UK investment giant sees big opportunities in South Africa

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The South African unit of M&G, the UK fund manager overseeing more than $390 billion in assets, sees opportunities in investing in the nation’s industrial and financial companies as earnings growth may surprise.

Some of these companies have recovered faster from Covid than many in the market anticipated, said Kaitlin Byrne, a Cape Town-based equities fund manager at the firm. They offer an alternative for investors to the Johannesburg market’s large resources segment, she said in an interview.

South Africa’s economy is back at the size it was before the pandemic struck, after expanding 1.9% in the three months through March, a potential boost for the financial sector. While the country’s main stock index slipped 10% in the first half, that was a better performance than the benchmark for emerging-market shares, which slumped twice as much.

The Foschini Group is an example of a company that has bounced back from Covid better than anticipated. Sentiment around the Cape Town-based retailer just after Covid signaled “a very slow trajectory, but earnings came back a lot faster than the market had priced in,” Byrne said. The company swung from a loss to a profit when it reported full-year earnings on June 10.

Mobile phone giant MTN was valued by some purely on its South African operations, with a larger-than-justified discount on its businesses elsewhere because of regulatory and other risks, Byrne said. MTN’s attractiveness was increased by its businesses in Nigeria – its largest market – and Ghana, which are currently growing above 20% annually, she said.

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I don’t know how stupid the uk must be to invest in this country your money is gone once the anc get their grubby little paws on that money good lucky on seeing a return on your investment no country should invest in this country

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