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Cape Town - Research has shown that institutional ownership of companies listed on the AltX has dropped off between March 2008 and the end of December 2008.
In March 2008, about 13% of the total capitalisation of the AltX - the JSE's alternative bourse for emerging and smaller companies - was in institutional hands. By the end of 2008 this had slipped to just over 9%.
This was the finding of research undertaken on behalf of the JSE by Symphony Investor Communications, and published on Wednesday in the AltX's newsletter, The Alternative.
Ahmed Bohkari, general manager of Symphony Investor Communications, said the research was aimed at measuring how institutional holdings on the AltX had changed between March 2008 and the end of December 2008.
The research covered a period during which the AltX's surfeit of new listings saw a major shake-out as the global financial crisis unfolded.
Bokhari said that 47 out of a possible 79 AltX listings responded to the JSE's request to make their share registers available.
Bokhari suspected the drop in institutional interest in the AltX was because of extreme price volatility. "Another possible reason could be due to unit trust redemptions, which have significantly increased over the period."
Stanlib is biggest investor
Symphony found that Stanlib was easily the most heavily weighted institutional holder in the AltX by rand value and number of shares held.
Stanlib's collective holdings on AltX at the end of 2008 was estimated at almost R370m, spread between 22 of the 47 companies analysed by Symphony.
Symphony said Stanlib was also the largest seller on the AltX - as indicated by the largest reduction in the weighted average number of shares held - during the period.
Stanlib's holdings declined by 3 million shares followed by Coronation Fund Managers and Sanlam, with decreases of 2.8 million and 1.7 million respectively.
Although Symphony's research found institutional holdings have declined over the period, Bohkari said the majority of the fund managers found holding shares in AltX companies in March 2008 still had interests in the sector as at the end of December 2008.
"These interests, however, have been substantially reduced by the majority of the institutional holders."
Bohkari said the Efficient Group (which will soon be listing) was the only fund manager which completely exited its positions in four of the 47 companies analysed in the research.
Katz Gold Trading & Investments, which manages the Spyglass range of funds, also saw a sell-off, retaining interests in four companies at the end of December 2008 compared with eight companies at the end of March 2008.
Bohkari said Osborne Capital, a hedge fund manager, seems to be one of the few institutional investors taking a long view on the AltX companies.
Osborne's investment in rand value (spread between five AltX companies) increased by R23m between March 2008 and the end of December 2008.
- Fin24.com
