Fund managers keep cool and carry on buying into Resilient
Instead of cranking up the pressure, institutions are buying shares in the very firms they wanted probed
In September, 10 of the largest investors in SA, including Prudential, Coronation, Allan Gray and the Public Investment Corporation (PIC), took the unprecedented step of asking the boards of the Resilient group of companies for a forensic probe.
This followed the large selloff in the shares of Resilient, Nepi Rockcastle, Fortress and Greenbay Properties in the first quarter of 2018, which cost investors more than R100bn and flung the listed property sector into turmoil.
The selloff also sparked an investigation by the Financial Sector Conduct Authority, which is investigating possible insider trading and price manipulation, and misleading reporting by or about the group. It remains unclear when the probe will be finalised and whether findings will be made public.
But instead of cranking up the pressure, the same financial institutions are keeping mum, with some buying shares in the very companies they demanded be probed.
This week, the PIC increased its holding in Fortress A shares, while Allan Gray said it bought Fortress A shares “based on valuation” in March, April, June, July and August.