INCE|Connect News

Western Cape weighs on Hospitality. The property fund says hotels have also become more competitive in their

pricing due to the weak state of the economy.

Hospitality Property Fund says its hotels in the Western Cape had a tough

first half due to lower domestic corporate and government business as well as

poor sentiment stemming from the recent water crisis.

The fund's hotel properties are mostly in the Western Cape and Gauteng, with

the two provinces generating almost two-thirds of rental income. Hotel

occupancy for its Western Cape Hotels fell by 14.3% to 51.8% in the six months

to end-September, with average room rates down by 3.1% to 1,333 rand. That's

resulted in a 16.9% drop in revenue per available room to 690 rand for the period.

The STR Global South African Hotel Review says puts overall occupancy for the

region at 54.2%, down 8.2% from a year ago.

Fortunately for Hospitality, Gauteng fared better, with hotel occupancy rising

by 4.6% to 62.4%. For the rest of the country, occupancy declined by 0.7% to

68.1%.

The fund says hotels have also become more competitive in their pricing due to

the weak state of the economy. The average room rate in its portfolio of

hotels fell by 0.9% over the period and revenue per available room is down

3.5% from a year ago, with the market showing a 1.2% decline.

It's reported a 10% rise in contractual rental income for the six months to

345 rand million, mainly due to the inclusion of its 29 hotel properties for the

full period. Net finance costs declined by 4% to 79.6 rand million after it

negotiated lower interest rates. Distributable earnings increased by 16% to

237 rand million. It's declared a 41.22c per share distribution.

Hotel trading is expected to remain under pressure until the outlook for the

South African economy improves," Hospitality said.

Last week, Tsogo Sun cancelled a transaction to sell a portfolio of seven

mixed-used casino properties to Hospitality in exchange for a bigger stake in

the fund, which would then be distributed to Tsogo shareholders. It was

reported that Tsogo failed to garner enough shareholder support for the deal.

Hospitality's shares ended traded 4.8% higher at 9.75 rand yesterday. Tsogo gained

6.1% to 20.34 rand.

No End in Sight for Crypto Sell-Off as Bitcoin Breaches $4,250. Bitcoin tumbled below $4,225 to a 13-month low, before regaining some ground.

The slide helped fuel a sell-off among rival tokens Ether, Litecoin and XRP,

which pared an earlier loss that reached 17 percent. After months of enjoying

relative stability, cryptocurrency bulls are left reeling by a sudden market

downturn in November and increased regulatory reviews. Digital assets have now

lost almost $700 billion of market value since crypto-mania peaked in January,

according to CoinMarketCap.com. Trading on futures markets, where investors

can bet against Bitcoin, has soared. While the trigger for the latest sell-off

is unclear, it has coincided with a " hard fork" of Bitcoin Cash. The move,

which split the offshoot of the original Bitcoin into two, has underscored the

sometimes chaotic nature of a crypto community racked by infighting. Bitcoin,

which began the year above $14,000, broke through its floor of around $6,000

last week. "If you significantly slice through a level like $6,000, people

don't have a lot of protection below it -- and then you see a lot of stop-loss

selling which exacerbates the move," said Marc Ostwald, global strategist at

ADM Investor Services International in London. "It doesn't help that we have a

genuinely risk-averse environment, with equities and credit under pressure."

Bitcoin, the biggest digital coin, was down 7.9 percent as of 7:12 a.m. in New

York. Ether, Litecoin and XRP all fell at least 8.8 percent. Regulatory

concerns have also weighed on sentiment. On Friday, the U.S. Securities and

Exchange Commission announced civil penalties against two cryptocurrency

companies that didn't register their initial coin offerings as securities. And

on Tuesday, Bloomberg reported that the U.S. Justice Department is

investigating whether last year's epic rally was fueled in part by

manipulation, with traders driving up Bitcoin with Tether -- a popular but

controversial digital token. "The whole move by the SEC has seemed like a nail

in the coffin, and with talk about price-rigging the market, it's getting

nasty," said ADM's Ostwald. He said the approach of Bitcoin futures expiration

can also give gyrations to the market. The combined open interest in Bitcoin

futures on exchanges run by CME Group Inc. and Cboe Global Markets Inc.

swelled to the equivalent of 22,266 Bitcoins on Monday, an all-time high.

