Johannesburg - A year after the global credit crisis caused foreign investors to run for cover, many are on their way back as international analysts size up South African companies.
Group Five CEO Mike Upton, who spoke to Fin24.com after the group's annual general meeting on Wednesday, said "quite a few" foreign analysts have visited the company in the last six to eight weeks.
"A lot of local analysts walk through these doors, but lately we've been meeting up with a lot of international analysts who have come to visit our offices," Upton said.
"Now that interest rates in their countries are practically at zero, they're looking at emerging markets again to find a higher return on investment, and South Africa seems to be of quite some interest. However, the stronger rand is holding them back a bit."
This is in step with a report released by I-Net Bridge. The newswire stated that SA has become a key market for global investors, according to a report published by UK Trade & Investment.
"Emerging market economies, on the back of the continued high growth and market size of China and India, have outperformed those of developed countries in 2009. Sixty percent of companies surveyed expected to derive more than 20% of their total revenues from emerging markets in five years' time - almost double the current figure of 31%," the report said.
Short AGM passed all resolutions
While all resolutions were passed at Group Five's annual general meeting, some investors called for further transparency on executive directors' remuneration. Minor concerns about carbon credits and the group's carbon footprint were also raised.
On the group's prospects, Upton said the mining sector has started to show a little more activity. He said this - coupled with government's infrastructure spend - should underpin an improvement in private sector spend over the next year.
"With Eskom, only 30% to 35% of the work has come to market in the form of Medupi and Kusile, but they still have a lot more work to do. They just have to get their funding model sorted out," said Upton.
Also, upcoming water projects and the possibility of private sector turnaround would benefit some of Group Five's other operations, Upton said.
Shortly before noon on Wednesday, Group Five's share price was 0.6% higher at 4 190c. The JSE's All-share index was 1.55% higher.
- Fin24.com