OPINION
let them eat bread
The JSE needs listings of new schools
High-tech IPOs focused on big data, internet of things, electric vehicles, robotics and biotech? Not for us. In South Africa, we stick to bread and Coca-Cola. Coca-Cola Beverages Africa’s listing was postponed earlier this year, but Premier Group, which controls 24% of South Africa’s bread market, released its pre-listing statement on Tuesday and could list soon as the group Christo Wiese’s investment company, Brait, plans to separate. its largest holding company.
The newest JSE list will not be a sexy unicorn. It won’t get you rich quick, and it’s not big. Its market value is estimated at between 6.9 and 8.9 billion rand. It will be among the smallest in its sector, which also includes Tiger Brands (R34 billion), AVI (R25 billion) and RCL Foods (R10.3 billion).
Still, Premier is a proper player: It has cornered a third of the SA flour market and controls almost a fifth of the markets for cornmeal, sugar-based confectionery and feminine hygiene products. Its brands include Blue Ribbon bread, Snowflake flour, Iwisa cornmeal, Super C candy, and Lil-lets SA. The group has experienced strong growth, despite soaring input prices and reduced loads. In the last six months, its revenues have increased by almost 24% over the previous year and its EBITDA has grown by almost 16%. Unlike those bold tech moves, it plans to pay dividends early on.
Premier JSE input is welcome. Fidelity Services Group, South Africa’s largest private security firm, is also reportedly considering an initial public offering, and OUTsurance will soon have its own listing. But these entrants aren’t game changers for the local investable universe, which is rapidly shrinking amid the delisting of big companies like Mediclinic and Distell.
Not only that. The fact is that the investment offer in JSE is quite old. While you can gain exposure to fintech and mobile payment technology through SA’s largest banks and telecom groups, to really capitalize on the revolution in digital technology and other international innovations, you’ll need to invest elsewhere. It’s a shame, South Africa was the birthplace of cloud services (Amazon Web Services) and revolutionary technology that allowed messages to be sent from the Internet to mobile phones (Clickatell).
But for now, as tech stocks tumble and the crypto crisis dulls all things intangibles, an even bigger shame is that there aren’t any big JSE-listed investment options in the only SA sector set to grow in the coming years. : renewable energy. .
As Warren Buffett advised, never invest in a business you can’t understand. After 15 years of load disconnection and Eskom crisis, South Africans now understand electricity almost as well as bread and Coke. Emerging power players may find a particularly receptive investor base in SA. Unfortunately, with all the red tape and regulation, exchanges are no longer the place to go for capital. The JSE and its competitors must innovate to attract these new players and help turn the pain of power for South African investors into long-term gains.
quote of the day
I never thought I would see the day a minister would come to justify the NHI because his own medical aid ran out of funds.
– EFF MP Naledi Chirwa after Health Minister Joe Phaahla, in a presentation on the merits of the NHI, shared how he had to “dig deep into his pocket” to pay for medicines during a recent visit to the pharmacy , after being told that her doctor’s aid savings funds ran out.
chart of the day
day number
A$250 million (2.9 billion rand)
Previously:
INVENTORY TAKING | Where did the Trustco trust go?
INVENTORY TAKING | Another SA firm burned in Australia and what Correos and Twitter have in common
INVENTORY TAKING | Will Gold Fields fall short?
INVENTORY TAKING | Chicken Licken looks into everyone’s souls and Shoprite has a following in Singapore
INVENTORY TAKING | The Dis-Chem elusive, and will you pay with cash, card or cryptocurrency?
INVENTORY TAKING | Discovery executives make bank
INVENTORY TAKING | Heineken keeps it green, Godongwana’s careful words and SA tax revolt odds
INVENTORY TAKING | In praise of the great worries of SA
INVENTORY TAKING | Eskom (sort of) spurs business spending, while superyacht heads to SA
INVENTORY TAKING | Telkom is planted and Markus 2.0
INVENTORY TAKING | Dis-Chem drama and Pick n Pay slump point to trouble ahead
INVENTORY TAKING | A Tale of Two Foundries, and Did the Banks Get the Home Loans Wrong?
INVENTORY TAKING | The Reserve Bank talks to hawks and Harmony resurfaces underground
INVENTORY TAKING | Allan Gray shines Gold Fields and Anglo’s Kusile-sized generator
INVENTORY TAKING | Pick n Pay’s Big Bet: Should You Follow Gerrie?
INVENTORY TAKING | Is Sasol’s hydrogen plan just hot air?
INVENTORY TAKING | Karooooo grows his Os and Ackerman tells it like it is
INVENTORY TAKING | A German cure for SA labor problems, and what is Schadenfreude in Swedish?
INVENTORY TAKING | Allan Gray shines Gold Fields and Anglo’s Kusile-sized generator
INVENTORY TAKING | Telkom avoids signal loss in the middle of the rain, and the Woolies win
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