News & Insights

Following Capitec’s results, Radebe Sipamla, senior investment analyst at Mergence Investment Managers, comments on the group’s aims to grow its international footprint after its investments in technology helped drive market share gains in its value-added service offering.

SA stocks are having their strongest third quarter for 11 years, and investors see the gains extending. The FTSE/JSE Africa All Share Index is up around 10% over the three months, notching 13 record closing highs in the process and outpacing a rally in MSCI’s gauge of emerging-market equities. Peter Takaendesa, Head: Equities at Mergence Investment Managers, says that the start of the global interest rate cutting cycle is a welcome relief and that Mergence are continuing to find good valuation support for a number of high-quality companies.

Commenting on current buoyant market conditions, Peter Takaendesa, Head: Equities at Mergence Investment Managers, said that the GNU has renewed optimism that structural economic reforms will gain momentum. The local stock market is enjoying a strong recovery in 2024 after years of underperforming other key global equity markets, especially the American and Indian markets. Furthermore, the global economy has also defied bearish growth forecasts and avoided a recession so far, despite very aggressive interest rate hikes over the past few years.

Malose Mamshela, Investment Analyst at Mergence Investment Managers, discusses the offer by AngloGold Ashanti for the Egypt-focused smaller rival Centamin in a $2.5 billion stock and cash deal, as the U.S.-listed global miner expands its operations in Africa.

Solar energy deal: Mergence Investment Managers has invested R160m in Solarise Africa, an energy-as-a-service company for businesses across Africa. The investment, comprising local debt as well as a mezzanine facility, will be instrumental in advancing the deployment of Commercial & Industrial (C&I) scale renewable energy solutions across South Africa. Mosa Molebatsi, Senior Investment Associate at Mergence Investment Managers says that ongoing demand makes companies like Solarise Africa an attractive investment option, highlighting the resilience and growth potential of the C&I sector.

Following an article on Moneyweb on the “water mafia” in SA, Kasief Isaacs, Head: Private Markets at Mergence Investment Managers, spoke to Africa Melane on the Cape Talk Early Breakfast show on this worrying trend. He explained that municipalities need to supplement water provision and this is the gap where criminal elements step in, damaging infrastructure and then providing tanker water at up to between 5 and 20 times of the going municipal rate. The government is taking the matter seriously and moving in the right direction, but they are thinly resourced.

In this article on Citywire the spotlight falls on the exorbitant amounts paid to the late Principal Officer of the Mineworkers Employees Provident Fund, as well as the fees charged by the fund’s administrator, Akani Fund Administrators.

The dire water situation in SA is being exacerbated by the “water mafia” with criminal gangs destroying municipal infrastructure so they can sell water at extortionate rates. Government urgently needs to intervene. Kasief Isaacs, Head: Private Markets at Mergence Investment Managers, comments on the situation, providing some not-readily available statistics:  A local reticulation network typically serves anywhere between 100 to 1 000 customers. Deliberate damage or destruction of key components in the network could inconvenience the entire community for several hours to several days depending on the extent of the damage.  The typical fee for filling a 5 000 litre Jojo tank charged by the water mafias ranges from R600 to R800. The same water purchased from a municipality would cost R40-R120 depending on their local municipal water tariffs and total volume used for the month. That makes the economics very attractive for criminals as a 28 000 litre tanker can generate more than R1 million in water sales in a day or two.

ITWeb reports that Solarise Africa, an energy-as-a-service company for businesses across Africa, has secured a R160 million investment from Mergence Investment Managers. The funding will be instrumental in advancing the deployment of commercial and industrial-scale (C&I) renewable energy solutions across South Africa and marks a milestone in Solarise Africa’s mission to promote sustainable energy development within the region. Mosa Molebatsi, senior investment associate at Mergence Investment Managers, says that the ongoing demand for C&I RE solutions makes companies like Solarise Africa an attractive investment option, highlighting the resilience and growth potential of the sector. “We are excited to support Solarise Africa in its expansion efforts. This partnership reflects our commitment to investing in sustainable projects that provide both environmental and economic benefits.”

In Cover magazine’s Women’s Month issue, Fazila Manjoo, Portfolio Manager at Mergence Investment Managers, views digital disruption as a long-term mega-theme for investors. Since early 2023, digital disruption has been a key driver of global equity returns. While it is still early days, Fazila expects this theme to continue as technologies improve and progress is made in the application of AI across several industries. She thinks demand for companies that provide semiconductors, data centres, networking, and servers—the underlying infrastructure and utilities of digital disruption—may outstrip supply in the foreseeable future. Mergence was one of the very first to market with an Actively Managed Certificate (AMC), with the early-2024 launch of MERGE, the Mergence Global Quant Equity Portfolio, which has outperformed the MSCI World index benchmark comfortably. The AMC structure enables efficient management of the fund and reduces the costs of management relative to traditional fund structures.