Bravo Wescoal – but three going bust, most losing money: 2005 poor new listing vintage

We all like to be on the inside track. Should they be offered, most will pile into shares of any soon-to-be-listed company. Buying blind is never a good thing. In 2005, though, it would have been an especially bad idea. Of the 11 new listing that year, only Wescoal celebrates its first decade as a public company in any style. Wescoal shares have risen from their pre-listing offer of 50c to a fraction over 200c today, a return of 300% over the 10 years.

That’s where the Class of 2005’s good news ends. Two of the others, Oasis Property Fund and Amalgamated Electronics, trade above their pre-listing price – although neither beat the interest paid by a savings account. The nine other debutants of 2005 all lost their supporters money. Three of them have been liquidated so the shares are now worthless; two others trade at less than a tenth of their pre-listing price; the balance have fallen in value between 70% and 85%. Clearly, investors would have been best advised to ignore the entire JSE New Listing Class of 2005.

UPDATE: Note from an independent property investment specialist puts Oasis’s performance into perspective: “Don’t forget Oasis Property Fund would have carried a yield of (I guess) in excess of 10% pa through the period.  As with all REITs – like property, the yield has made up over half the total return for the last 35 odd years.  So its given a rather attractive real return over this period.”  Good point. So Oasis means two of the 11 did well. Still not great odds.

The JSE’s Class of 2005: Click on the Listing Date to read the pre-listing statement.




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