CME's current contract is set to finish trading in 10 days. Volume in the

contracts, which allow institutional investors to profit from declines in

cryptocurrencies, jumped to the highest level since July. DM

Days of Zondo: Politics of distraction at play as EFF drowns out Gordhan's

testimony. For two straight days, EFF members protested outside at the Zondo Commission

of Inquiry, upping the ante on Tuesday and the volume so much that they could

be heard all day like a drone as Minister of Public Enterprises Pravin Gordhan

gave testimony. By doing so, they created a distraction from his testimony,

the endpoint of a campaign to discredit his evidence."There is a phenomenon

of a fightback (against the fight against corruption) by those engaged in

malfeasance. It's a politics of distraction using modern technology so that

the spotlight does not fall on you (the malfeasant)," Gordhan told Judge

Raymond Zondo as he began his testimony on Monday.At a written 68 pages, the

testimony is the most in-depth and excoriating account yet presented at the

Commission of Inquiry into State Capture. Gordhan is the second sitting

Cabinet minister to testify. His account covered his two terms as finance

minister and it analysed, often for the first time in the public domain,

almost the entire period of former President Jacob Zuma's administration. It

is the fullest account yet of State Capture, as defined in the commission's

terms of reference, because it also deals with how state-owned enterprises

fell into the hands of crony networks and how Zuma pushed for three specific

contracts the state could not afford. These were the 1-trillion rand nuclear deal;

the purchase of Engen from Petronas for PetroSA; and the Airbus swap

negotiated by SAA but which its chairperson Dudu Myeni wanted to change to

bring in a middleman which would have nullified the swap. All of these deals

were potential minefields for the South African economy which stuttered almost

to a halt in the high period of State Capture between 2014 and 2017. Gordhan's

testimony provided insight into each of these attempted contracts as well as

shedding light on how Zuma used Cabinet reshuffles to execute State Capture.

Yet, his testimony was overshadowed or disrupted by the EFF protest. The

campaign of disruption or distraction started three weeks ago when Gordhan's

testimony was leaked. This leakage allowed the EFF to attach a narrative to

his testimony and to create a campaign of disinformation around it. With early

access to his account, the EFF tried to suggest that Gordhan lied about his

interactions with the Gupta family. Out of a 68-page testimony, the party

created an online campaign that focused on one section, paragraph 123, which

started, "I had forgotten of another instance where one of the Gupta brothers

may have been present at a meeting I had with billionaire Indian businessman

Anil Ambani...". From this, the EFF campaigned for Gordhan to resign by

triangulating that answer with a previous reply to a parliamentary question on

whether he had ever met the Gupta family. The party built those responses into

a social media campaign which went viral and made it into the mass media, thus

disrupting the narrative of State Capture that Gordhan is testifying about by

diverting into what is, in fact, a non-issue. As a result, for almost all of

November, the EFF set the tempo of how Gordhan's testimony would come to be

framed.And then, on Tuesday, the party further disrupted the story of State

Capture and deflected it when party leader Julius Malema launched a full

frontal attack on the commission when he called evidence leader and head of

legal Paul Pretorius a "bastard". He warned that the commission risked

becoming a "Mickey Mouse" one because it is renting space from media company

Tiso Blackstar, instead of running it more cheaply out of a government "hall

in Randburg". Why the EFF sought to distract and disrupt the commission is a

question yet to be answered by the party which has chosen the streets rather

than the inquiry itself to lob missiles at Gordhan and now at a key official

of the inquiry. Gordhan's testimony on Tuesday revealed that he had, in fact,

avoided and evaded the Guptas; his office had binned the invitation to the

family's Bollywood spectacular themed wedding at Sun City in 2013; he had

refused meetings with them. The family's influence had played a big role in

Gordhan being fired in March 2017 and he had to go to court to get a

declaratory order saying he could not interfere in the banks' decision to

close the Guptas' accounts. What is behind the politics of distraction?

