Investments

Domestic markets – positioning to take advantage of the local market

conditions – where should you invest?

Patrice Rassou | Head of Equities

8 June 2017

JSE LANDSCAPE

Sanlam Investments 2BCI Global Conference 2017

84%

11%

3%1%

JSE Universe by Market Cap

Large

Mid

Small

Fledgling

“The Small Cap Universe (364 BZAR) is less than one-third the size of Naspers (1.1 Trillion ZAR)”

Perception is key

Sanlam Investments 3BCI Global Conference 2017

Perception vs Reality

Sanlam Investments 4BCI Global Conference 2017

Basic Resources; 14,6% Healthcare; 1,0%

Retail; 12,0%

Chemicals; 2,1%

Financial Services; 12,2%

Construction & Materials; 2,0%Real Estate; 19,8%

Food & Beverage; 8,3%

Industrial Goods & Services; 11,7%

T communic.; 2,5%

Investment Instruments; 0,5%

Media; 0,2%

Travel & Leisure; 3,2%

Banks; 3,3%

Technology; 2,4% Insurance; 3,9% Automobiles & Parts; 0,4%

CURRO

SUNINT

CLOVER

MURRAYS

SPURCORP

Perception“When we say Mid/Small Caps!!!”

REALITY –Mid/Small Cap Universe

Source:SIM Equities Research

Interesting opportunity set, lets track it … Its not that simple

Sanlam Investments 5BCI Global Conference 2017

Cyclicals; 70%

Defensive; 30%

Mid/Small Universe

Large Mid Small Fledgling

51 54 59

116

JSE- Stock Count

Source:SIM Equities Research

0

50

100

150

200

250

300Q

R2

19

93

QR

4 1

99

3

QR

2 1

99

4

QR

4 1

99

4

QR

2 1

99

5

QR

4 1

99

5

QR

2 1

99

6

QR

4 1

99

6

QR

2 1

99

7

QR

4 1

99

7

QR

2 1

99

8

QR

4 1

99

8

QR

2 1

99

9

QR

4 1

99

9

QR

2 2

00

0

QR

4 2

00

0

QR

2 2

00

1

QR

4 2

00

1

QR

2 2

00

2

QR

4 2

00

2

QR

2 2

00

3

QR

4 2

00

3

QR

2 2

00

4

QR

4 2

00

4

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2 2

00

5

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4 2

00

5

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2 2

00

6

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4 2

00

6

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2 2

00

7

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4 2

00

7

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2 2

00

8

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4 2

00

8

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2 2

00

9

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4 2

00

9

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2 2

01

0

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4 2

01

0

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2 2

01

1

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4 2

01

1

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2 2

01

2

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4 2

01

2

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2 2

01

3

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4 2

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3

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2 2

01

4

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4

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2 2

01

5

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4 2

01

5

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2 2

01

6

QR

4 2

01

6

SA GDP Growth- Services & Manufacturing

Services Manufacturing

Change creates OPPORTUNITY

Sanlam Investments 6BCI Global Conference 2017

Agriculture Agriculture + Industrial Sector Connected Agricultural Services

Source:SIM Equities Research

Stagnation v Productivity Improvement

Sanlam Investments 7BCI Global Conference 2017

Source:SIM Equities Research

You need to know the Bigger Picture…

Sanlam Investments 8BCI Global Conference 2017

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

0

10

20

30

40

50

60

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Curro - Students and Campuses

Campuses (LHS) Students (RHS)

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

18 000

20 000

0

20

40

60

80

100

120

1978 1984 1997 2003 2004 2008 2009 2013 2014 2015 2016 2017

Dischem - Stores and Revenue

No. of stores (LHS) Revenue (R'm) (RHS)

Source:SIM Equities Research

CONCLUDING THOUGHTS

Sanlam Investments Concluding Thoughts 9

• Fear always creates opportunities for Long Term Investors

• SA Inc is today gripped by anxiety but some companies will still thrive

• Our research process is geared to identify such opportunities

• Great business models are not only going to survive but thrive in a tougher environment

• Our job is help you thrive in this tough economy !

BCI Global Conference 2017

Investments

C

“…investment companies find it difficult managing investments

abroad when they are not country or sector experts and have no

reliable contacts “

Jannie Mouton on International expansion