RMB and Investec bankers see search for yield spurring demand for SA assets
The two bankers say cheap shares will spark a rush for undervalued local assets
The heads of two of SA’s top investment banking houses, Investec and RMB, expect record low equity valuations and the global search for yield to embolden foreign investors to pursue deals, such as mergers and acquisitions (M&A), in the country.
“If you look at the SA component [that has exposure to the local economy] of the JSE, despite the recent rise it does look relatively cheap,” said RMB CEO James Formby. “I think the search for yield is going to continue to divert money from low-yielding debt instruments into equity and, at some point, that will mean attention will come to undervalued SA assets.”..