert’s Reinet Investments said on Wednesday that the underlying value of its main fund jumped 14% to €5.5bn (R88bn) in the three months to end-December, amid a partial recovery in the share price of British American Tobacco (BAT).

The global tobacco giant share price gained 27.29% in 2019, recovering from a 43.42% plunge the previous year on concerns that US officials would ban menthol cigarettes.

Reinet’s stake in BAT is the fund’s largest investment, representing just less than half its  net asset value as of the end of September. At the time, Reinet held 68-million shares in BAT, representing some 2.96% of BAT’s issued share capital.

The fund’s NAV per share was at €31.87 at the end of December, reflecting the fund’s share holding in BAT, as well as its other assets and liabilities. These had been revalued to their estimated fair value at the end of the period, the group said.

When Reinet listed in 2008, its original stake in BAT was more than 85% of the portfolio, but the investment is under constant review in terms of the company’s performance, the industry outlook, cash flows from dividends, stock market performance, volatility and liquidity.

In March 2018 — despite much diversification in the Reinet portfolio and the sale of two parcels of BAT shares — the tobacco group still represented 71% of NAV.

In afternoon trade on Wednesday, Reinet’s share price was up 0.54% to R291.16.

In the three months to end-December, BAT’s share price rose 6.43%.

With Marc Hasenfuss


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