SA’s banking stocks will keep climbing, analysts say, having shrugged off earlier market fears around rising bad debts and a sovereign credit downgrade to stage a spectacular comeback in 2016. "With the South African economy appearing to have avoided a recession and GDP numbers now being revised upwards, the top-down forces continue to suggest that banks’ outperformance has further to run," said Richard Schellbach, equity strategist at Citi. The banking sector, which started 2016 "priced for recession", became a clear value play once it became certain that a recession was no longer on the cards, said Schellbach. The JSE banks index – comprising Barclays Africa, Capitec, FirstRand, Nedbank, Standard Bank and Rand Merchant Bank – has been the second-best performer among major indices on the bourse, rising 22.74% in the year to date. It is beaten only by the basic materials index, up 34.32%, and compares favourably with the Top40 index (-6.23%) and its parent all-share index (-2.37%). ...
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