I finally had my arm twisted to see The Odyssey. I had resisted valiantly … and I was duly underwhelmed. I am certainly not Homerphobic, but generally classics don’t translate well into celluloid. I think Pier Paolo Pasolini made valiant attempts with Oedipus Rex and later Decameron, Arabian Nights and The Canterbury Tales. These are visual delights and most entertaining creative cavorting; the latter, focusing on Chaucer’s bawdier tales, caused pretty much the entire Rhodes University English department to walk out of His Majesty’s Bioscope back in the mid-1980s.
While gutted at forking out a hefty ticket price to catch the latest blockbuster, I had some compensation in, ironically, stumbling on a far more compelling odyssey on YouTube. For those who prefer a grittier epic passage, I recommend checking out A Thousand Junkies, probably filmed on the equivalent of the budget for the Cyclops’s contact lens in Christopher Nolan’s version of The Odyssey.
Speaking of budgets and contemplating classic tilts, with some dividends rolling in there are interesting decisions to be made in the weeks ahead. More dirt-cheap Reinet or a flutter on mid-cap gold miner Pan African Resources? Prosus/Naspers looks interestingly brittle too, but like my taste in movies, I’m not always enamoured of things done on an epic scale and unconvincingly scripted.
One little sleeper I could kick myself for missing was cable specialist South Ocean’s electrifying comeback. The share fizzled to 54c in June but much-improved interim results sent it to 94c. The company managed to repair its gross margins, despite reporting that low-voltage wire and cable imports almost doubled year on year. South Ocean added that the cost of importing goods is now significantly cheaper per kilogram landed due to China dumping substandard cables at “suspiciously low rates”.
It’s not a pretty operating scenario, and that’s probably why South Ocean’s shares are still well off the 170c level seen at the start of this year and the 250c recorded in October 2024. South Ocean traditionally has a markedly stronger second half, so the 8c a share earned at the interim stage needs an aggressive annualising. At 20c a share for the full year, the stock looks decent value, possibly decent enough to trigger potential corporate action. The longer-term upside from here might be compelling if the local cable manufacturing body can convince the government that inferior imported cable risks short-circuiting infrastructure projects.
On the topic of corporate action, I see US investor Shipyard Capital speculating in its latest newsletter to clients that heavy machinery manufacturer Bell Equipment will be acquired by Japanese equipment giant Hitachi. Bell, for the record, is not under cautionary, though some punters have remarked pointedly about recent higher-than-usual volumes in the share. Shipyard reminded that in the recent past it mentioned “some of the commercial and governance posturing” that made it clear that Bell’s acquirer will be Hitachi, adding that “recently that posturing has become frenetic”.
Shipyard alludes to Hitachi and its largest shareholder, Itochu, being in the press almost weekly hinting at a forthcoming acquisition that will bolster Hitachi’s position in mining trucks. Bell is probably best known for its articulated dump trucks. Other factors Shipyard flagged were dealer overlaps in France and the US, similar partnerships with an autonomous driving company and Hitachi doing public autonomy demos using Bell trucks. Shipyard also noted that Itochu appointed a director to Hitachi’s board, and that this director had “spent his career running things in Africa”.
If that’s not enough speculative fodder, for good measure Shipyard chucked in that Bell had been liquidating old parts at scale (“just the sort of thing you do to clean up working capital before an acquisition”). Shipyard concedes that these factors might simply point to an extended partnership agreement under which Hitachi pushes Bell trucks more extensively through its global dealer networks. Frankly, for Bell and its shareholders, that’s not the worst outcome either.
Shifting back to cables, the most intimate glance at the dynamics of the fibre-optic cabling market in South Africa is usually gleaned from Remgro’s (very) detailed reports on its Maziv (formerly CIVH). Maziv’s progress, now that it has a well-fortified capital structure to expand aggressively again, is keenly awaited with Remgro’s final results to end-June (due September 23). But new funding arrangements disclosed at the conglomeration of Frogfoot Networks, Vox and Hypa Fibre also go some way to underline the vibrancy of the local fibre-optic market.
In short, new — but undisclosed — funding arrangements place an enterprise value of R14.8bn and net equity value of R8.4bn on this trio of businesses, with new investor Sabvest Capital* stepping aboard with an 8.97% direct interest as part of the broader DNI Consortium (which will hold 34.8% combined). Metier Private Equity is reinvesting as the second-largest shareholder grouping (securing a 27.54% stake) with EM-Three Investment Holdings ranking as the third-largest direct shareholder. The business is considerably smaller than Maziv in terms of value, but it has set a huge goal of deploying its fresh capital to quadruple annual fibre rollout to 360,000 connected homes in lower-income/township markets over the next 12 months.
That’s precisely where Maziv is concentrating its main growth thrust, which makes for an intriguing battle for the most viable positions in a sprawling and largely unexplored market.
*Sabvest is a major shareholder in Apex Partners, which is the controlling shareholder of The Financial Mail Group
