How to sell Sanlam shares for South Africans

Sanlam is a South African financial services organisation and one of the largest insurance companies in Africa⁵. Established in 1918 as a life insurance company, the Group has developed into a diversified financial services business⁵. The five pillars of their business comprise Sanlam Personal Finance, Sanlam Emerging Markets, Sanlam Investments, Sanlam Corporate and Santam⁵.

The company is listed on the JSE and is a common investment made by South Africans.

You can hold Sanlam shares in four different ways⁹:

1. Shares in the Sanlam Share Account (a Computershare Central Securities Depository Participant / CSDP)
2. Shares held in your own name in Computershare’s CSDP
3. Shares held by a bank or broker in other CSDP’s
4. Shares held by means of share certificates

But how do you sell these shares? Our guide breaks down the process of selling Sanlam shares you hold.

We also introduce you to Wise for when you want to sell shares that payout in USD, GBP, or other currencies to transfer money back to South Africa in ZAR at the mid-market exchange rate - similar to the rate you see on Google.

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Should you sell Sanlam shares now?

Deciding when to buy shares is commonly seen as a relatively simpler decision than when to sell it. Selling shares requires a lot more thinking and can be very complex since you can never know for sure if it’s the right decision.
Here are five tips on when it might be the right time to sell your Sanlam shares and the times when you shouldn’t⁶.

When you should sell your shares:

• It reaches the price at which you’d be comfortable selling

When choosing to buy a stock seasoned investors typically establish a fixed target or even an approximate range which when reached they would think about selling the stock. When purchasing a stock you should carefully analyse its worth and its current price. You may look to sell your Sanlam stocks when they double in price, it can imply that you think the stock is undervalued by 50%. It is important that you define a target range because hitting a specific number makes things very complicated. So if you believe you’ve locked in significant gains on your Sanlam shares it may be a good idea to sell.

• A drop in business fundamentals

If you notice over a period of time that Sanlam’s or any other company whose shares you hold are seeing a decline in sales, profits, or key operating fundamentals it may be time to consider selling your stocks. If you suspect the company whose stocks you hold may be committing fraud, financial or otherwise, selling your stocks before the prices plummet may help cut losses. It is important that you keep track of the market situation of the company’s you’ve invested in to ensure you don’t miss out on key happenings that could affect stock price.

• You find another stock with better returns

The future benefits that you may have to forgo when choosing one stock option over another are referred to as an opportunity cost. Before committing to a stock, in this scenario Sanlam, it's essential you evaluate its potential returns when compared to other stock options. If another stock offers better growth prospects or higher returns than your Sanlam stock, it might be wise to consider selling the Sanlam share and switching to the other one.

Determining opportunity cost with precision is challenging, but one example could be investing in a competitor with strong growth potential and a more attractive valuation, such as a lower price-to-earnings ratio. Comparing investments in this way helps maximise the efficiency of your portfolio decisions.

• Post a company merger

The takeover premium—the price at which a company is acquired—typically falls between 20% and 40%. For investors holding a stock that becomes the target of an acquisition with a substantial premium, selling at the offered price may often be the most prudent choice. However, holding the stock post-merger might be beneficial for you if the combined companies' competitive advantages significantly improve. That said, mergers historically have a poor success rate, and the process of finalising a deal can take several months. This was the case with Sanlam’s recent acquisition of ARC FSH which caused Sanlam’s share to fall by 3.5%

Considering the opportunity cost, it may be more advantageous to redirect your investment toward other opportunities with stronger growth potential during this time.

• If the company goes bankrupt

If the company you’ve invested in files for bankruptcy it indicates that the shares have lost most if not all their value. As a shareholder this could indicate that your investment in the company has lost its value. However, selling the stock to realise the loss is crucial for tax purposes, as it can offset future capital gains and a portion of regular income annually.

Although selling after a bankruptcy declaration usually leads to a significant loss, investors might still recover a small fraction of their investment—just a few cents on the dollar. Taking this step ensures potential tax benefits while closing out the position.

When you shouldn’t sell your shares:

Selling shares can sometimes be a knee-jerk reaction to market events or personal biases. Here are some reasons that most experts agree are not great explanations for selling⁷:

1. If the price of the share is declining:

Prices of shares are always fluctuating and sometimes even fall without any change to a business’s value. Impulse selling in the event of a temporary drop can do you more harm than good.

2. The market is volatile

Global events or market downturns often lead to panic selling. However, if the business fundamentals of the company like sales and profit remain sound, these occurrences can often offer the best opportunities for long-term investors to buy quality stocks at lower prices.

3. You’ve read some bad news about the company

Companies often hit temporary setbacks that can cause stock prices to dip. Selling on one piece of bad news can be premature, especially for companies like Sanlam which have good long-term gains.

4. You are trying to time the market

This is very tricky because it can lead to missed opportunities. It is wiser to have a long-term strategy in place and not simply sell with the intention of buying again at a reduced price.

