Tsogo Sun Hotels up as 'strong portfolio' draws buyers

News24
12 Jun 2019, 23:43 GMT+10

Tsogo Sun Hotels climbed on its Johannesburg stock exchange debut as the South African hotel operator attracted investors with the potential of its portfolio of properties.

The stock rose to R4 by the close Wednesday after first trading at R2.70, valuing the company at about R4.2bn. Some 700 000 shares were traded. The hotel operator was carved out of Tsogo Sun Holdings Ltd., which declined. That company now houses the group's casino operations.

'Many stocks undervalued'

"Many stocks are deemed undervalued on the JSE right now and management teams are trying to find ways to drive share prices higher," Nolwandle Mthombeni, an analyst at Mergence Investment Managers in Cape Town, said by email. "This move allows investors to invest in either the casinos or the hotels."

The newly listed company has 110 hotels, with a combined total of almost 19 000 rooms, ranging from budget to deluxe offerings. Tsogo Sun Holdings has said the hotels division services a different customer base to the gaming division and is subject to different demand and risk profiles, particularly in regulation.

"They have a very strong hotel portfolio and although it's still operating at lower than desired occupancies, it's a much lower risk and has a more stable earnings profile," Mthombeni said. "If business confidence recovers, it will do well."

Watch latest videos

News RELEASES

Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Nepal National.

More Information

null in null

Business

Section

U.S. stocks recover after Trump-tariffs-induced slump

NEW YORK, New York - U.S. stocks rebounded Tuesday with all the major indices gaining ground. Markets in the UK, Europe and Canada...

Stocks slide as Trump unveils 25% tariffs on Japan, S. Korea

NEW YORK CITY, New York: Financial markets kicked off the week on a cautious note as President Donald Trump rolled out a fresh round...

BRICS issues rebuke on trade and Iran, avoids direct US criticism

RIO DE JANEIRO, Brazil: At a two-day summit over the weekend, the BRICS bloc of emerging economies issued a joint declaration condemning...

BP appoints ex-Shell finance chief Simon Henry to board

LONDON, U.K.: This week, BP appointed Simon Henry, former Shell finance chief, to its board as a non-executive director effective September...

FedEx, UPS step up as Canada Post loses market share in strikes

OTTAWA, Canada: With Canada Post struggling to maintain operations amid labour unrest, rivals like FedEx and UPS are stepping in to...

U.S. stocks steady Tuesday despite tariffs turmoil

NEW YORK, New York - U.S. and global markets showed a mixed performance in Tuesday's trading session, with some indices edging higher...

Southeast Asia

Section