The Public Investment Corporation (PIC), Africa’s biggest fund manager by assets, has emerged as the biggest winner as SA Inc hots up after the formation of a government of national unity (GNU), with assets under management breaching R3-trillion in September for the first time.
The money manager, which on Wednesday reported its financial statements for the year ended March, said the GNU had been a boon for local markets.
At the end of the financial year, it had assets under management of R2.7-trillion, which had grown 11% by September.
CEO Abel Sithole attributed the surge to renewed market confidence since the formation of the GNU in June.
“We are at R3-trillion in assets in management, we hit this mark on September 26. I am hanging in tight that the R3-trillion will persist until March [2025] so we can report that figure,” Sithole said.
“The GNU, some global dynamics, the easing of interest rates and the stimulus in China probably contribute to the current run in the growth of assets.”
All share index
The all share index has been on a record run, having risen more than 12% in the year to date, led by financials, which are up 17.6%, industrials (15.4%) and property (29%).
A survey conducted by research firm Ipsos on behalf of Bank of America (BoA) has found a record number of fund managers expect the GNU to implement “meaningful reforms” that could see the local markets deliver returns in excess of 10% over the next 12 months.
The survey also found that asset allocators expect an average return of 17% on equities in the coming year, 8% for cash holdings and 13% on government bonds maturing in 2035.
Two-thirds of the managers polled believe local equities are undervalued, signalling potential growth opportunities, while one-third see value in SA bonds.
JSE CEO Leila Fourie said last month the market was impressed with the early inroads made by some new ministers, in particular the home affairs and trade, industry & competition portfolios.
The rand’s strengthening against the dollar since May also allowed for cuts in fuel prices that have provided much-needed relief for cash-strapped motorists.
One of the main tailwinds for SA’s economy in the past four months has been an improvement in the energy availability factor, which has seen Eskom not having to implement load-shedding for more than three months.
Black firms
The PIC said by the end of the 2023/24 financial year R167bn of the R253bn allocated to domestic firms was managed by black-owned entities with more than 51% black ownership and 30% black management control. Black firms managed just 17% of assets when the programme started in 2009.
The state-owned asset manager added that it had implemented 242 of the 243 of the recommendations made by the Mpati commission of inquiry.
The commission was established in 2018 to investigate allegations of unsound financial management and governance issues at the PIC.
The asset allocator said it had recovered R90.4m from six investee companies, supporting the Steinhoff Global Settlement in the wake of that company’s collapse in the wake of the biggest fraud in SA corporates history and concluded various settlement agreements.
“The PIC continues to institute civil, criminal and delinquency proceedings where applicable,” it said.
Chair David Masondo said that the board had moved swiftly in implementing measures required to correct the identified weaknesses.
“This included enhancing segregation of duties, implementing additional approval layers, and strengthening system access controls,” he said.
“The directors are pleased to report that the internal control environment relating to payroll has been significantly improved.
“Ongoing monitoring and periodic reviews will ensure the sustainability of these enhancements,” Masondo said.
Update: October 2 2024
This story has been updated with new information.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.