Ntsako Mthethwa
5 minute read
15 Mar 2017
7:40 am

JSE directors on a buying spree

Ntsako Mthethwa

Directors buying spree exceeds sellers by a factor of three, suggesting growing confidence in key areas of the market.

JSE directors went on a R2.3 billion sharebuying spree over the last three months. That’s more than three times the R772 million-worth of shares sold by directors over the same period.

So what accounts for the sudden enthusiasm for share buying (bearing in mind that public investors take comfort in directors buying their own shares)?

Several of the shares involved have dipped in price, presenting a good opportunity for buying.

Property company Polksprop, with 10 office and 11 retail projects in Poland, is a case in point. The shares were at R23 in October last year and are now down to about R18. Two of the directors, Marc Wainer and Andrew König, no doubt saw this as a time to stock up, purchasing R160 million- and R76 million-worth of the stocks respectively.

By far the biggest buyer in the last quarter was Paul Harris of Rand Merchant Investment Holdings, who is reported to have bought close to R1 billion of the company’s shares (though he is listed as an indirect beneficiary). The drop in RMI’s price from R43 to R38 in recent weeks perhaps prompted the buying spree. The share price has since rebounded to R42.

Real Estate Investment Trust (Reit) Redefine was another big buyer of its own shares, to the tune of R39 million. Redefine is the largest single shareholder in Polksprop. Clearly, both groups have great confidence in the future of the sector.

Equites is another Reit where the directors are backing themselves. An associate of the company is listed as having bought R359 million worth of the shares in the last three months. The share price is up 30% over the last year to more than R16 this week.

Of the directors who are named as buyers of their own company’s shares, Nic Holland, CEO at Gold Fields, clearly believes the company is a steal at its currently low price of around R40. It touched R91 a share in August last year, and is highly leveraged to the rand and the gold price. Holland picked up R13.5 million-worth of Gold Fields shares in the last three months.

Stuart Bird, CEO of Mr Price, also took a R16 million punt on his company’s shares as it fell to a recent low of R130 in November last year, though has since climbed to about R170.

Horse racing and betting group Phumelela features prominently on the buying list of directors, accounting for no less than three of the top 20 purchases over the last quarter. The share price spiked to R26 late last year, but has since come off to around R20.

Naspers-N is down about 17% from its September 2016 highs, and appears on both the buy and sell columns of directors’ dealings. Non-executive director Stephan Pacak bought more than R10 million of the shares in the last quarter and sold R55 million over the same period, while executive director Mark Sorour offloaded a whopping R89 million of the shares – the biggest sale of the quarter.

There’s no question that lightening up on Bidvest after its doubling in price over the last year made sense for executive director Lindsay Ralphs, who pocketed more than R70 million for his efforts.

The same logic applies to financial services group Transcap, whose price trebled since 2015. A director of a subsidiary is reported to have sold close to R7 million of the shares.

Wayne Hook of Spar took advantage of the surge in share price since 2015 to cash up R7 million worth of his shares.

Perhaps the most interesting aspect of this analysis is the fact that directors are such strong buyers in their own companies, with more than 650 purchases being reported over the quarter, and only 220 sales. Perhaps that is a vote of confidence in the JSE and the investors should take note.

Top 20 buyers Name of director Value Sector
RMIH Harris, Paul K 468,000,000.00 Equity Investment Instruments
RMIH Harris, Paul K 458,640,000.00 Equity Investment Instruments
EQUITES Associate 359,703,528.80 Real Estate Investment Trusts
POLSKPROP Wainer, Marc 160,018,581.20 Real Estate Investment & Services
EOH Mackay, Danny 120,146,159.00 Software & Computer Services
PERGRIN Associate 87,000,000.00 Financial Services
POLSKPROP Konig, Andrew 76,008,819.85 Real Estate Investment & Services
REDEFINE Associate 39,439,872.46 Real Estate Investment Trusts
PHUMELELA Jooste, Markus J 30,224,592.00 Travel & Leisure
DIPULA B Associate 25,927,571.39 Real Estate Investment Trusts
PHUMELELA Associate 16,850,144.84 Travel & Leisure
PHUMELELA Associate 16,850,144.84 Travel & Leisure
MRPRICE Bird, Stuart 16,101,145.00 General Retailers
EOH King, John W 15,260,000.00 Software & Computer Services
CONDUIT Moodley, Tyrone 14,974,564.15 Nonlife Insurance
RCL Director of a Subsidiary 14,570,734.08 Food Producers
GFIELDS Holland, Nicholas J 13,756,207.32 Mining
CONDUIT Riskowitz, Sean 13,665,475.25 Nonlife Insurance
FORTRESSB Brown, Steven 11,750,000.00 Real Estate Investment Trusts
NASPERS-N Pacak, Stephan J Z 10,500,000.00 Media

 

Top 20 sellers Name of director Value Sector
NASPERS-N Sorour, Mark 89 400 120.02 Media
BIDVEST Ralphs, Lindsay Peter 74 393 874.39 General Industrials
NASPERS-N Pacak, Stephan J Z 55 388 940.70 Media
DISCOVERY Maphai, Thabane Vincent 8 036 749.77 Life Insurance
MONTAUK Jacobson, Michael 7 995 000.00 Oil & Gas Producers
PRESCIENT Director of a Subsidiary 7 920 000.00 Financial Services
FORTRESSA Associate 7 666 511.07 Real Estate Investment Trusts
EQUITES Associate 7 586 310.75 Real Estate Investment Trusts
CALGRO Director of a Subsidiary 7 556 250.00 Construction & Materials
SIBANYE Keyter, Charl 7 396 422.99 Mining
FORTRESSA Associate 7 175 474.11 Real Estate Investment Trusts
SPAR Hook, Wayne A 7 126 000.00 Food & Drug Retailers
PSG KST Associate 7 005 817.50 Financial Services
TRANSCAP Director of a Subsidiary 6 900 408.49 Financial Services
A-V-I Cressey, Owen P 6 594 774.45 Food Producers
DISCOVERY Mayers, H P 5 641 725.02 Life Insurance
BARWORLD Wilson, Donald G 5 584 036.80 General Industrials
NAMPAK Director of a Subsidiary 5 506 405.42 General Industrials
PNR FOODS Roux, P M 5 098 053.90 Food Producers
SPAR Godfrey, M W 5 093 073.00 Food & Drug Retailers

Source: Share Magic

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