“Statements around quantitative easing and the ending of that particular period would have created some level of volatility in the markets. We do have businesses that are exposed to the capital markets, that does wreak havoc with valuations and our revenues are based on the valuations of the portfolios that we manage,” Khoza, the MD of Vunani Limited, told CNBC Africa on Tuesday.
“We’ve seen it in our advisory business – uncertainty does create long lead times on concluding deals. It does have an impact on valuation of transactions,” he added.
The financial services company specialises in the areas of institutional fund management, private wealth management, corporate advisory and stock broking services to institutions and private clients.
The company is also involved in property development and investment which includes developments in the commercial, industrial, retail and residential sectors of the market.
“We’ve also seen upward and downward movements. I think as with most capital markets in South Africa, global capital flows are a big factor driving liquidity in our market. I’m not sure it’s as much of a factor on the property side as it would be in bonds and equities,” Khoza indicated.
Vunani also reported an 83 per cent reduction in net finance costs. Khoza explained that reducing the company’s debt-related investment was a focus of theirs and they had to come up with settlement terms with their funders.
“Finance cost has been one area that held us back historically. I think no matter how well we did in our operations, the fact that we were running up this bill meant that we couldn’t really get ahead. To effectively redeem our debt means that, in future, the results of our operations is available to us to grow our business going forward.”