How Babalwa Ngonyama’s Sinayo Securities Delivers Exceptional Services to Investors in South Africa

Babalwa Ngonyama is an entrepreneur, philanthropist, and the mind behind the majority-Black, female-owned stockbroker Sinayo Securities.

Appearing on the cover of the latest issue of South African Business Integrator, she described how Sinayo Securities instils confidence in South Africa’s institutional investors by delivering exceptional, creative solutions.

Sinayo Securities’ Journey So Far

A member of the Johannesburg Stock Exchange (JSE), Sinayo Securities specialises in JSE-listed equity sales and trading. Thanks to its team’s comprehensive knowledge and use of the latest technologies, the company prices transitions and executes efficiently.

Sinayo Securities offers competitive brokerage rates depending on the frequency and size of trades. The independent stockbroker offers electronic routing for care orders, direct market access (DMA), and algorithmic trading on the Iress Pro and Instinet systems.

Ngonyama has built Sinayo Securities to success by offering exceptional solutions. She rallied a specialist team of strategists, stockbrokers, economists, and data scientists to craft and deliver these solutions.

This team has actively engaged in the JSE and financial markets for three decades. Their depth of knowledge enables the company to comply with regulations and manage trade, risk, and settlement activities seamlessly. As a result, Sinayo Securities serves some of South Africa’s top asset managers.

Sinayo Securities holds strategic equity interests in the securities lending business Optimize and the financial service provider Sinayo Wealth. Optimize provides Sinayo Securities with script lending capabilities. Meanwhile, through Sinayo Wealth, Sinayo Securities offers quantitative; environmental, social, and governance (ESG); and South African and global equity research. Meanwhile, Software Design provides the Sinayo Securities team with transactional cost analysis.

Babalwa Ngonyama on Running a Majority-Black Female Business

In Ngonyama’s experience, men often approach business differently than women. Majority-owned by women, Sinayo Securities brings a unique outlook to the financial services industry. This outlook enhances traditional business approaches.

Initially, Ngonyama had to overcome the challenge of clients not believing in her. Sinayo Securities delivered several presentations to engage prospective clients and demonstrate the company’s capabilities. “This was twice as much effort as what a typical male-led business would have had to do,” Ngonyama says.

However, working through this challenge strengthened Sinayo Securities, built the team’s resilience, and positioned the company to focus on execution excellence. Ngonyama and her team got clear on their purpose, who they serve, and why. They delved into their team dynamics and examined how each member’s strengths support the company.

“Cooperation is one of the values we treasure at Sinayo. We ensure that each member plays an important role in a team,” Ngonyama says. “We value inclusivity. Our diverse nature comes in handy in solving clients’ problems.”

Fulfilling Sinayo Securities’ Vision and Mission

Sinayo Securities’ vision is to establish pioneering solutions that make investments accessible for everyone. The mission is to deliver astute insights to clients and portfolio companies. These clients and companies can make crucial decisions based on these insights, enabling them to make a tangible impact and generate wealth.

To fulfil this vision and mission, Sinayo Securities:

• Provides clients with value through its ESG, quantitative, and thematic research.

• Ensures first-rate client service by being connected, responsive, and insightful and through outstanding execution.

• Creates transformation that reflects the company’s diversity and values.

• Gives clients executive access through the company’s theme-driven events.

• Uses the brokerage platform to nurture purposeful relationships and encourage sustainable growth.

• Mentors talented Black students and graduates to cultivate a diverse, skilled financial services industry.

By forming strategic partnerships, Sinayo Securities is reshaping the financial arena and offering its clients unique tools.

The company reaches clients and portfolios in Zimbabwe, Uganda, Tanzania, Rwanda, Nigeria, Namibia, Mauritius, Kenya, Ghana, and Botswana. It also supports the countries in the BRVM stock exchange: Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal, and Togo.

Supporting Clients Through a Dip in Investment Demand

Sinayo Securities is supporting clients and portfolio companies through a dip in South Africa’s investment demand. This demand is lower than usual because of the Financial Action Task Force (FATF) greylisting South Africa for not fully complying with international standards in the financial services sector.

Other factors have also reduced the appetite for investments in South Africa. These factors include competition from other emerging markets, infrastructure challenges, electricity supply disruption, and economic disturbance.

“We cannot give up,” Ngonyama says. Every country faces challenges, and “businesses and citizens have a role to play” in solving them.

Sinayo Securities understands the local dynamics that impact investment returns. Acting as a local partner, the company helps investors appreciate the risks that South Africa is facing and the available opportunities. Its specialists help clients analyse the South African market so they can leverage the right opportunities and make financial decisions that best serve them. 

