Thursday 07 October 2021 Good morning Voornaam, Having finalised the disposal of LawTrust to Altron, Etion has declared a capital reduction of 33 cents per ordinary share. This is a repayment of 33 cents per share to shareholders without dividends withholding tax being applicable. Those who bought Etion shares just a couple of months ago have almost doubled their money in a matter of weeks. Such is the appeal of small caps. Head to your local bar to hear the small cap horror stories, because there are plenty of those as well. Vunani reported interim HEPS growth of 10% to 21.7 cents and an interim dividend of 6.5 cents per share. Although the institutional securities broking business lost ground, there was significant revenue growth in the fund management, asset administration and insurance premium businesses. There have been a few annou ncements recently of directors selling shares in listed companies. In many cases, these are share incentive awards and the directors sell enough of the shares to cover the cash taxes due to SARS. The market wouldn't view this as a red flag. Where directors are selling shares for other reasons, the market inevitably gets concerned about whether the shares are overvalued. Other signs watched by the market are decisions by asset managers, which must be disclosed every time they cross through a 5% shareholding level. For example, PSG Asset Management sold some of its shares in Merafe yesterday, which could mean that they are taking profits because they believe the Merafe share price has run too hard. This stuff happens all the time and is worth keeping an eye on. Speaking of a share that has had a hard run, Sirius fell more than 4% yesterday after releasing a trading update. I have written for months that I cannot understand why people pay a huge premium to book value for property funds, no matter how clever the strategy has been. That's one of today's feature articles. I have also written on Zeder, a company which makes frequent and interchangeable references to net asset value per share as well as sum-of-the-parts per share. In both cases, no allowance is made for deferred tax. It's a technical point but an important one to understand, along with the need to form a view on how conservative or aggressive the underlying valuations are. In lighter reads, there's a note on Massmart's acquisition of OneCart. This should improve Massmart's ability to fulfil online orders. Interestingly, the platform will continue to fulfil orders at other retailers as well. There's also a short piece on Datatec's trading statement, where HEPS has quadrupled for this interim period vs. the comparable period. Remember to check out the latest forex rates and macro commentary from Currency Assist as well. There's a lot to learn this morning. Grab your coffee and get stuck in! The Finance Ghost |
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