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Johannesburg - South Africa’s Coronation Fund Managers [JSE:CML] is ready to chase after bargains with a “meaningful amount” in North Africa after an uprising in the region spooked investors and hit asset values.
“In the fund sizes, there tens of millions of dollars .. if we think the valuations have become very attractive so there’s a potential to respond in a reasonably meaningful amount,” Karl Leinberger, Coronation’s chief investment officer told the Reuters Africa Investment Summit.
The Egyptian government shut the country’s stock exchange in January after countrywide political protests caused the benchmark index to plunge by 16% in two days.
Egypt’s uprising, following one in Tunisia, has ignited unrest across the Arab world, with the bloodiest in Libya, heightening political risk in the region.
But some investors see long-term benefits from the uprising that is expected lead to changes that could possibly be investor-friendly.
“I think (it) is very good. I think democracy is good for all stakeholders in the economy, it’s good for business in the long term,” said Leinberger, who helps manage a $29bn fund at the investment manager.
“We don’t know how it’s going to play out but ultimately the process was very necessary.”
Emerging market boom
Fund managers are less keen to invest in South African equities, which many other investors expect to have virtually zero returns in the next 5 years.
South African stocks booked their second year of successive gains last year and ended the decade with gains of 260% but the momentum has not carried over into the new year.
The benchmark JSE Top-40 index of blue chips is little changed since the start of the year, reflecting views that the surge in valuations may have run its course.
“Emerging markets equities are very expensive, I think Wal-Mart has captured this beautifully in overpaying handsomely for Massmart,” Adrian Saville, who helps manage a $578.5m fund at Cannon Asset Managers, told the Reuters Summit.
Wal-Mart has agreed to pay $2.3bn, or R148 per share, for a 51% stake in Massmart, whose shares were worth about half that at the start 2010.
“We had an incredible decade here ... Our point to investors is that they should expect much more moderate returns in the future. In fact, there’s much better value now in global markets than there is in South Africa,” said Leinburger.
“In the fund sizes, there tens of millions of dollars .. if we think the valuations have become very attractive so there’s a potential to respond in a reasonably meaningful amount,” Karl Leinberger, Coronation’s chief investment officer told the Reuters Africa Investment Summit.
The Egyptian government shut the country’s stock exchange in January after countrywide political protests caused the benchmark index to plunge by 16% in two days.
Egypt’s uprising, following one in Tunisia, has ignited unrest across the Arab world, with the bloodiest in Libya, heightening political risk in the region.
But some investors see long-term benefits from the uprising that is expected lead to changes that could possibly be investor-friendly.
“I think (it) is very good. I think democracy is good for all stakeholders in the economy, it’s good for business in the long term,” said Leinberger, who helps manage a $29bn fund at the investment manager.
“We don’t know how it’s going to play out but ultimately the process was very necessary.”
Emerging market boom
Fund managers are less keen to invest in South African equities, which many other investors expect to have virtually zero returns in the next 5 years.
South African stocks booked their second year of successive gains last year and ended the decade with gains of 260% but the momentum has not carried over into the new year.
The benchmark JSE Top-40 index of blue chips is little changed since the start of the year, reflecting views that the surge in valuations may have run its course.
“Emerging markets equities are very expensive, I think Wal-Mart has captured this beautifully in overpaying handsomely for Massmart,” Adrian Saville, who helps manage a $578.5m fund at Cannon Asset Managers, told the Reuters Summit.
Wal-Mart has agreed to pay $2.3bn, or R148 per share, for a 51% stake in Massmart, whose shares were worth about half that at the start 2010.
“We had an incredible decade here ... Our point to investors is that they should expect much more moderate returns in the future. In fact, there’s much better value now in global markets than there is in South Africa,” said Leinburger.