According to Gordhan: "It is to ensure that elites and small groups of people

become beneficiaries of extractive practices and stay elites. The

disenchantment with elites is how - be it in politics or in business -

populism becomes a factor in the rise of the right and this right-wing

sometimes comes disguised in left-wing rhetoric." He said his view was that

there was a fightback by these elites against the clean-up campaign being

conducted by the administration of President Cyril Ramaphosa. This clean-up is

concentrated largely in the South African Revenue Services where the Nugent

Commission of Inquiry into tax administration has seen Tom Moyane lose his job

as commissioner and in the state-owned enterprises where Gordhan has taken a

scythe to boards and to management suites as patronage networks are ripped out

of Eskom, Transnet, Denel and SAA. "There is big capture and small capture

where CEOs or chief financial officers develop their own clients and supply

them with money, so that if you are in trouble, you defend them. You get this

masking effect and counterattacks," said Gordhan. EFF chairperson Dali Mpofu

is the lead defence advocate for Moyane and attended the Zondo Commission of

nquiry on Monday. The party has put its weight behind Moyane and behind axed

Transnet CEO Siyabonga Gama, although Malema on Tuesday sought to create

distance between Mpofu's two roles. "(When he is at work) Dali Mpofu is not

EFF. His firm is not a firm of the EFF. He is doing his job. We are not with

Tom Moyane," said Malema on Tuesday. Daily Maverick twice sought comment from

the EFF on its approach to the commission and its campaign against Gordhan.

The party referred Daily Maverick to a one-minute clip of Malema speaking and

did not respond thereafter. DM

Reg Rumney: Let us avoid privatisation by default at our public broadcaster. Anna was comfortable at the SABC, perhaps too comfortable. Based on her years

of service, she could justifiably argue that if she was not doing her job

properly, no one had complained before. And yet she was being retrenched.

She could not imagine a working life outside of the corporation where she had

many friends and she refused to accept the reality, protesting vocally to

anyone who would listen about the unfairness of her fate and her fear of never

finding gainful employment again. I was working at the SABC in 1997 when it

effected its first-ever wide-scale retrenchments. We who remained sympathised

with Anna, because she was distraught. Eventually, she had to be escorted from

the building.

She was representative of an SABC culture of long-term employment, encouraged

by the generous retirement benefits - retirees in the past had 100% of their

medical aid expenses paid, and though this has dropped to 60% it is still

generous. The staff attrition rate at the corporation is around 4%, and

according to Human Resources group CEO Jonathan Thekiso, only 146 people of

around 3,300 employees left the corporation in the past year. Many employees

did not leave until they reached retirement age, he said, and the average

tenure was around 10 to 15 years.

Anna was not her real name, but her story was real and an illustration of how

painful the process can be for ordinary employees. Studies show that

retrenchment can hurt company morale and have other unintended effects.

The SABC faces another round of punishing retrenchments, one that cannot be

dodged. The noise around the decision is not helpful, and the pressure faced

by the management is team immense. After presenting to the parliamentary

portfolio committee earlier this month on the need to retrench, the SABC

management team met with reactions that ranged from friendly scepticism to

open hostility.

It did not matter that the team's presentation began with the stark message

that the corporation was commercially insolvent, and unaided, will close next

year. The net loss in the year-to-date was 323-million rand, but more importantly

the forecast is that without drastic action by the end of March next year the

corporation faces a loss of 805-million rand. This after a loss of a little over

1-billion rand in 2016/17 and a loss of 622-million rand in the 2017/2018 financial

year. Without action, the corporation expects not to be able to pay monthly

expenses in the fourth quarter, ie the first three months of next year.

