What’s the buzz on BEE discounts?
Empowerment counters GPI, Brimstone and AEEI offer an opportunity to get in on quality assets — and there could be easy money to be made, writes Marc Hasenfuss
The discounts offered on the JSE’s handful of empowerment investment companies are bewilderingly big … and perhaps a huge opportunity, in some instances, to acquire a portfolio of quality assets that will offer rewards on a sustainable basis. Enduring and dividend-paying empowerment counters such as Brimstone Investment Corp, Grand Parade Investments (GPI), Hosken Consolidated Investments and African Equity Empowerment Investments (AEEI) are all trading at disparaging discounts to their intrinsic NAV. It’s basically the same story for recently listed African Rainbow Capital (ARC), which holds a few interesting early-stage big bets. ARC at last count was offering close to a 40% discount on its last stated NAV. Historically, the JSE’s so-called investment trust companies would offer discounts of anything between 10% and 25% — sometimes, as has been the case with PSG Group, sporadically trading at a premium to NAV. If an investment counter trades at a discount of more than 25%, there w...