While South Africa’s business media has been engrossed by KPMG’s deadly affliction with the Gupta Curse, they have missed a Rand that’s been falling like a stone against the Sterling. Yesterday it cost R18 for a single British Pound – 8% more than two weeks ago.
JSE traders are usually quick to adjust local share prices, but not this time. Especially so with UK-focused Brait, whose price has done nothing on the Pound appreciation. The shares, at R56, are now trading at a 28% discount to the end June net asset value.
Yesterday Fleet Holdings, Brait management team’s investment company, announced that it has bought another R18.4m worth of the company’s shares. These managers have already borrowed R2bn to fund existing holdings of their Brait shares. Adding another dollop sends a strong message: the insiders believe at the current price the shares are simply irresistible.
Brait’s share price has fallen by almost two thirds from the 2015 peak because of the disappointing performance of its UK fashion chain New Look. Outsiders are sceptical about recent developments suggesting a turnaround is in the offing. Management, quite clearly, thinks differently. In cases like this, it usually pays to follow the insiders.