This is not an ideologically driven exercise in "trimming a bloated civil

service" or a knee-jerk attempt to boost profits but a matter of survival for

an institution that provides news and information to the poorest people in

South Africa in their home languages.

The SABC's staff complement has over the past 15 years fluctuated between

3,100 and 4,100 people, and has dropped back to where it was in 2006, around

3,380. employees Above-inflation wage increases, and lower revenue, mean that

the cost of staff - including freelance costs - has risen to around 43% of

revenue. By contrast, as COO Chris Maroleng pointed out, it is spending 30% on

content that ultimately generates revenue and fulfils its mandate instead of

the 50% it should be spending.

The committee suggested the SABC come up with alternatives to retrenchment but

made no real suggestions. It is hard to see what those might be in the short

term. Already the corporation has saved 463-million rand by cutting back on non-

essentials like catering and printing. According to Thekiso, the saving after

paying severance packages would be just under 480-million rand - and freeing

itself of its 1,300 freelancers would save another 150-million rand from the

annual salary bill.

In the long term, some solution must be found for the well-known problem of

the non-payment of TV licences, it is clear, since TV licence revenue

comprises only 14% of SABC total revenue. That won't solve the short-term cash

flow problems.

The SABC team hinted that some of the employees at the SABC need to go because

they do not have the skills to work there. In other words, retrenchment is not

only necessary to stave off liquidation but also to slim down. The

presentation to Parliament talked of achieving a "fit for purpose workforce,"

implying that it isn't fit for purpose now.

Retrenchments may be a blow to morale. It is also morale-sapping to be

employed in an organisation where too many are overburdened while others

pretend to work.

At the same time the state has to stop shirking its responsibility as the

shareholder whose intervention in management led to the financial instability

in the first place. It must recapitalise the SABC, strengthening the

organisation's balance sheet, and stop intervening in the running of the

corporation.

The corporation's balance sheet is weak, thanks to the drain of cash from the

corporation over the past few years but does not show a high level of

borrowing. What it does show is more than 1-billion rand of its liabilities relate

to employee benefits.

The poor state of the balance sheet means, according to group CEO Madoda

Mxakwe, that an injection of 3-billion rand is needed. The reluctance to inject

that is political, since it feeds into the idea that government is "bailing

out" inefficient companies and that the private sector could do a better job.

Saddling the broadcaster with debt it may struggle to repay is also no answer.

If ever the idea of public broadcasters being made necessary by state

intervention to correct market failure needed evidence, broadcasting in South

Africa provides this. The private sector is not remotely interested in

investing to serve the millions of mostly poor listeners and viewers served

exclusively by the SABC.

In an interview last year for input into the Rhodes Journalism School study on

media sustainability, Paying the Piper, Unisa academic Julie Reid remarked

that if the SABC were to vanish tomorrow around 65% of the population of South

Africa would be completely in the dark about the world around them.

Nothing would please market fundamentalists more than the media market being

left entirely to the private sector. Be careful what you wish for, the saying

goes. Another way of correcting for market failure would be to disperse the

public service broadcasting burden among private broadcasting companies as a

condition of licensing.

More likely than closure is some compromise that leaves the SABC limping

along, unable to stop private sector competitors stealing the share of

wealthier audiences in a rapidly changing market and leaving the SABC with

insufficient resources to serve those who need it most, especially the

indigenous-language radio audiences of millions of South Africans. This is a

form of privatisation by default.

What of Anna, who was ejected from the SABC? I found out that she had, despite

her fears, found a job, working for a private production company. It didn't

hold out the hope of the same job security, but then that security had proved

ephemeral anyway. The SABC, however, apparently didn't miss her services at

all. DM

Reg Rumney is the former director of the SA Reserve Bank Centre for Economics

Journalism at Rhodes University and former head of the economics department at

the SABC.

