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Puzzling share price movements

Along with some answers for Anglo shareholders and the grim news that 130m litres of beer may ‘need’ to be destroyed.
Buildings are still standing, but there is no end to the destruction being wreaked by this pandemic. Image: Shutterstock

For much of its 30 months as a listed company Ayo Technology’s share price chart has had the chunky appearance of a Lego set with distinct step movements up, down and sideways, none of the more traditional undulating curves associated with listed entities.

Perhaps because everything is just that bit more pronounced during Covid-19 lockdown, last week there was a steeper than usual step upwards in the Ayo share price. It’s a share that is rarely traded and often on those rare occasions the volumes are small. Just before the close of trade last Tuesday 158 shares were bought by someone prepared to pay 940c a share, which was more than three times the price at which the share had been trading for the previous two weeks.

The 940c was an eye-catching premium on the 300c at which the Ayo share had been trading.

Indeed the last time Ayo traded near this level was in August last year. Since then it has chunkily stepped downwards to an all-time low of 92c in February before stepping upwards to 300c. On Friday an unusually high (for Ayo) volume of shares were traded at 939c.

 

Ayo share price

 

The market regulation team at the JSE tells Moneyweb it is looking into the trades. This is probably always a good idea when volumes are so low – and price movements so chunky.

Talk of Ayo share price movements inevitably prompts memories of the search and seizure ‘raid’ on Sekunjalo’s offices by the Financial Sector Conduct Authority (FSCA) late last year as part of an investigation into allegations of share price manipulation in Ayo shares. That investigation promptly got bogged down in a court battle over access to the documents and files that were seized.

The investigations and enforcements team at the FSCA told Moneyweb last week there has been no progress with this court action as it was not considered urgent. And yes, the lockdown has probably added to the time it will take for the matter to be heard by a judge, but the FSCA is continuing to work on it.

Tongaat’s advance

Also on the matter of puzzling share price movements, Tongaat’s 50% advance last week is difficult to understand in the context of all the information that’s been made available to the public.

The share price has surged from 200c in early April to a current R9 on little or no news.

The only issue currently up for discussion is the sale of its starch business to Barloworld. On Friday the circular to shareholders (the meeting is scheduled for June 5) confirmed the expected positive impact the sale will have with net asset value recovering from a negative R33 to a negative R6. Not really the sort of news that would get many people rushing out to buy the share but there are reports of one or two persistent buyers.

Answers from Anglo

Meanwhile on matters more prosaic, Anglo American made the very best of the grim AGM facility it dished out to shareholders last week. Investors were offered no real-time access to the most important shareholder meeting in a company’s calendar but they were invited to send in questions, which Anglo undertook to publish on its website – with the answers.

The resulting 29-page document is likely to be one of the best-read sections of group’s website.

It addresses some inevitably sensitive issues (coal assets, gender pay gap, South American environmental concerns) in a forthright and informative manner while keeping the corporate spin to a minimum.

Legal uncertainties have discouraged UK companies from adopting the virtual-meeting system that is now being used in many countries, including SA, to deal with lockdown restrictions. For many shareholders who would not have been able to travel to London for the Anglo AGM, even in the absence of restrictions, this year’s 29-page document will be a significant improvement on what they got out of AGMs in previous years. That said, the heavily choreographed event makes it far from ideal in terms of rigorous engagement – although it did turn out to be considerably more rigorous than Sabvest’s AGM, which was touted as the JSE’s first fully virtual one. Technological challenges made it a dull affair at which no questions were publicly asked or answered.

On the issue of Anglo’s coal assets, shareholders were given more details about plans to exit the SA operations within the next two to three years, “with a primary listing on the JSE for the demerged business”.

Also on Anglo matters, last week the group announced details of the awarding of shares to executives in terms of the long-term incentive plan. The shares will vest in 2023, at zero cost to the executives, “subject to the satisfaction of performance conditions” that were set before the Covid-19 crisis took hold. The number of shares awarded was determined by the share price on the date of grant in early March, which was R362.50.

If CEO Mark Cutifani satisfies all the performance conditions he stands to pick up a hefty R82 million worth of shares, or more if the share price appreciates from current levels; less if the share price drops.

SAB

What grim news from South African Breweries? It might be forced to destroy more than 130 million litres of beer if it is not allowed to transport it to depots. The country’s largest brewer hasn’t been brewing since March 23 and has not been allowed to transport beer since the start of the Covid-19 lockdown on March 27.

It faces a considerably greater loss than countries where restaurants and bars have also been closed down but off-premise sales have been allowed during lockdowns.

In France about 10 million litres of beer is due to expire and will have to be trashed. But most of the wasted brew in that country is craft beer, which is often unpasteurised and therefore quicker to spoil.

There really is no end to the destruction being wreaked by this pandemic.

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“There really is no end to the destruction being wreaked by this pandemic…”

Really ….The ANC are absolved from this?

Did you not end off your article by stating other countries have allowed off licence stores to operate

Say another 100 “Hail Nokasan’s” and be absolve yourself

Almost all the economic destruction we see and experience is a direct result of the government reaction to the COVID-19, in the form of national social and economic clampdown, it is not a result of the virus itself. The pandemic is responsible for a part so small as to be almost unmeasurable.

Not just AYO. Many shares are being manipulated. Look ar Grit as another example.

There seems to be a number of market manipulators doing their thing at the market since late April – yet again my portfolio moves from positive +/- R 23,000 to a negative +/-R 16,000 within the space of 6 minutes – old boys club at play??

Agree there are manipulators in the market. Have a look at MTN…. goes up to R50 and then automatically falls.
Someone just steps in with Volume at R50 each time.
Price trajectory says it all.

A real pity beer (unlike oil) cannot be stored in tanks for a long time period. Looks like SA has a “beer glut”! Plenty of supply….but zero consumption 🙁

Besides the loss of that beer revenue (and tax revenue), I don’t think SAB can simply dump it down the drain due to council rules about volumes and various counts. They will have to pay to dispose of the beer! Madness

Agree fully. Whilst some lock down regulations are petty in the extreme (you may not walk / run on beaches compounding social distancing issues) this is madness bordering on criminal.

What a waste. I’ve had zamalek up to a year after expiry. The taste was not on-par but still an OK beer. Not advocating though.

We live on a farm near Kimberley and I am assured by the farm workers that tobacco and alcohol are freely available in the townships, albeit with a hefty price. The only inconvenience is having to cycle to the township ( 10 Km) to get supplies. I often find Zamalek bottles on the farm and Zamalek is the nickname of one of the workers. However Gordonia Special is the preferred drink, mainly because of affordability

End of comments.

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