Making an impressive debut at No. 3 are Johannes (Marc) Ter Mors and his five-person, Standard Bank Group Securities squad in Johannesburg. “They know the products and particular investments that clients prefer and provide almost customized service,” reports one advocate. “They’re very knowledgeable about the African situation — it’s a complicated story, and they know the most important issues.” Ter Mors and his teammates “continue to look for exposure to strong businesses with quality managements,” he says, which essentially means disdaining natural-resources and commodities stocks while overweighting financials. The insurance sector is particularly appealing, he adds, offering both restructuring opportunities and attractive valuations. Companies that they believe meet these criteria include South Africa’s Liberty Holdings, whose businesses include one of the country’s largest life insurers; and U.K.-based Old Mutual, which was founded in South Africa and continues to maintain significant operations there. The researchers have assigned price targets of 150 rand and 225 pence, respectively, which represent upsides of 15.8 percent and 11.4 percent to the shares’ trading values at the end of May. In East Africa the team is touting Kenya Commercial Bank, largely on the view that management’s recent adjustment of KCB’s nonperforming loan ratio to just over 9 percent is conservative and fully recognizes the bank’s risk exposure to government borrowers and small- and midsize enterprises. The stock closed May at 48.25 shillings, and the analysts forecast it will rise to 57 shillings. |