Babalwa Ngonyama on 2024 Prospects for Investors

Ngonyama explains that 2024’s first decline in interest rates will likely come early in the year. As a result, “South African equities and bonds are cheaply priced in the international context,” she says.

Currently yielding 10.7%, the South African 10-year bond is fairly attractive, especially given that the Reserve Bank is targeting medium-term inflation of circa 5%.

High fuel costs and currency depreciation have increased inflation to 7%. However, the Reserve Bank’s successive interest rate hikes should see this inflation level slow over the next 18 months. Sinayo Securities expects inflation to drop into its target range in 2024.

Waning interest rates should yield equity gains. Ngonyama explains that the average Forward Price/Earnings multiple on the equity market over the past decade has been approximately 14.5x. The current Forward Price/Earnings multiple is 10.6x.

Ngonyama believes that bonds and equities will generate returns of more than 15% over the next two years at least. As interest rates fall, investors can expect growth and the rise of opportunities in areas like infrastructure development and private equity.

ESG Gathering Momentum in South Africa

On top of this, ESG should gather momentum in South Africa. While ESG principles have taken shape in many countries, South Africa hasn’t been as fast to embrace these principles. That said, the country is now catching up.

The JSE has implemented legislation that regulates the ways that companies report on their ESG initiatives. This legislation will improve the availability and visibility of data.

Meanwhile, Sinayo Securities’ research division has ranked listed companies based on their ESG credentials. The ranking process uses primary ESG data points and third-party scores to order the companies. The companies that have focused on improving their ESG credentials have materially outperformed those that haven’t.

Improving South Africa’s Economic Landscape

South Africa is tackling many challenges that, in part, explain the low prices across the country’s financial markets. These challenges include unemployment, crime, political foreign policies, the energy crisis, and the brain drain.

The brain drain sees thousands of people leave Africa every year in search of a better lifestyle. In 2022, the BBC surveyed over 4,500 people aged 18-24 in Africa. 52% said they were likely to consider emigrating in the next few years to access education opportunities and escape economic hardship.

Ngonyama emphasises that South Africa needs to be attractive to young, qualified people if they’re going to stay in the country and contribute to the economy. Pro-growth economic policies are essential to counter this challenge.

Sinayo Securities’ Next Moves

Moving forward, Sinayo Securities plans to expand on an international level, introduce new products and services for its clients, and broaden its focus on ESG.

Changes to South African regulation in spring 2023 mean that pension funds can now invest 45% of their assets offshore. As a result, there has been more demand for international research. Sinayo Securities has integrated this research into its research product range.

Meanwhile, allocations to alternative investments have increased to 15%, and allocations to infrastructure projects have increased to 45%. Ngonyama notes that these rises are “opening the door to consider the launch of a private equity fund.”

As Ngonyama believes ESG will grow in importance, Sinayo Securities is also developing a qualitative product on listed companies. Investors will be able to use this product to analyse private equity opportunities. The product will complement Sinayo Securities’ existing quantitative ESG ranking for South African listed companies.

About Babalwa Ngonyama

Ngonyama entered the world of finance to challenge the industry’s status quo and balance its heavy male dominance. Recognising that finance sits at the core of the economy, she knew this was a space she needed to reframe.

Today, at the helm of Sinayo Securities, Ngonyama preserves people’s wealth. “How we buy and sell shares is important to the livelihood of pensioners — the men and women in the street,” she says. “Playing your part and having an impact on society is fulfilling.”

Six years after launching Sinayo Securities in 2015, Ngonyama set up the Babalwa Ngonyama Foundation. This philanthropic organisation broadens access to leadership opportunities for people from marginalised backgrounds in South Africa.

Babalwa Ngonyama’s Advice for Budding Leaders 

Ngonyama encourages leaders not to fear failure, which is inevitable. “How you navigate and respond to your challenges is what matters,” she says. She reminds leaders that success is painful: “A successful leader has a lot of scars.” However, with cooperation and teamwork, it is possible.

As such, forging meaningful relationships with funders is essential. “People want to give money to someone they can trust,” Ngonyama says.

On top of this, Ngonyama emphasises that leaders need to form sound perceptions and insights. They also need to truly know and believe in themselves. “Be less concerned about what society thinks of you,” she says. “Know what you really are, and continue to challenge yourself and raise your game.”

“Don't be afraid of change,” she adds. Those who embrace change open themselves up to new opportunities. Those who don’t embrace change never adapt and get left behind. Sinayo Securities consistently tracks market changes so it can execute ahead of the curve.

Ngonyama finishes with a reminder that leaders need a positive attitude. They can master this attitude by surrounding themselves with positive people and living in “hope and faith in our abilities and those of others.”

Learn more about Babalwa Ngonyama.