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The Tao of equity capital

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The Tao of equity capital

Nastascha Harduth - Sector Head and Director, Yaniv Kleitman – Director, and Zachary Kokosioulis - Associate were recently featured in the Sunday Times Supplement, where they discussed “The Tao of equity capital.”

11 Aug 2025 1 min read Article

They explain that dividend reinvestment plans (DRIPs) are a popular mechanism used by listed companies, allowing shareholders to reinvest cash dividends in exchange for additional shares, rather than receiving dividends in cash.  However, while DRIPs have their advantages, a downside is that they dilute issued shares, which can, in turn, result in a drop in share price. To counteract this effect, companies may want to take a closer look at their capital management plan and consider a repurchasing programme where they buy back a portion of their shares from shareholders.

Recent regulatory changes in South Africa have simplified substantial buy-backs, especially for listed entities, making these tools even more attractive for capital management. Striking the right balance between DRIPs and buy-backs is key to optimising shareholder value and ensuring long-term financial health.

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