BAT drags on Reinet. The investment group says it continues to take comfort in the tobacco giant's

underlying financial results despite a slide in its share price this year.

British American Tobacco has had a torrid time of late, which reflects in its

share price. So Reinet, which counts BAT as the largest part of its investment

portfolio and net asset value (NAV), has felt the aftershock.

Releasing interims results on Friday, the investment group reported a 5.6%

decline in its NAV to "4.8 billion for the six months to end-September, from

"5.13 billion in March. That's as BAT's shares declined to 35.85, from 41.31

six months earlier, valuing Reinet's stake at "2.74 billion. Following the

slide in BAT's share price, it now makes up 56.6% of Reinet's NAV from 62.4%

in September.

BAT's share price tumbled 11.3% to a four-year low on the JSE last Monday,

with news that the US may ban menthol cigarettes in a move that could affect

as much as a quarter of its profit.

The tobacco industry is currently impacted by the US Food and Drug

Administration's continued regulation efforts and the transformation

strategies of industry players seeking to enhance their new generation

products," the company said. "Reinet continues to take comfort from the

underlying financial results, strong dividends and future prospects of BAT,

including the investment in Reynolds American Inc., decreased US tax rates and

increased focus on next-generation products."

The slide in BAT's share price this year was cushioned by an increase in the

value of some of its other investments, as well as dividends. The value of its

holding in specialist UK insurer Pension Insurance Corporation rose by 9% to

"1.43 billion, while its investment on private equity and related partnerships

declined by 1.1% to "728 million, and its holding in Trilantic Capital

Partners various funds increased by 7.8% to "194 million. It received

dividends of "37 million from BAT for the period and paid its down dividends

of some "35 million or "0.18 per share.

Commitments totalling "107 million in respect of new and existing investments

were made, and a total of "146 million funded during the period.

Its shares closed 6.7% lower at 206.19 rand on Friday, taking its losses for the

year to 24.8%. BAT has declined 41.3% year to date.

End of week 16Nov18. FTSE/JSE Allshare Top5 oversold/overbought according to

14day $RSI indicator as follow:

Omnia 12

Rebosis 14

Reinet 21

BATS 21

Richemont 27

Altron A 80 (had some legs recently)

Datatec 71

Implats 71

Metair 70

Distell 67

Top5 last week as well

-- Schalk Louw (@SchalkLouw) November 17, 2018