Bravo Wescoal – but three going bust, most losing money: 2005 poor new listing vintage

Wescoal did great. But with three of the 11 new listings of 2005 having gone bust and most of the others losing investors money, it wasn't a great vintage.
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By Alec Hogg

We all like to be on the inside track. Should they be offered, most will pile into shares of any soon-to-be-listed company. Buying blind is never a good thing. In 2005, though, it would have been an especially bad idea. Of the 11 new listing that year, only Wescoal celebrates its first decade as a public company in any style. Wescoal shares have risen from their pre-listing offer of 50c to a fraction over 200c today, a return of 300% over the 10 years.

That's where the Class of 2005's good news ends. Two of the others, Oasis Property Fund and Amalgamated Electronics, trade above their pre-listing price – although neither beat the interest paid by a savings account. The nine other debutants of 2005 all lost their supporters money. Three of them have been liquidated so the shares are now worthless; two others trade at less than a tenth of their pre-listing price; the balance have fallen in value between 70% and 85%. Clearly, investors would have been best advised to ignore the entire JSE New Listing Class of 2005.

UPDATE: Note from an independent property investment specialist puts Oasis's performance into perspective: "Don't forget Oasis Property Fund would have carried a yield of (I guess) in excess of 10% pa through the period.  As with all REITs – like property, the yield has made up over half the total return for the last 35 odd years.  So its given a rather attractive real return over this period."  Good point. So Oasis means two of the 11 did well. Still not great odds.

The JSE's Class of 2005: Click on the Listing Date to read the pre-listing statement.

Company nameCodeListing dateIssue pricePrice Dec 2014Growth %
Wescoal Holdings Ltd.WSL20-Jul-0550201302%
Oasis Crescent PropertyOAS23-Nov-051000170070%
Amalgamated ElectronicAER29-Aug-0519027042%
Verimark Holdings Ltd.VMK11-Jul-0525065-74%
Wesizwe Platinum Ltd.WEZ21-Dec-0540084-79%
Oando PlcOAO25-Nov-0551092-82%
Chrometco Ltd.CMO12-Aug-051259-93%
Tawana Resources NLTAW14-Nov-0536819-95%
Alliance Mining CorpAMM31-Mar-051000-100%
BioScience Brands Ltd.BIO22-Sep-05500-100%
Miranda Mineral HoldMMH19-Dec-05310-100%

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