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Johannesburg - South Africa's private retail investors have become increasingly more confident with the return of stability to equity markets since the latter part of July.
That's according to Willem Theron, CEO of PSG Konsult, the unlisted subsidiary of the PSG Group and South Africa's largest private client stock- and insurance broking operation. He spoke to Fin24.com on Monday, after the release of the interim results for period to end-August.
"Since the latter part of July we have definitely seen people wanting to come into the market," said Theron.
Headline earnings at PSG Konsult declined by 16.8% to R39.5m, while headline earnings per share were off 17% to 5.4c per share.
Total income increased by 3% to R373m while funds under administration increased to R63bn from R50bn, after the acquisition of T-Sec's private client stockbroking division earlier in 2009.
Asked what the mood of South Africa's private clients was, Theron said investors were coming back into the market, albeit cautiously. He based his observation on a rebound in the uptake of single stock futures (SSFs), in particular increased numbers of trades, although on far smaller deal sizes than were seen in 2007 and early 2008.
He added PSG Konsult itself remained cautious and retained high levels of margining to ensure it was not caught out by market volatility and a lack of liquidity, which punished contract for difference (CFD) and SSF holders in 2008.
Another factor Theron felt contributed to a rebound in the private client business was investor disillusionment with other investment opportunities. He pointed out that there had been a number of high-profile property syndicate collapses; investors who had been burnt were now taking some responsibility for their own finances.
In terms of the market outlook, Theron said he expected 2009 to remain volatile with liquidity to remain low. However, he said that the group was expecting more liquidity as large-scale pension funds came back into the market in 2010.
The company declared an interim dividend of 2.8c/share.
- Fin24.com