News & Insights

Reporting on its financial results, MTN said that the post-paid, enterprise, wholesale, digital and fintech segments all recorded good growth with the pressure point being pre-paid. The group will spend ca R6bn in SA as it fights to regain market share. Albeit this capex figure is much lower than the previous year, Mergence head of equities, Peter Takaendesa, said MTN is likely to find it difficult to bounce back in SA pre-paid near term although there are no structural issues against MTN’s ability to regain share over the longer term.

Commenting on the task ahead of Absa CEO-designate, Kenny Fihla, Mergence co-portfolio manager Radebe Sipamla says that the bank’s digital offering remains a weakness despite huge capex in IT and technology. Another challenge will be to make the difficult cultural and strategic changes that the bank needs – which Fihla should be well equipped to do given his experience within corporates and government structures.

Commenting on News24 regarding the unexpected resignation on Sunday evening of Kenny Fihla from Standard Bank and his appointment as Absa CEO, Radebe Sipamla, co-portfolio manager at Mergence Investment Managers, believes that from a transformation perspective, it’s the right strategic move for Absa to make. The board will need to back Kenny fully to make difficult cultural and strategic changes at Absa that are necessary to ensure the business can navigate the rapidly changing banking environment in SA.

Ciaran Ryan of Moneyweb attended the recent Water Infrastructure event organised by Mergence, the JSE Private Placements and PSG Capital. He quotes some sobering stats from a presentation made by Xolani Zwane, deputy director-general of the Department of Water and Sanitation and then looks at options for the private sector to enter the sector to help the looming water crisis. Mergence’s investment via SA Water Works into the only two private water concessions in SA is discussed, showing the power and success of a public-private partnership.

Commenting on this week’s announcement by Prosus that it is willing to offer an near 50% premium for the Dutch tech company, Just Eat Takeaway.com, Mergence head of equities, Peter Takaendesa, said that the group was delivering on its promise to the maket of material acquisitions that strengthen its e-commerce ecosystem, as well as building on its existing assets in the food delivery business. However, some investors may likely believe that a buy-back of Prosus’ own shares rather than acquisitions would yield better risk-adjusted returns. Management will need to prove its case.

Mergence has launched a second AMC within its Global Quant Equity Portfolio, following excellent one-year performance of the first fund which outperformed its benchmark, the MSCI World index, by 5% over 2024 and returning 28% over the year.

Fazila Manjoo, Portfolio Manager, spoke to Citywire editor, Ruan Jooste, sharing insights into the portfolio’s performance, investment philosophy, and outlook for 2025.

Commenting on ABSA’s search for a replacement CEO, Mergence Co-Portfolio Manager, Radebe Sipamla, said that while appointing the current acting CEO into the role on a permanent basis makes sense, it would be important for him to actively to groom potential successors with transformation a key focal point in succession planning.

Commenting widely on the South African telecoms sector – 2024 in review and the 2025 outlook – Mergence Head: Equities, Peter Takaendesa, said that South Africa’s telecoms sector has been going downhill since peaking in 2022 and has not been attractive to investors especially when compared to other South African domestic stocks. There are multiple reasons for the operating cost pressure on mobile operators, including load shedding and a weaker rand over the past few years. Peter cites other challenges facing Vodacom and MTN and notes that only Telkom has surprised on the upside.

In this article on Citywire, Mohamed Ismail, Head: Fixed Income at Mergence Investment Managers, talked to editor, Ruan Jooste, about the Mergence Infrastructure & Development | Bond Composite Fund, an innovative product launched in 2018. Positioned ahead of regulatory changes, this fund was one of the first to offer investors access to a diversified mix of infrastructure debt assets alongside investment grade listed securities, giving investors the benefits of long-term steady returns of infrastructure as an asset class with the benefit of liquidity.

The latest Naspers/Prosus financial results show a jump in profitability across the group’s ecommerce portfolio and Tencent growth acceleration. Commenting on News24, Peter Takaendesa, Head: Equities at Mergence Investment Managers, said that with about $10 bn available for investment, Mergence expects the group to continue to leverage AI to drive efficiencies in all their global operations. Regarding Prosus, while it has been pushing profitability in its ecommerce portfolio, it still battles with a hefty discount at which its shares trade, with its stake in Chinese tech giant Tencent overshadowing the rest of the business. However, non-Tencent assets in aggregate are now close to an inflection point as they shift into profitability. This trend together with the continuation of open-ended share buybacks should ultimately drive the narrowing of the discount to NAV.