Construction sector has ‘learnt its lessons’
Shares of major companies are stuck in the doldrums, at least partly due to underspending by the state
It is not clear what will bring life back into construction stocks. Not even Murray & Roberts, which has exited the moribund SA civil engineering business and garners about 70% of turnover from abroad, can get the market to express interest. Like many other major construction stocks listed on the JSE, the group, headed by Henry Laas, is struggling to free itself from a 17-year low in the country’s construction markets, despite having clearly signalled its intent to focus on global oil and gas, underground mining and power and water infrastructure projects. To this end, it sold its SA-based infrastructure and building businesses to a black-owned consortium, led by the Southern Palace Group. But the share is still stuck in the doldrums, having slumped 85% from nearly R95 in late 2008 — when the global financial crisis began — to about R12 now. Allan Gray portfolio manager Simon Raubenheimer says that a decade ago investors couldn’t get enough of construction shares. “Sentiment today i...
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