Acc-Ross Holdings, which listed on AltX in February, has just undergone a much-needed management overhaul.

New CEO Wilf Robinson, the former CEO of Absa Private Bank, was appointed last month and plans to dispose of noncore property assets. Another plan is to place the company in the hotel and leisure sector rather than the development sector, which is viewed as more risky.

But Acc-Ross still has its work cut out for it. The company listed on AltX two months before the general unit-price fallout among listed property stocks on the JSE, caused by a hike in interest rates and general emerging market volatility. Before the fallout, most listed property companies on the JSE were performing well, with major unit-price appreciation up until May. Acc-Ross unfortunately did not fair well at all, with its market capitalisation halving on the first day it traded.

Although the stock initially recovered after its disastrous first day of trading, the share price value has been steadily declining ever since. The stock is now trading at 15c after listing at R1.

Robinson has a long and difficult road ahead in trying to change the perception of the market that Acc-Ross is a risky stock. Repositioning Acc-Ross as a hotel and leisure company would definitely be a step in the right direction.

With the threat of more interest rate hikes to come, a development company on the JSE is not an attractive prospect for investors.

But hotels could prove to be a shrewd investment in light of the 2010 Soccer World Cup and the increased demand for hotel accommodation that is expected.

Business Day
Publisher: I-Net Bridge
Source: I-Net Bridge