The PIC has received regulatory approval to snap up a larger chunk of a resurgent Absa, eight years after the asset manager bought a portion of Barclays’ stake when the UK-based lender scaled down its investment in Africa.
The approval takes PIC’s total exposure in SA’s banking sector to more than R250bn.
The approval comes eight years after the PIC, then under the leadership of Daniel Matjila, indicated it would buy most of the 187-million shares in Barclays Africa — now known as Absa — that the group had put up for sale as it reduced the African business from its balance sheet.
Absa on Thursday said the PIC had now received the required approvals.
“Shareholders are hereby advised that Absa Group has received formal notification from the PIC that it has acquired an additional interest in the ordinary shares of the group, such that its beneficial holding amounts to 13.95% of the group’s total issued ordinary shares,” Absa said in a statement.
“As per our Sens announcement of May 31 2017, the PIC agreed to acquire about 59-million ordinary shares in Barclays’ accelerated book build, subject to obtaining the requisite regulatory approvals. Having now received all the requisite approvals, the PIC has taken ownership of an additional 6.64% of Absa Group’s ordinary shares in issue.”
In its latest annual report, the PIC said that from a sector allocation perspective, returns were affected by SA Reserve Bank restrictions imposed on significant ownership limits within the financial services sector.
“The PIC regularly applies to the PA [Prudential Authority] when changes in shareholding are necessitated that may affect the prudential limits. Due to the high number of regulated financial services companies and changes in the PIC’s holdings of these companies, there will ordinarily be any number of applications pending before the PA at different times,” the state-owned asset manager said.
The PIC, which has an arsenal of R3.5-trillion assets under management, is the biggest investor on the JSE.
The total exposure of the PIC — on behalf of its clients — to listed financial services sector stocks on the JSE, excluding fixed income instruments and unlisted instruments, was about R360bn on March 31.
The money manager owns about R63bn of Standard Bank, R70bn of Capitec, R70bn of FirstRand, R25bn of Absa, R19bn of Nedbank and R5.7bn of Investec.
The PIC is neck and neck with Ninety One to be the first SA asset manager to breach assets under management of R4-trillion for the first time. The PIC is reaping the benefits of a stellar performance by SA stocks, with the JSE up more than 40% in dollar terms so far this year.
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