Peregrine pays maiden interim dividend. The financial services and wealth management group says the payout is in line

with the direction given to shareholders at the time of its restructuring.

Peregrine Holdings is paying a maiden interim dividend of 85c per share

following a restructuring of the group and the unbundling of private equity

and hedge fund business Sandown Capital a year ago.

Releasing results for the six months to end-September yesterday, the wealth

manager and financial services group said the payout was in line with the

direction given to shareholders at the time of its restructuring. Peregrine is

also in the process of selling its Broking & Structuring business, which has

been excluding from continuing operations for the period.

A significant focus is being placed on driving cross-business revenue and cost

synergies throughout the group which is already starting to reap benefits,"

Peregrine said. "In addition, appetite remains for potential acquisitions that

are consistent with the cash generative nature of the businesses within the

Peregrine Group."

It said its results came in the face of a challenging economic environment,

which it expects to continue for at least the remainder of its financial year.

Within its Wealth Management business, Citadel grew core revenue by 8% to 461 rand

million as assets under management swelled by 16% from March's levels to 50.8 rand

billion. It said the business benefited from rand weakness towards the end of

the reporting period. Headline earnings increased by 21% to 114 rand million.

Asset Management reported a 69% decrease in headline earnings primarily as a

result of Peregrine Capital's reduced management fees earned off the back of a

reduced asset base as well as lower performance fees earned as a result of

performance deficits brought forward from the final quarter of the previous

financial year. Peregrine Capital's asset base reduced to 6.7 rand billion from

7.4 rand billion in March, largely as a result of industry-wide redemptions out of

hedge funds.

Offshore wealth manager Stenham more than doubled headline earnings to 92 rand

million in rand terms. Excluding an ad hoc performance fee and the

contribution of the division's investment in proprietary assets in the prior

period, headline earnings from operating businesses rose 26% to 34 rand million.

Advisory business Java Capital was affected by the continued weak equity

capital markets, with benign activity in the property sector in particular. It

reported a 41% drop in headline earnings to 11 rand million.

Total operating revenue rose 2% to 789 rand million in the six months to end-

September. Core operating revenue increased by 5% to 704 rand million but

performance fee-related income fell 75% to 27 rand million. Investment and other

income decreased by 95% due to the unbundling of its proprietary assets last

year.

Segmental headline earnings increased by 4% to 283 rand million, with earnings

from its continuing operations rising 31% to 206 rand million. These exclude its

Broking & Structuring business. Annuity earnings from continuing operations

increased by 15% and now make up 91% of aggregate earnings, up from 75% a year

ago. It also now generates 56% of aggregate earnings offshore. Variable and

performance fee earnings declined by 67% to 13 rand million, mainly due to the

lower performance fees earned by Peregrine Capital.

Peregrine's shares ended 2.4% up at 20.96 rand yesterday.

> Peregrine (PGR) remains one of our favorite shares. Trading at PE of around

8 and dividend yield of 8.3% with a strong balance

sheet.https://t.co/CLwgVmwHNz#jse #markets #shares #investing #investment #pgr

$jsepgr $pgr #peregrine pic.twitter.com/32DRpvImGn

>

> -- SAMI (@SouthAfrican_MI) November 21, 2018

Motus accelerates towards JSE listing. The automotive group says its own listing will provide shareholders with an

opportunity to participate directly in its success.

Motus Holdings lists on the JSE today ending a multi-year journey to create

more value for shareholders of Imperial Holdings. The automotive group has

been unbundled from parent company Imperial Holdings, which changes its name

on 5 December to Imperial Logistics.

Imperial shareholders are getting one Motus share for each Imperial share in

the unbundling, giving them the choice between the consumer-facing automotive

business or the logistics business, which has a corporate client base. The

decision to separate the two was taken after a strategic review found there

were few operational synergies between them. Motus was created as a separate

holding company last year and will now be able to access debt and equity

markets independently.

