Chief Investments Officer at Clivera Inc, Clive Ramathibela-Smith, says Barclays sponsored teams might find themselves looking for other sponsors.(SABC)
Chief Investments Officer at Clivera Inc, Clive Ramathibela-Smith says Absa account holders should not worry about Barclays selling its 62.3% stake.
Speaking in an interview on Morning Live, Ramathibela-Smith says the move actually gives other investors an opportunity to get involved.
"No, nothing to be scared of at all. In actual fact I reckon the way that Barclays came out yesterday explaining things. I mean there were talks, from the beginning of the year of what they were going to be doing. We saw a lot of European branches also downscaling, cutting down of jobs, those were the ones that they actually wanted to cut down, but downscaling on the African continent might actually be an opportunity for other investors to get involved, but the average ABSA account holders have nothing to worry about whatsoever."
Barclays decision comes as South Africa faces tough economic conditions with a low Gross Domestic Product growth.
Ramathibela-Smith says that Barclay’s downscaling shows that they have not been making money.
"It is not a good sign at all, what is interesting about it is that they went and changed their registered name on the JSE from Absa to Barclays Africa, for me that was a sign that there was going to be further investment, that there was going to be more concentration on the African continent and they have mentioned that but they have not been making money, so why change the name while you know that the very next year you will be downscaling. I thought maybe the reason behind that was that they wanted to attract more investors but that did not work so that is why they are downscaling."
He says the sporting fraternity might be negatively affected.
"My concern on the South African side is that when companies start to downscale they look at where they can cut off and although we were reassured yesterday (Tuesday) that there is not going to be a cutting down of jobs immediately at least, but the sponsorships for example the Springboks are they going to cut down on that?"
He adds: "Are they going to cut down on the Absa Premiership, does that mean that they are going to downscale on that and who is going to be sponsoring those particular ones, those are the few ones that I know of and I know that there is a quite a lot of sponsorships they do, the question is are those guys going to find themselves in the middle of nowhere trying to find sponsors?"
Click below for the full interview: