TRICKY MONTHS AHEAD
Inside Remgro's value trap
CEO Jannie Durand says it is difficult to make sizeable investments in SA before the ANC’s December showdown
The share price of investment giant Remgro was offering a discount of close to 19% on the stated intrinsic net asset value (NAV) of R258/share as at September 18. That’s better than the 28% discount the share price offered in October 2008 when Remgro unbundled its shares in British American Tobacco (BAT). But there have subsequently been times when the discount narrowed to under 10% — and even 5% on several occasions.Remgro CEO Jannie Durand conceded it is difficult, at this delicate juncture, to make sizeable investments in SA. "Until December [when the ANC’s elective conference will be held] it will be a very unstable and volatile environment in which to invest," he said. Durand seemed to take issue with a contention that Remgro has suffered from "new investment inertia" over the past four years. He pointed out that the group spent more capital in the past four to five years than the previous four to five years. That is true. But Remgro has mostly directed capital at existing inve...
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