Shares in Sasol dropped sharply on Friday after the company announced that it would delay the release of its annual results by a month. This is because its auditors need to consider an independent report the board had commissioned on its Lake Charles Chemicals Project.
This is the latest in a string of bad news related to the project. In May Sasol provided an update on Lake Charles in which it revised its cost estimate for the project up by $1 billion.
Having originally estimated that the project would cost $8.9 billion, the final cost is now expected to be in the range of $12.6 billion to $12.9 billion.
At current exchange rates, that equates to around R190bn, which is more than Sasol’s total market capitalisation.
The ongoing concerns around Lake Charles have put severe pressure on Sasol’s share price. The company’s stock is now trading at levels below those of five and even 10 years ago.
This has had a significant impact on South African investors, since Sasol is one of the most widely held companies in local portfolios. A Moneyweb analysis conducted just under a year ago showed that Sasol was the third most popular counter in South African unit trusts after Naspers and British American Tobacco.
Sasol is also a large component of many JSE indices. Although the slide in its share price has reduced its market capitalisation, it is still one of the 10 largest companies in the FTSE/JSE All Share Index, and the third largest stock in the FTSE/JSE Resources 10 Index.
Many local funds are therefore heavily exposed to the counter. This is particularly the case for commodity funds, but as the list below shows, many general equity funds also give it a high weighting in their portfolios:
|Funds most exposed to Sasol|
|Coronation Resources Fund||12.65%|
|Satrix Resi ETF||12.43%|
|Nedgroup Investments Mining & Resources Fund||12.38%|
|Old Mutual Mining & Resources Fund||9.69%|
|SIM Resources Fund||9.53%|
|NewFunds Shari’ah Top 40 ETF||8.66%|
|NewFunds S&P GIVI SA Resource 15 ETF||7.49%|
|Investec Commodity Fund||7.33%|
|Integrity Equity Prescient Fund||7.16%|
|Momentum Resources Fund||7.02%|
|Alexander Forbes Investments Equity FoF||6.62%|
|Allan Gray SA Equity Fund||6.52%|
|Sanlam Private Wealth Equity Fund||6.43%|
|Laurium Equity Prescient Fund||6.26%|
|Satrix RAFI 40 ETF||6.12%|
|Satrix RAFI 40 Index Fund||6.1%|
|Old Mutual RAFI 40 Index Fund||5.97%|
|Nedgroup Investments Value Fund||5.96%|
|Aluwani Equity Fund||5.96%|
|Mazi Asset Management Prime Equity Fund||5.79%|
Data from Morningstar shows that a large number of international funds also have exposure to Sasol. Although some of this data is dated and therefore not completely accurate, it does show how widely recognised the company is.
It appears in portfolios domiciled in Namibia, Japan, Taiwan, Ireland, the US, Netherlands, the Isle of Man, Germany, the UK, Australia, Luxembourg, France, Switzerland, Denmark, Norway, Canada, Liechtenstein, Mauritius, Finland, New Zealand, Austria, Sweden, Belgium and Jersey.