Sygnia lifts dividend 25% as Wierzycka pins growth on the AI trade
South Africa's second-largest multimanager reports 22% earnings growth and R460bn under management as it bets its funds on global AI exposure.
Sygnia has raised its interim dividend by about 25% and reported headline earnings per share up 22% to 138,1c for the six months to end-March, as the asset manager placed artificial intelligence at the centre of its growth story.
The group, South Africa’s second-largest multimanager asset management firm, declared a total dividend of 122c for the first half of its financial year. After-tax profit rose 25% to R216m, revenue rose 24,3% to R616m, and operating expenses rose 21,6%, which the company attributed to increased investment in staff and technology.
Shares in the group climbed as much as 3,7% on the release of the results, reaching R33,50, their highest level since February and less than R3 short of the record high set in December. Over five years the shares have gained just under 75%, as assets under management and administration grew from R251bn to more than R460bn.
The AI trade, in the company’s own numbers
In her biannual letter to shareholders, chief executive Magda Wierzycka wrote that AI has been the primary theme for markets over the past six months, fuelling a return of about 6,9% from the JSE Top 40 index and driving R8bn in market appreciation for the firm’s portfolio.
“The AI investment theme has dwarfed any concerns about the economic impact of political disruption,” the letter reads.
Sygnia’s case rests on a set of global developments. Google, Microsoft and Amazon are investing billions into their own data centre builds and AI adoption programmes, and the companies riding that spending now make up nearly a third of the S&P 500 index. Tightening supply of data centre hardware has lifted Asian memory chip makers such as Samsung and SK Hynix, more than doubling the size of South Korea’s stock market since the end of last year. Closer to home, Naspers, the second largest listing on the JSE Top 40, gives local investors exposure to Tencent and to China’s push to become a dominant player in the global AI race.
The letter also flags the listings of large language model owners OpenAI, Anthropic and xAI as a factor stirring tech stock buying.
Sygnia has built product around the theme since OpenAI released ChatGPT in November 2022. It marketed itself as the first asset manager to launch a tech and AI-focused actively managed exchange-traded fund soon after that release, and earlier this year launched a venture capital fund aimed specifically at local AI startups. Its most popular fund tracks the JSE Top 40.
What the company says it is watching
The outlook the company presents is not unqualified. Wierzycka’s letter notes concerns about the threat AI poses to job markets, and states that strong GDP growth fuelled by infrastructure spending can co-exist with rising unemployment.
She argued that South Africa is no more vulnerable to that threat than the world’s largest economy, and has previously emphasised that AI will affect white-collar jobs rather than the manufacturing and robotics work that absorbed earlier waves of automation.
On the country’s position in the global contest, her letter strikes a measured note. “From initially being a target of US wrath, South Africa has become an observer,” it reads. “Perhaps that is the best place for us to be.”
For South African investors, the practical question the results answer is what the AI theme has done to a rand-denominated portfolio. Sygnia’s answer is R8bn of market appreciation over six months and a dividend 25% higher than a year ago. The company’s next set of numbers will test whether that holds.
Source: Sygnia, Sygnia shares rise as Wierzycka doubles down on AI boom
