Market watcher & company news: Wayne McCurrie - Momentum Asset Management
ALEC HOGG: Wayne McCurrie is with Momentum Asset Management, usually in the studio. Tonight he’s stuck in traffic, or was. Wayne, it's good to have you on the programme. Let’s talk through these Remgro results. There are many shareholders who watch it eagerly. What was you take?
WAYNE McCURRIE: Well, it's quite frankly as expected from Remgro. They’ve got a very diverse base, centred around FirstRand and financial services, but very big listed and unlisted industrial interests. And it’s a share that we own a lot of.
ALEC HOGG: And the market generally today, Wayne? A little bit softer.
WAYNE McCURRIE: Ja, but it's been so strong, Alec. I suppose you should expect a little bit of weakness coming through. But it's actually quite marginal and of course don’t forget today was futures closeout. So the closing prices could have been influenced by the futures closeout, especially when you see for no apparent reason a big company like SAB down 2% on the day. That's probably related to volumes because of the futures closeout. So don’t read too much into today’s prices. But we've had a very, very strong last week or so. So a little bit of red is not at all unusual.
ALEC HOGG: Investec’s share price, though, was the worst performer on the Top 40 – clearly the market’s not happy with the information out of that company.
WAYNE McCURRIE: Not happy with that. The thing with Investec is the shares look on the face of it incredibly cheap. All asset managers do some sort of normalisation. What that means is if you try and say if everything was just going as per normal, what would their earnings be, and what's the share price like relation to those earnings. And on that basis the share just looks incredibly cheap. But the problem is every time Investec announces results the results disappoint, and it makes you think: can they return to the old normal, or is there some – to coin a phrase – sort of new normal for Investec? So when you look at their results, the actual business that Investec is in is actually not doing so well. The specialist banking, the asset management that’s doing well, and Australia’s doing very, very poorly. They just haven't been able to return, let’s say, to the Investec of old. Their results by and large have just disappointed the market for a sustained period now and the share has come off, underperformed other banking shares quite materially over the last while.
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