In recent weeks we have noticed a spike in the number of searches related to the African Rainbow Capital (ARC) share price and have prepared a summary of recent developments at the investment group.
African Rainbow Capital (ARC) is a fully Black owned and controlled company focusing on the South African and African financial services industry and businesses that deliver exceptional returns on equity. The company listed on the JSE on 17 September 2019 at R8.40/share.
Over the past 12 months, the ARC share price is down 27%.
The share currently trades at a price of R4.15/share, a significant discount to the reported Net Asset Value (NAV) of R9.28.
The Price to Book ratio of 0.44 is very undemanding.
The group owns a number of interesting assets but the two attracting the most interest at the moment are telecommunications group Rain and banking start-up group Tyme Bank – in which it holds a 36.7% stake.
For interest sake, we mapped the performance of the ARC share price against the more established PSG (which is currently trading at 52 week lows), black-owned investment Brimstone as well as the private equity play Ethos:
Valuations of JSE listed businesses remain weak and ARC has suffered the dual hits of having to fund early stage businesses while its more established businesses have been weighed down by the sluggish economy.
There have been no share purchases by insiders in 2019 but directors were regular buyers between R5.85 and R6.47.
Comparing the Price to Book ratio of 0.44 against a number of its other investment holding companies, suggests that it appears cheap relative to some of its peers:
– PSG – 2.4
– Brimstone – 0.71
– Remgro – 0.89
– Ethos Private Equity – 0.9
– Hoskens Consolidated Investments (HCI) – 0.5
ARC offers investors the opportunity to access a broad variety of listed and un-listed assets through an investment vehicle which enjoys significant B-BBEE credentials. With R1bn in cash available for investments, ARC enjoys significant cash to be able to deploy, should it identify other assets at attractive prices.
