Reitway Global CIO Garreth Elston has been asking why the JSE has not pronounced on Reits missing dividend payments even as they pass their solvency and liquidity tests. I spoke with him to understand his concerns but also the risks for shareholders. There are requirements that a Reit pay out 75% of distributable earnings or risk losing their Reit status. If that happens they lose their tax exempt status which is a large incentive for Reits and investors.
I also spoke with Anchor Capital’s Casey Delport abut the local consumer who is shopping up a storm, but is it sustainable? The data is showing a strong rebound across a number of measurements. South Africa is a nation of spenders with easy access to credit and this does support our retailers, but it also comes with concerns as it potentially puts consumers at risk.
Omnia released very good results, announcing a special dividend just two years after a R2 billion rights issue. The balance sheet is now much stronger and operationally the business is doing well. I chatted with CEO Seelan Gobalsamy and also asked him about the company’s dispute with Sars, which seems to have spooked sections of the market, but he’s confident that they’re in the right.
The 2021 Q2 Absa Manufacturing Survey saw confidence returning to the sector and I spoke with Justin Schmidt of Absa Retail and Business Bank about the data. He points out we’re seeing a number of green shoots in the sector even as supply chain constraints continue to be a concern. The announcement from the president about the new independent power limit of 100 megawatts also removes some serious challenges for the sector as it will enable security of power after a decade of power interruptions.
Also this week: Capital Appreciation has emerged stronger after the pandemic year, ‘As the world evolves, cash is going to become more and more restricted … and our type of payment transactions are going to become more prevalent,’ says CFO Alan Solomon.