{"id":371612,"date":"2020-02-06T12:23:38","date_gmt":"2020-02-06T10:23:38","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=371612"},"modified":"2020-02-06T12:23:38","modified_gmt":"2020-02-06T10:23:38","slug":"jse-stocks-are-so-low-they-are-tough-to-resist","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/371612\/jse-stocks-are-so-low-they-are-tough-to-resist\/","title":{"rendered":"JSE stocks are so low they are tough to resist"},"content":{"rendered":"

South African stocks may have become too cheap for investors to ignore and Old Mutual Investment Group is among money managers seeing an increasing number of attractively valued shares.<\/p>\n

The Johannesburg market has fallen to its least expensive levels in more than seven years, dragged lower by a faltering local economy grappling with\u00a0a long list\u00a0of challenges.<\/p>\n

Concerns that the coronavirus outbreak will hurt global growth have added to the woes early in 2020.<\/p>\n

Evidence the government is serious about sparking growth, repairing battered business confidence and rehabilitating the creaking state power company would help spur buying, said Peter Brooke, head of Macro Solutions at OMIG, which manages about R663 billion ($45 billion) in assets.<\/p>\n

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\u201cThe South African market five years ago was expensive, but there is more and more value appearing, and there are more and more companies that we see as attractive, and we would be looking to apply cash in those areas,\u201d Cape Town-based Brooke said in an interview.<\/p>\n

Share-price declines have outpaced the drop in company earnings, resulting in higher dividend yields and relatively low price-earnings ratios.<\/p>\n

Investor-friendly steps Brooke would like to see include streamlining the management and operation of state-owned companies.<\/p>\n

The contents of Finance Minister Tito Mboweni\u2019s budget next month could be key to a re-rating of South African stocks, depending on what he says about issues such as debt-crippled electricity supplier Eskom.<\/p>\n

\u201cIt is very hard for companies to manufacture profits, so to get a proper turn around, we would need structural reform,\u201d he said. \u201cSouth Africa is cheap without the improving outlook. We can create that, but it will require political will.\u201d<\/p>\n

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Among proposals Brooke said could help jump-start growth is one by Mineral Resources and Energy Minister Gwede Mantashe to set up an\u00a0alternative to Eskom\u00a0that makes use of greener technology.<\/p>\n

The utility has been described by Goldman Sachs Group Inc. as\u00a0the biggest threat\u00a0to South Africa\u2019s economy because of its rolling blackouts and debt burden of about $30 billion.<\/p>\n

\u201cIf we allow the private sector to deliver electricity, that means in the next 12 to 24 months, we will get more electricity into the grid and then we can grow a little bit,\u201d Brooke said.<\/p>\n

Here are more of Brooke\u2019s views:<\/p>\n

South African Bonds<\/strong><\/p>\n