If the investment community can get certainty around the ANC land policies, the agriculture sector in South Africa could be one of the most exciting growth opportunities for investors. However, farming is a capital-intensive exercise and investors are limited to options to participate in the sector.
On the JSE, one could look at the likes of Zeder, Tongaat and Crookes Brothers. However investors shouldn’t forget that the ZAR X exchange also has 2 agri listings up for consideration.
- Price to earnings multiple: 6.9
- Dividend yield: 4.48%
Senwes is one of South Africa’s largest integrated agri-businesses and one of the world’s largest providers of white maize to the market. Its grain storage capacity stretches across 60 silo complexes and allows storage of 25% of grain produced in the country. The 108-year old company focuses on input supply, financial and equipment and precision farming services, and market access (grain handling, secure storage and marketing), covering the Northwest, Free State, Gauteng, Mpumalanga, KwaZulu-Natal, Eastern Cape, and Western Cape provinces. Senwes is one of the exclusive John Deere agencies in the central and eastern part of South Africa.
You can follow trade in Senwes here.
- Price to earnings multiple: 4.2
- Dividend yield: 3.68%
TWK is a diversified agriculture and forestry company, headquartered in Piet Retief, Mpumalanga. It operates mainly in Mpumalanga and Kwazulu-Natal, but with business interests in several other provinces as well as in Swaziland. TWK operates businesses in the Timber, Agricultural Retail, Mechanisation, Grain, Financial Services and Motor & Tyre industries.
You can follow trade in TWK here.
Volumes on the ZAR X
One of the key considerations for investors looking at new exchanges like the ZAR X are obviously trading volumes. It doesn’t help to hold equity if you can’t transact in it. Both shares are transacting on a weekly basis. As awareness of the exchange grows and the opportunities on this bourse, volumes should continue to rise.
You can follow their trading activities here.
For TWK, the most liquid day was 16 May 2018 when R191 785 in trade.
For Senwes, it was 18 May 2018 when R22309 was traded.