WATCH: Stock picks — ARC and Blue Label Telecoms

Graeme Körner from Körner Perspective chose African Rainbow Capital as his stock pick of the day and Ashraf Mohamed from Arqaam Capital chose Blue Label Telecoms.

Körner said: “I’m being cautious and if you can buy investment companies at 30% plus discounts to NAV [net asset values] with underlying operating entities that could perform in a more favourable environment and African Rainbow has some businesses in there that are very disruptive and I think they have got some real-world assets as well.”

Mohamed said: “Mine is a short on Blue Label Telecoms, their share prices ran very strongly, to me there is risk in terms of the maturity of the mobile industry so I see limited to negative growth for them in SA. Nigeria hasn’t been such a great environment either and then, of course, you have the Cell C issue and Cell C will continue making losses, so at the end of the day I think they’re going to come out, and they’re either going to need to do a rights issue or they’re going to have to merge with a third party but they are under pressure in my view.”