South African Investment Companies

There are many investment companies in South Africa that are accredited financial institutions and that can assist you in creating the perfect investment portfolio. For first-time investors, the obvious option to start off with is with one of the four major banks in South Africa. These institutions offer multiple investment options for investors. These will range from fixed deposits to money market and stock market investments. Always try and research the different options carefully. Not all banks offer the same interest rate on your investment and they do not all have the same track record.

Then you have more “specialized” investment banks. I will go over what some of these companies stand for but please discuss any financial decision regarding your choice of investment and investment company with your financial advisor before making any commitments.

Rand Merchant Bank Holdings (RMBH): RMBH was launched in 1987 and listed in 1992. According to their website, they have seen a 30% annual compound growth in net profit per share and a 20% annual growth in normalized earnings per share since 1993. Their investment philosophy is based on three main considerations:

  • Stability and maturity of the FirstRand Group, which is their main investment. This investment represents 93% of their intrinsic value and has generated 88% of their normalized earning last year.
  • Relatively insignificant borrowing within RMBH itself which, when viewed in a broader market point of view, leaves them with an underutilized balance sheet.
  • The high level of dividends from outside the FirstRand Group has highlighted the potential from broadening their investment portfolio.

Investec Specialist Bank: Founded in South Africa 1974, Investec has expanded through a combination of strategic acquisitions in South Africa, the United Kingdom and other countries and substantial organic growth. According to their website, their strategic goals are motivated by a desire to develop business on an international scale through active pursuit of clearly defines core competencies. Investec is organized as a network of business divisions comprising of:

1. Investment Banking
2. Capital Markets
3. Private Client Activities
4. Asset Management
5. Properties