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Signage for the Public Investment Corporation outside a commercial office building in Pretoria. Picture: BLOOMBERG/GUILLEM SARTORIO
Signage for the Public Investment Corporation outside a commercial office building in Pretoria. Picture: BLOOMBERG/GUILLEM SARTORIO

The Public Investment Corporation (PIC), whose assets under management have crossed the R3-trillion mark for the first time, is ramping up its investments in SA’s equity market, increasing its stake in rival Ninety One from 10% to 15%.

Ninety One, spun off from Investec a few years ago, in June reported assets under management of £126bn (R2.8-trillion) in the year ended March.

Ninety One, listed in both Johannesburg and London, has been in a purple patch with its stock up 12% over the past month, joining other financial services groups whose stock has benefited by market optimism after May’s elections which produced a government of national unity (GNU).

The financials index has surged 16% year to date, benefiting funds invested in the sector. 

The PIC, Africa’s largest fund manager, last week said it would have loved to invest more in the financial services sector, but had hit a limit in investing in the sector.

The all share index is up nearly 11% in 2024, buoyed by financials, property stocks and industrials.

A survey on behalf of Bank of America (BoA) conducted by research firm Ipsos found a record number of fund managers expected SA’s GNU to implement “meaningful reforms” that could see the local markets deliver returns in excess of 10% over the next 12 months.

The BoA global research SA fund manager survey found that asset allocators expected an average return of 17% on equities in the coming year, 8% for cash holdings and 13% on government bonds maturing in 2035.

Almost 90% of the fund managers surveyed were overweight on domestic stocks, particularly in banks, apparel, retail and general industrials, reflecting growing confidence in SA’s equity market.

Two-thirds of the managers polled believed local equities were undervalued, signalling potential growth opportunities, while one-third see value in SA bonds.

The PIC this week also hiked its exposure in WBHO, with it now owning 20% of the group. 

WBHO earlier in 2024 declared its first interim dividend in four years after strong growth across its divisions, particularly within the roads and earthworks sector.

The construction group, worth about R15.4bn on the JSE, is the only remaining construction giant to have held on to most of its value after several of its former peers, such as Basil Read and Group Five, succumbed to the dearth of construction work after the 2010 Fifa World Cup and filed for business rescue in 2018 and 2019.

The PIC has also recently took its stake in mining and metals processing group Sibanye-Stillwater to just over 15%.

Other investors have also joined the party, buying up SA equites, after what investors have described as a “lost decade” for SA assets. 

The US’s largest bank by assets increased its exposure to in SA’s largest retail group, Shoprite, to more than 7%, with its interest in the Brackenfell-based company valued at about R12.5bn, making it one of the group’s largest shareholders.

In a recent buying spree, JPMorgan took its stake in Sibanye to 6.17% of the group’s total issued shares, positioning it as Sibanye’s third-largest stakeholder.

The PIC’s CIO Kabelo Rikhotso backed platinum group metals (PGMs) to play a big role in the green economy.

Sibanye, one of the biggest private sector employers in SA, has significant PGM assets.

“A lot of our PGMs are used in catalytic converters, largely diesel cars to clean up the emissions. As the world becomes cleaner and we see the advent of electric vehicles, you have less demand for PGMs. However, our research tells us there is potentially a use for PGMs if you look at the hydrogen economy,” Rikhotso said. “That is one area where if we were facing an industry that may not have a lot of use for its minerals, we think we need to find alternative sources.”

Another company that JPMorgan has taken a strategic position in is Stellenbosch-based lender Capitec, which has more than 23-million active clients. JPMorgan’s stake in Capitec sits at about 5%.

With Michelle Gumede

khumalok@businesslive.co.za

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