BEE-SASOL shares lost 14.97 percent on the JSE yesterday: Should investors be worried

2016-01-08 08:41


Sasol is an international integrated energy and chemicals company that leverages the talent and expertise of their more than 33 000 people working in 37 countries. Sasol develops and commercialises technologies, and build and operate world-scale facilities to produce a range of product streams, including liquid fuels, high-value chemicals and low-carbon electricity.

Despite the financial, material and human capital resource of SASOL, its recent listing the Sasol Inzalo (JSE Code: SOLBE1) shares onto the JSE appears to have been a major error. For the past three months the share lost a cumulative 14 percent in its value since October 2015. This was made worse yesterday when the company lost 14.97 percent of its value on a single trading day as it closed as one of the biggest losers on the JSE.


Despite the blows suffered by the shares since its removal from an over the counter share trading platform onto the JSE Empowerment Board on the 1st of December 2015. Investors are still not pleased with the shares and its value continues to depreciate


SASOL’s underlying asset, Oil has been hit by the collapsing global oil prices which have reached new lows in this first trading week of 2016. A depressed Sasol Group share is bad news for the highly indebted Sasol Inzalo investment scheme. The schemes financial results for the 2014/15 financial year show a R150m deficit. Technically, this means that if the seven years old scheme were to be liquidated today, the more than 200 000 black people who invested their last cents in the scheme would have lost money. That is a painful consideration for an initiative that promised economic redemption for its mass investors.

So What?

As investors continue to watch what happens to the depressed shares of Sasol Inzalo in 2016, it may be time for companies to rethink BEE shares structuring and listing on the JSE. There are no immediate signs of oil price recovery as the global oil prices reached new lows below $40 in January 2016, the lowest since 2004. This may mean more bad news for SASOL BEE investors who have already lost a significant portion of their investment in the scheme.

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