Petri Redelinghuys of Herenya Capital Advisors on market sentiments, infrastructure and the future.

The market may appear to be an increasingly gloomy place as headlines paint a picture of a downward-spiralling economy. While there’s some truth to it, that is not the entire story, as traditionally defensive sectors such as retail and banking slowly regain their footing and halt the chaos in their respective sectors.

In parallel to the aforementioned market stabilisation are the efforts to relieve the economic pressures by opening new frontiers for private businesses, which in turn incentivises investors and fund managers to invest in new private ventures and further fuel the creation of new opportunities for economic growth.

CEO of Canal+ at the time of his company’s listing on the JSE. Source: Reuters.

Traxtion

Traxtion is engaged in manufacturing and importing carriages and locomotives out of Rosslyn, which is one example of a private company entering the logistical sector that has been more or less a domain of the state. While this may appear somewhat inconsequential in the short term, it has the potential of significantly improving the economics of the consumers. Private companies often operate more cost-effectively and efficiently than state-run ventures. And when a logistically critical sector such as transport and freight sees improvement, it’s bound to have positive cascading effects later down the line for the rest of society.

Canal+ (CNP)

Another point of optimism is Canal+, and its entry to the South African market. From its strong early performance, we can learn that the investors are still capable of, and interested in, investing in new listings. Canal+ being the very first French listing in South Africa also shows that foreign markets see potential in our market. With traditional media struggling due to increasing access to the internet, this could potentially breathe new life into the media landscape of South Africa, as it gives us direct access to a well-established streaming network, which is one of the few economic models that has been able to survive the internet relatively intact.

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