The last time I saw the redoubtable Remgro, the doyen of the JSE’s investment holding companies, plunge as alarmingly as now was during the 2008 financial crisis.
I remember wishing I had bought more on the dips, but as usual I probably had another stupid small-cap strategy playing out in the background.
This time the fall in Remgro’s share price is not due to vicious market movements. Rather, it’s a structural issue of the market seriously questioning the capital allocation acumen of the group’s well-regarded executive team.
At the time of penning this editorial (March 20), Remgro, which was trading at R164 only three months ago, had tumbled as low as R125.
Do you nibble? Do you watch from the sidelines? I still regard Remgro as a better option than a general equity unit trust or even the exchange traded funds that are pegged on value or quality. Some — perhaps many — readers will disagree vehemently.
Perhaps the JSE is not as deadly dull as some punters would like to think
Sentiment is pretty jaundiced. You need to look no further than at certain flippant remarks on social media. Remgro will, undoubtedly, muddle its way through this mess. But in the short term, the discount the share offers on a much-questioned intrinsic NAV could remain a lot wider than the traditional 25%-35% of yesteryear.
In better news, at least we are seeing the first bits of hustling and bustling on the JSE, with the (unbundled) listings of WeBuyCars and Rainbow Chicken.
The latter was previously a standalone listing. I remember that when the share price dropped below 20c in the 1990s there were stories about golfing stockbrokers using Rainbow scrip in their games of “skins”.
Interestingly, the JSE, on the occasion of its results presentation, also made mention of three new resource secondary listings. Add a few more new listings (Coca‑Cola, Fidelity, Netstar, I&J?) and the JSE would have the much-needed momentum on the new listings front.
I’m also glad to see that small biotechnology group Cilo Cybin Holdings, which had previously canned its listings plans, is pressing ahead with an IPO ahead of a possible listing on the JSE’s AltX.
Add in that we have probably seen the start of an acrimonious battle for control at poultry, egg and animal feeds specialist Quantum Foods and perhaps the JSE is not as deadly dull as some punters would like to think.
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