The Investment Analysts Society of South Africa NPC
The Society started life in 1968. Ronnie Bethlehem who was with UAL Merchant Bank, was the driving force to form the Society as well as the publication of the Analysts journal in 1972. The committee consisted of a mix of stock brokers and financial institution employees. Brokerage fees were high and the big firms were extremely profitable. They were thus able to pay analysts excellent salaries and often poached staff from the institutions.
The bulk of stock market turnover was generated by individuals as the institutional market was in its infancy. Savings were dominated by the large life insurance companies.
Investment analysis was pretty elementary in 1968. There were earnings and dividend yields but comparative value and other more sophisticated analytical tools would have to await the arrival of the number crunching benefits of computers. The market was also driven by insider trading, which was rife (and not illegal at that time).
By 1968 the stock market was well into a massive bull market, which had lasted several years. New listings were two a penny and came to market on minimal earnings and dividend yields. This was the time of the corporate holding company formation to entrench family control of businesses. Everybody was speculating and making money. By 1969 the party was over. A number of the new listings went insolvent and it was not unusual for a company to trade at less than 10% of its peak price within a few years. This was certainly the biggest boom/bust stock market event of the past fifty years in South Africa and a salutary lesson to investors and analysts that no trend lasts forever.
The Founding IAS Committee: D E Milton (Chairman), J A Rogers (Vice-Chairman), R W Bethlehem,
J Blersch, W T Floquet, D G Humphreys, L J Kruger and J K Peters.
The Objects of the formation of the Society were:
- To improve the general quality of investment analysis and analytical techniques
- To establish and maintain professional standards in the investment sphere
- To foster the interchange of ideas amongst those concerned with investment matters, with a view to the solution of common problems