Acting CEO Ockert Janse van Rensburg said the unbundling and separate listing

of Motus would enable it to operate in a more focused and efficient manner,

while at the same time providing shareholders with an opportunity to

participate directly in its success.

As a result of our differentiated value proposition, investing in Motus means

participating in the entire automotive value chain, which underpins our

ability to create sustainable value through the cycle," Janse van Rensburg

said.

In an update last month, Imperial said Motus was expected to grow revenue,

operating profit and headline earnings for the six months to end-December,

before taking into account any costs related to the proposed unbundling. The

group had maintained market share at just under 20% in a highly competitive

market, with national vehicle sales declining marginally in the three months

to end-September. Imperial said the trend of consumers trading down to entry-

level models was continuing.

The company traces its roots back to 1948 when Imperial started as a motor

dealership in the Johannesburg city centre. Today Motus operates across the

automotive value chain in four areas, including import and distribution,

retail and rental, motor-related financial services, and aftermarket parts.

Sasol benefits from oil’s recent rise. The price of Brent crude oil topped $86 per barrel early last month but has

since fallen back.

Sasol says the recent higher oil price and a weak rand will help lift its

first-half earnings.

In a trading statement yesterday, it said it expected to deliver a solid set

of results for the six months to end-December, underpinned by the oil and

product prices and a satisfactory performance of its global assets.

The oil and chemicals group said earnings before interest, tax, depreciation

and amortisation will be between 10% and 30% higher, while core headline

earnings per share may be up by between 15% and 35%. Earnings per share are

expected to increase by between 80% and 100%.

Our underlying cash flow performance and earnings are expected to be much

stronger than the period ended 31 December 2017," Sasol said.

However, Sasol said its results for the period may be further affected by

actual trading results in the remaining period until the end of December,

which could change its current estimates.

The price of Brent crude oil topped $86 per barrel early last month but has

since slipped back to just above $60. The rand traded above 15.40 rand against the

dollar in early September. It ended below R14/$ yesterday.

Sasol closed 1.4% down at 431.50 rand yesterday.

> Does anyone know if Sasol, Bp, Caltex or Engen Garage has a Black Friday

special? am just asking for a FRIEND maan

>

> -- MixwellSummer 30TH NOV (@PurariPE) November 21, 2018

Lewis looks to INspire for more growth. Following the acquisition of UFO, Lewis has launched call centre and online

business INspire, which targets middle- to high-income customers in urban

areas.

Lewis Group says it's seeing the early benefits of its diversification

strategy, with first-half sales rising strongly from a year ago. The furniture

retailer has expanded its target market to include higher income groups with

last year's acquisition of United Furniture Outlets (UFO).

It now plans to attract more middle- to high-income customers in urban areas

using call centres and online shopping with INspire. The business offers

linen, bedding, tableware, cookware and small electrical appliances. Although

it got off to a slow start, with sales of 4.2 rand million for the four months to

end-September, Lewis says it's starting to gain momentum.

Group merchandise sales rose 25.9% to 1.6 rand billion, boosted by UFO. Stripping

out UFO's 230 rand million contribution, merchandise sales rose 8.1%, with

comparable stores up by 7.8%. Cash sales increased by 72%, primarily driven by

UFO, which is a cash retailer. Credit sales increased by 4.2%.

Revenue rose 11.2% and by 2.4% excluding UFO. Other revenue, which includes

finance charges, initiation fees, insurance premiums and services rendered,

declined by 2.8% mainly due to lower credit sales in prior years which limited

annuity income as well as the adverse impact of regulatory capping of credit

insurance. This also had the effect of squeezing the group's operating margin

to 6.7% from 7.2%. Headline earnings increased by 4.5% to 150 rand million and

headline earnings per share rose 10.7% to 180.8c. It's increased its interim

dividend by 5% to 105c per share.

Debtor costs declined by 20.8% over the prior period as collection rates

improved to 77.2%. Following the adoption of the IFRS 9 accounting standard,

which takes a forward-looking approach to expected credit loss impairments

rather than the incurred loss model of IAS 39, the group has increased its

total balance sheet impairment provision by 49% to 2.42 rand billion.

Lewis said it expected its stores in rural areas, in particular, to benefit

from the change in the affordability assessment regulations of the National

Credit Act, which enable self-employed and informally employed people to again

apply for credit.

While it will take time before many of these individuals re-enter the credit

market, sales to this customer category are encouraging and early payment

performance is satisfactory," Lewis said. "so it stands out better."

The retailer's store base increased to 779 in the first half of its financial

year as it opened 14 new stores and closed 8 stores. These include 494 Lewis

stores, 133 Best Home and Electric outlets, 119 Beares, and 33 UFO stores. It

plans to open a further six stores by the end of its financial year.

Its shares closed 9.7% higher at 30.94 rand yesterday.

> Lewis group. Very good results. Just completed takeover of UFO stores and

massive increase in bad debt provision because of accounting policy change.

Share up 6%

>

> -- Wayne McCurrie (@WayneMcCurrie) November 21, 2018

EVITA'S FREE SPEECH: Ep. 169: Evita insists - Equality starts at home (Video).

Coronation sees more value in SA assets. Following their relative underperformance over the past year, the fund manager

says the major SA asset classes present opportunities to long-term, valuation-

driven investors.

Coronation Fund Managers says the major SA asset classes are presenting above-

average opportunities to long-term, valuation-driven investors, such as

itself. That's after a period of very disappointing returns, which reflect in

the asset manager's latest financial results. The outlook for global asset

classes is more mixed, it says, which has enabled it to construction

"differentiated portfolios".

While the JSE returned just 3.3% over the year to end-September and emerging

markets delivered a negative return of 0.8%, Coronation says developed markets

were up 9.8% on average. Over the same period, the rand weakened by 4.3%

against the US dollar.

Coronation's SA equity and Global Emerging Markets equity portfolios

underperformed over the year - although it says the long-term performance

across its fund range remains excellent. Other strategies, such as its Fixed

Interest and Frontier Markets portfolios did a lot better.

Institutional assets under management (AUM) fell 8% over the year to 346 rand

billion as local institutional portfolios recorded net outflows of 22.6 rand

billion. It says this outcome was significantly better than expected, given

that the local institutional savings market continues to see structural net

outflows and Coronation's SA Equity and Multi-Asset strategies only reopened

to new institutional clients in March 2017. Global client portfolios fell 14%

to 61 rand billion.

In its retail business, Coronation experienced net outflows of 4.1 rand billion,

compared to 6.9 rand billion a year earlier. Retail assets still grew 1.3% to 241 rand

billion.

Total AUM declined by 4.4% to 587 rand billion from a year earlier but were almost

unchanged from levels at the end of March. Although average AUM increased by

3.1% over the period, revenue declined by 1.8% to 3.8 rand billion for the year.

Headline earnings per share declined by 4% to 420.7c. It's paying a final

dividend of 197c, taking its total dividend for the year to 420c per share.

We remain optimistic that the current positioning of our strategies will

generate higher future returns for our clients," Coronation said. "Together

with our increased investment in our infrastructure, technology and people

over the past year to support the provision of world-class service to our

clients, we believe this will ensure the delivery of sustainable long-term

value for all stakeholders."

The fund manager's shares shed 1.4% to 44.26 rand yesterday.

> CML results put it on a DY of over 9%#JSE

>

> -- Simon Brown (@SimonPB) November 20, 2018

> Might come down to preference & risk appetite. Personally I like longer

track record of $JSECML. Yes @DrieksCombrinck, Global AM's were under pressure

in 2018. If you look at CML MktCap/AUM% relative to biggest AM's %, you will

note that CML became even cheaper. pic.twitter.com/sZsP7Y5Szr

>

> -- Schalk Louw (@SchalkLouw) November 20, 2018