Piet Viljoen’s Counterpoint impress fund has been basically the most fundamental performing local fund over the closing five years, managing to enact a compound annual return of a coloration under 15%. This is a shapely achievement, especially against a backdrop that hasn’t continually been conducive to his funding model, which is impress focused. The interview concentrates on two matters; the delisting fashion that faces the local bourse and legacy-stricken Steinhoff. Piet, who has listed businesses himself, says the burdensome regulatory and accounting requirements outweigh the advantages of being listed on but every other. He provides that traders is more most likely to be getting a bit of excited concerning Steinhoff’s R25bn valuation, as despite the more transparent avenue to recovery, it restful faces a vary of tense headwinds. – Justin Rowe-Roberts
Piet Viljoen on whether or no longer traders want to temper their return expectations in 2022:
Watch, I’m restful optimistic about returns readily available from emerging markets in total, non-Asian based fully emerging markets. Markets luxuriate in Russia, South American, Latin American and South Africa particularly and there are a pair of of these markets that are restful declare shapely. It’s relatively easy. What sets the bar for long-term returns for markets are ardour charges. So, whenever you happen to deem at the ardour charges in Russia, Mexico, South Africa and Brazil, they are all between 8% and 12%. That’s what you’re working with and equities ought to restful give you one thing in draw over that over time. Those markets are correctly positioned, the set aside I could possibly maybe want to temper my expectations round returns more within the developed markets in Europe and the US, the set aside bond yields are damaging or zero because that sets the bar relatively low. Attributable to very low ardour charges in those markets, equities had been priced relatively extremely because at the discontinue of the day, the cash flows to the equity householders of the exchange are sure by discounting the entire future earnings, by the ardour fee and, if ardour charges are very low, the affirm impress sum is a spacious quantity and that’s the rationale what has came about to those equities. I don’t mediate there is room for one to demand unbelievable outsized returns from those markets over the subsequent three to five years.
On the causes for the delisting fashion on the JSE:
I mediate there are several elements at work here. #1, from a regulatory point of look – by come of compliance and accounting standards – it has turn out to be burdensome to be listed wherever within the sphere, no longer only South Africa. The foundations and regulations luxuriate in turn out to be very exhausting. The accounting standards luxuriate in turn out to be nearly ridiculous whenever you happen to deem at what they impress you produce this affirm day with regard to shapely impress accounting and all those kinds of issues. That is the one declare of pressures listed companies face. So, we are seeing more and more delistings globally. The second, critical factor, is that quite a lot of the cash is flowing into index funds and all those funds produce is bewitch the tidy companies, so smaller companies rating fully pushed aside. Whereas you happen to produce a small-cap checklist, you rating no traction since the index funds are impartial correct no longer attracted to shopping for small companies. Moreover, within the asset management exchange up to quite lately, cash has been flowing to the tidy fund managers. And again, they don’t care about small companies.
On why legacy-stricken businesses fight to ever increase:
Patrons speed for the hills after they lose belief and these businesses turn out to be pushed aside and out of favour. Especially one thing luxuriate in Steinhoff, which used to be so accepted and a spacious portion of most traders’ portfolios. It goes to be exhausting for it to rating its feeble rating relieve again. It’s imaginable but this can expend a actually long time and there shall be many starts and forestalls alongside the come. Now we luxuriate in seen it under R1 and now it’s 5.6x (R5.60). I don’t mediate it’s that cheap anymore but it owns some correct businesses. In the waste, if the management crew performs the ball correctly, I mediate they’re going to luxuriate in a great exchange going forward and produce quite correctly for shareholders over the long term. I mediate it’s relatively imaginable, and the the same goes for others, as correctly. Nevertheless what you produce need is the feeble management to rating cleaned out and a fresh idea project within the exchange. You would prefer ethical exchange dealings.
Read moreover:
- Easiest of 2021: ‘Bubbles created by gatvol South Africans impress opportunities’ – Piet Viljoen on SA economic system
- Easiest of 2021: Piet Viljoen – ‘Investing in SA residential property doesn’t impress sense.’
- BizNews share shootout – Piet Viljoen facets with Sasol and Rebosis
(Visited 10,424 times, 67 visits lately)
Cyril Ramaphosa: The Audio Biography
Hear to the tale of Cyril Ramaphosa’s upward thrust to presidential vitality, narrated by our very luxuriate in Alec Hogg.
Narration by Alec Hogg
