From Investors Monthly
MARC HASENFUSS: Looking ahead to 2018 and possible new listings
Next year we are likely to see a handful of new listings again. Empowerment companies will lead the charge
Okay, so maybe my theory about a listings boom on the JSE every 10 years is starting to fall apart. Unlike 1987, 1997 and 2007, there was no rush to the JSE by companies hungry to raise capital to fund ambitious organic and acquisitive growth.
But in 2017 investors had to endure more political (and by extension) economic jitters than we have seen in the recent past.
The JSE — outside Naspers, and a few other large caps that are delinked from what passes as the local economy these days — had it tough. The meltdown in the Consolidated Infrastructure Group share price — and to a lesser extent the persistent pressure on now-fallible former market darlings like Woolworths, Rolfes, Brait and Sun International — betray a menacing morbidity in the market.
I’m clutching at straws here, but at least there is encouraging market activity in terms of new listings. I count roughly a dozen new listings in 2017 — excluding old/new listings such as Master Plastics (ex Astrapak) and the merged Nepi Rockcastle.
The newer listings have tended to disappoint in terms of share price gains (or lack thereof). Brian Joffe’s Long4Life has drifted below the issue price, while African Rainbow Capital was not a pot of gold. Fishing counters Premier and Sea Harvest have drifted. Avior, Kaap Agri and Pembury Lifestyle Group have been disappointing.
Next year we are likely to see a handful of new listings again. Empowerment companies will lead the charge with SA Clothing & Textile Workers’ Union-aligned Hosken Consolidated Investments aiming to list its Golden Arrow Bus Services; and African Equity Empowerment Investments keen to float its technology hub, Ayo.
International investment giant BlackRock is on the verge of listing its European fund on the JSE, and Peregrine is set to list its investment offshoot Sandown Capital.
There must be a possibility of PSG Group considering a listing for its power management and water services subsidiary Energy Partners. With an abundance of project work on hand, it may be time to secure fresh capital for this business.
Other listings I would like to see would be Trematon (where I am a shareholder) spinning off its fledgling private education business Generations Schools, and Altron looking at a separate listing for its re-invigorated vehicle tracking operation Netstar.
This will be the last edition of 2017. I wish all readers a prosperous 2018.
For those who can muster the enthusiasm, mail a five-share pick for 2018 to firstname.lastname@example.org at the close of trade on Friday December 29. The winner will be treated to a slap-up lunch at Cape Town’s finest eatery, Magica Roma, (my treat, of course), and an autographed copy of a vintage 1996 Stock Exchange Handbook to the runner-up.