MARC HASENFUSS: The 'proxy' share problem
What’s in a name? A bit more than meets the eye
What should investment companies do when their shares effectively become a proxy for just one of their holdings? Perhaps nothing, except wait for the situation to play out. I remember how Johann Rupert would chide investors, telling them that the old Venfin should not be viewed as a proxy for Vodacom. He was proven correct when Vodaphone bought out the investment company to get at the valuable minority stake in Vodacom, and shareholders still scored richly from the other holdings, such as Dimension Data, Alexander Forbes, e.tv and Fundamo. These days there are a number of investment counters that effectively trade as proxies for other listed shares. This is a pity, since the JSE outlawed old-style holding companies many, many years ago. Share movements in Hosken Consolidated Investments are largely linked to Tsogo Sun’s share price, PSG takes a fair bit of guidance from Capitec Bank, and Remgro appears to move increasingly in synch with its controlling shareholding in Mediclinic Int...
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