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Transcript:

The two commodities within Highveld - vanadium and steel - we like. The lesser one is probably vanadium - over the last few years if you look at that market there’s been an uninvestment. We think over time the vanadium price will probably rally from $29 much higher and there is a possibility it could even double. This is a company where if you look at the last five or six years the earnings before interest and tax (Ebit) margins are closer to 20% and we think they could get to 30% or higher. We expect when they report results now to the end of the year they will deliver about R6 in earnings but we think thereafter they could do anywhere between R8 and R10. The share is trading at R79 so on that basis it’s closer to a seven or eight times PE and we think within that market vanadium and steel are two commodities where the prospects look quite good.

Giulietta Talevi: Is it fairly easy to get into Highveld shares? They’re quite tightly held because they’ve got that big controlling shareholder in the Russian company Evraz?

Nesi Chetty: I think from a liquidity point of view you can try and access that in small amounts. There are shares available so the small investor should be able to buy Highveld.

Broker:
Nesagan Chetty, RMB Asset Management

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