In a reaction similar to that when Nhlanhla Nene was sacked as finance minister last December, almost R60-billion was wiped off the value of banking stocks this week when the National Prosecuting Authority announced it planned to charge Finance Minister Pravin Gordhan with fraud. The JSE Africa Banks index slumped 6% this week, taking about R59.6-billion off the market capitalisation of its six constituents, including FirstRand, Standard Bank and Nedbank. The impact of the summons on the banking sector was not as severe as the shock when Nene was removed as finance minister on December 9 last year, which wiped out R145.2-billion in the value of banking shares. This sector recovered, but the move against Gordhan brought the market value of the banks close to the level they were days before Nene was fired, hovering around R845-billion compared with R824-billion in December. "Bank shares are so-called interest-rate-sensitive stocks on the JSE - meaning that banks' performance is genera...
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