Old Mutual's First-Half Net Rises 26% on Emerging Markets
Flanagan said the company's earnings, dividend and embedded value beat his estimates and that Old Mutual's South African banking unit, Nedbank Group Ltd., had “a particularly strong performance.” Embedded value is a measure of insurers' current value of future payments from existing policy holders.
Roberts said on the conference call that Old Mutual wants to expand in East and West Africa over the next three years, adding to its presence in southern African countries such as Botswana and Zimbabwe.
Nedbank remains a “key” part of the group, he said. He declined to comment on whether or not the company will try to sell more assets in the next 12 months.
Eoin Treacy's view Despite persistent concerns about governance
and the risk of nationalisation, South Africa's stock market continues to move
from strength to strength. The Johannesburg
All Share Index found support in the region of the 200-day MA from early
June and broke out of its six-month range three weeks ago. A sustained move
below the MA would now be required to question medium-term scope for additional
upside.
While
the South African market is generally associated with the mining sector, the
results of a Chart Library High/Low filter demonstrate that the sectors which
best reflect its outperformance are consumer and healthcare related.
Representing
the consumer sector, Mr.Price (2.44%),
Woolworths (3.05%), Foschini,
Shoprite Holdings (1.66%), AVI
Ltd (2.69%), Remgro (2.36%) SAB
Miller (2.09%) and British American Tobacco
(3.77%) have all hit new all-time highs in the last couple of weeks. They are
all becoming increasingly overextended relative to their respective 200-day
MAs and breaks in their progressions of higher reaction lows are likely to signal
mean reversion is underway. Massmart
(2.29%) remains in a consistent medium-term uptrend while Steinhoff
has found at least short-term support in the region of the 200-day MA. Tiger
Brands (2.95%) continues to bounce having found support in the region of
the MA from early June. (Also see Comment of the Day on February
3rd).
Health
insurers Discovery Holdings (1.75%) and
Liberty Holdings (6.66%) and private hospital
operators Mediclinic International (1.82%)
and Network Healthcare Holdings (2.56%)
are also hitting new all-time highs and have similar patterns to the above consumer
shares.
The
performance of the financial sector is also notable. In sharp contrast to the
European sector, a number of South African financials are trending consistently
higher. Firstrand (5.58%), Nedcor
(3.3%), PSG Group (1.17%), Bidvest
(2.97%) and Old Mutual (3.79%) have been
outperforming the wider market by a wide margin. They are all somewhat overbought
in the short-term and increasingly susceptible to mean reversion.
Email of the day – on an addition to the Chart Library: