SIMON BROWN: I’m chatting now with Peter Little, fund manager at Anchor Capital. Peter, I appreciate the early morning time. Last Thursday, as the invasion started in Ukraine, you and your team put out a note, [so] I thought let’s catch up a week later in terms of market responses. The key point perhaps is that these two economies are quite small. Russia is 1.8% of global GDP, Ukraine only 0.2%. But of course this is war in Eastern Europe – there are bigger issues to it.
SIMON BROWN: If we look at markets, the US was truthfully selling off ahead of the invasion and actually is above the levels which it was [at] – they were closed last Thursday ahead of the invasion. Europe is obviously under pressure; the FTSE 100 and Euro Stoxx 50 have both been falling. Locally we are actually higher because of those commodities.
Also the fact that Russia’s essentially like a persona non grata from a EM investment perspective means that there’s a big share of the pipeline to come to South Africa as well. So some benefits for us, certainly. People expect higher wage hikes, landlords want to put rent up in anticipation of this thing, and those things can become more sticky.
SIMON BROWN: Locally two stocks have significant exposure. They’ve both issued Sens around it – Barloworld at around 20%*, Mondi** at around 12%. Both have come under significant pressure. Is your sense this has been priced in, or is this a case of rather than taking positions here, watch and see what’s happening in the two companies – both of which are high-quality stocks.