The South African unit of M&G Plc. was named by Bloomberg. The UK fund manager oversees more than $390 billion in assets and sees opportunities in investing in the nation s industrial and financial companies as earnings growth may surprise.
Kaitlin Byrne, a Cape Town-based equity fund manager, said some of these companies have recovered faster from Covid than many in the market. She said that they offer investors an alternative to the Johannesburg market's large resources segment.
Byrne said people underestimated the ability of earnings to rebound. Given the valuations we are seeing, it is more difficult to decide which stocks to exclude from our portfolios than to find good ideas. South Africa's economy is back to normal as before the epidemic hit, after expanding 1.9% in the three months through March, a potential boost for the financial sector. The country's main stock index fell 10% in the first half, but that was a better performance than the benchmark for emerging-market shares, which slumped twice as much in the first half.
There are domestic threats to the outlook for South African stocks, beyond global concerns of a potential recession. Record rolling power blackouts imposed by the struggling state-owned company Eskom Holdings SOC Ltd. threaten to disrupt the economic rebound, while the gloomiest consumer mood in decades may curb household spending.
Foschini Group Ltd. is an example of a company that has bounced back better than anticipated from Covid. According to Byrne, the Sentiment around the Cape Town-based retailer came back a lot faster than the market had priced in, just after Covid signaled a very slow trajectory. The company reported full-year earnings on June 10 and swung from a loss to a profit.
The market attached low multiples to its jewellery businesses and weakness in its shares gave the opportunity to acquire very strong brands at cheap valuations, according to the case of luxury retailer Richemont, down almost 30% in Johannesburg trading this year.
Mobile phone giant MTN Group Ltd. was valued by some purely on its South African operations, with a larger than justified discount on its businesses elsewhere because of regulatory and other risks, Byrne said. MTN's attractiveness was boosted by its businesses in Nigeria, its largest market, and Ghana, which are currently growing above 20% annually, she said.
Banks have outperformed the market as a whole, with an index for the sector rising by 7% this year, as prospects of an economic recovery and higher rates buoy sentiment. Three banks are included in the 10 largest holdings of M&G s Equity Fund, managed by Chris Wood and Yusuf Mowlana, according to data on the firm's website : Standard Bank Group Ltd., Absa Group Ltd. and Investec Plc.
Johannesburg's benchmark FTSE JSE Africa All Share Index climbed 2.5% by 3: 31 p.m. local time on Monday, the sharpest gain for a week, snapping three days of declines.
Generations of Black Americans lost their land to Tax Liens, despite the fact that they were not able to stop them from doing so.