Avior Capital Markets - Coronation Fund Managers Limited (12AS) Coronation | A slow improvement in net flows

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Avior Capital Markets

David Talpert ...

Harry Botha

Coronation | A slow improvement in net flows

Coronation Fund Managers (CML) reported an 18% decline in FY '19 headline earnings. Net outflows of R44bn is ahead of the five-year average of R38bn. We expect FY '20f earnings to recover (8.3% y/y growth) as net fee margins improve. We forecast AUM growth at a 3% CAGR over the next three years. In our view, the investment case depends on CML's ability to generate sufficient alpha to stem the outflows. We believe the outflows will continue unless there is consistent alpha generation or net growth in the SA savings pool.

08/01/2020 12 EN

Underlying

Coronation Fund Managers Limited

Coronation Fund Managers is a third-party fund management companies. Co. is organized into three key segments: institutional, which manages institutional assets in South Africa in both segregated and pooled mandates; retail, which provides a range of funds distributed through the non-affiliated channels of independent financial advisors and linked investment service providers; and international, which is being managed from Cape Town and London. Co.'s customers include retirement funds, medical schemes and multi-manager companies in South Africa, banking and insurance groups, investment advisory businesses, independent financial advisors, individuals and direct unit trust accounts.

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ZAE000047353 Johannesburg Stock Exchange South Africa

Provider

Avior Capital Markets

Avior is a globally recognised capital markets research and trading firm, with the broadest research coverage within the region, with 100+ SA and 20+ SSA companies under coverage. Avior services clients from offices in London, Cape Town and Johannesburg.

Our research quality is consistently recognised in local and global surveys, with 18 analysts currently rated in their respective sectors (FM 2017). Value add through in-depth, innovative, high quality and consistent research with comprehensive underlying fundamental modelling supported by regular analyst and roadshow interactions.

Avior has proven that by working closely with our clients we can mutually develop dominant positions in certain sectors, going from strength to strength. Avior has a dedicated ESG team, having been ranked #1 in Corporate Governance research since 2008.

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Analysts

David Talpert

Harry Botha

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Coronation | A slow improvement in net flows

Avior Financials | Coronation | Peregrine | Repo rate cut | Investment Banking statistics

Coronation | At the mercy of the markets

Tiger Brands | ESG | Pressed to execute

SA Investment Strategy | Review of January 2020 for SA investors: Coronavirus weighs on the ZAR

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