5. Because others are saying so

This may work in your favour at times but can also lead to poor decisions. Your investment strategy needs to be tailored to you and should not depend on what others are doing with their shares.

6. When the share has not-performed optimally in the short-term

Investing is very volatile, and you will see a lot of highs and lows on the shares you hold. Selling based on short term occurrences could lead to future regret. Take Bitcoin for example. It has some good, bad, and great days. So you should be properly informed and have a good idea of the long-term benefits of your decision.

7. Tax is your only concern

Buying and selling of shares needs to be driven by the benefits of the investment. Tax is a very important factor, but it should not be the only thing driving your decision.

8. Emotions are driving your decision

While investing is often driven by emotion, it shouldn’t be the only thing that drives your decision. Listen to your gut of course but be sure that your final decision is a combination of research and market analysis along with a dash of instinct.

For when you want to sell shares that pay out in USD, GBP, or other currencies, use Wise to transfer money back to South Africa in ZAR

If you’re living in South Africa, Wise can help you save money¹ when making international money transfers to South Africa.
Although the majority of banks may allow their account holders to make an international transfer, it is possible that a markup is added to the mid-market exchange rate. It is recommended to check the exchange rate offered by your bank against the mid-market rate, which is similar to the exchange rate shown on Google. Say no to hidden fees!
The mid-market exchange rate is the rate that banks use to transfer money between them and is considered a fair market rate. Find out what you would pay for an international money transfer with Wise:

Wise customers don’t have to pay an additional markup fee but only a small transparent fee to make an international transaction¹. That’s because Wise uses the mid-market rate for overseas payments!

How to sell Sanlam shares

If you've decided to sell all or part of your Sanlam shares, here’s a guide to how you can go about it⁹. Sanlam has designated Computershare as its transfer secretary for the JSE, NSX, and A2X stock exchanges⁹. Computershare maintains the official register of Sanlam shareholders and provides a share dealing service for trading in these shares. This service is available for shareholders in the Sanlam Share Account as well as holders of share certificates. For certificate holders, Computershare will first dematerialise the shares before they are sold.

Key Differences Between Computershare and Stockbrokers

1. Cost: For smaller shareholders, Computershare’s share dealing service generally has lower trading fees compared to stockbrokers.
2. Trading Flexibility: Through Computershare, trades are executed at the best available price via a Sanlam-nominated broker on your chosen stock exchange. By contrast, stockbrokers allow you to set buy or sell price limits for greater control over your transactions.

Transferring shares between the Sanlam Share Account and a stockbroker account may involve additional costs. It’s advisable to consult your broker to understand these costs before making any transfers.

Dematerialisation is Required

In South Africa, you cannot sell Sanlam shares unless they have been dematerialised¹⁰. Once this process is complete, you can sell them through one of the methods outlined below. Certificated shares may still be sold privately (with a change of ownership) or transferred (without changing beneficial ownership). To transfer ownership, both parties must complete a transfer form (available from Computershare) and submit it along with the share certificate, proof of payment for the Securities Transfer Tax (if applicable), and other required documents via registered mail to Computershare.

Ways to Sell Sanlam Shares⁹

1. Selling Through Computershare’s Share Dealing Service
   If your shares are in the Sanlam Share Account, you can sell them by contacting Computershare directly. The process involves security checks, including a series of verification questions. The fee for selling shares via this service is included in the administration cost of the transaction.
2. Selling Through a Stockbroker
   Stockbrokers can assist with selling your shares, but you’ll need to have an account that meets FICA requirements. If your shares are held in the Sanlam Share Account, you’ll need to confirm their location in Computershare’s CSDP before proceeding. Note that selling through a stockbroker may incur additional costs.
3. Private Selling
   In certain cases, you may sell your shares privately to a willing buyer, such as a family member, business partner, or another interested party, at a mutually agreed price. Both parties will need to complete a transfer form (available from Computershare) and provide the required documentation. The transfer must be submitted via registered mail.

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Sanlam stands as a pillar of South Africa’s financial industry, offering investors a diverse portfolio of opportunities. Whether you’ve held onto your Sanlam shares for years or are new to the game, deciding when and how to sell them is an important step in your investment journey.

This guide has broken down everything you need to know—from determining the right time to sell, understanding the importance of business fundamentals, and avoiding common mistakes, to navigating the practicalities of selling your shares through Computershare, stockbrokers, or private transactions.

When it comes to selling shares, remember it’s not just about the market—it’s about your goals. Are you locking in gains, rebalancing your portfolio, or seizing a better opportunity? Each decision should align with your broader financial strategy. And if your shares pay out in foreign currencies like USD or GBP, use Wise to send ZAR back to South Africa at the mid-market exchange rate.

Join Wise!

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Sources:

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5. About Sanlam
6. When to sell shares
7. When to not sell shares
8. Sanlam share price fall
9. How to sell Sanlam shares
10. Dematerialising shares