Business

South African investors sound the alarm

Luke Fraser

 ·27 May 2025

Asset manager Coronation has seen a slight increase in earnings, but it warns that South Africa’s low economic growth will continue to strain savings and investments.

In its interim results for the six months ended 31 March, the group said the period was marked by heightened uncertainty primarily due to trade tariffs and protectionism in the USA. 

In South Africa, global tensions were exacerbated by disagreements in the Government of National Unity (GNU) over the 2025 Budget. 

While the country now has a budget that appears to have support from the GNU, the initial budget uncertainty unwound much of the positive re-rating South Africa enjoyed after the 2024 national election. 

“In this complex operating environment, we have remained true to our long-term investment philosophy and continue to invest strategically in the sustainability of our business,” it said.

“We have delivered solid interim financial results under these challenging circumstances.” 

Total assets under management (AUM) increased slightly to R676 billion (30 September 2024: R667 billion), while average AUM increased by 9% to R677 billion (31 March 2024: R619 billion). 

Net outflows moderated year-on-year from 4% to 3% on average AUM. 

Although this is encouraging, the group noted that the South African savings and investment industry has been contracting for over a decade. 

This is due to high unemployment, high indebtedness and low economic growth.

The group said that industry outflows are expected to continue until there is sufficient economic growth to reverse these trends. 

Looking at the financials, the group’s operating expenses increased by 7% year-on-year, as it focused on tight expense management while also future-proofing its business. 

“A key aspect of this is retaining our team of talented individuals in an increasingly globalised industry where the competition for scarce skills is fierce.”

The company continues to invest heavily in information technology, data management, and maintaining our excellent reputation for good governance and compliance. 

Fund management earnings per share attributable to ordinary shareholders were up 8% at 200.2 cents per share. 

Basic and headline earnings per share also increased by 2% to 205.1 cents per share. The group’s interim dividend per share increased by 8.1% to 202 cents per share.