TRADING UPDATE
Why the market’s not keen to tip a cap to Capitec
Capitec’s expectations of up to 21% headline earnings growth in the six months to end-August failed to impress the market on Thursday, despite analysts saying this was slightly ahead of consensus expectations. Headline earnings per share are expected to rise by between 18% and 21% for the six months to end-August, Capitec said in an update, with the bank closing 0.56% lower at R980.70. This compared to a 2.68% rise in the JSE’s banking index, lifted on the day by upbeat results from rival group FirstRand, and a strengthening of the local currency. The subdued reaction is likely to be due to Capitec’s high price:earnings ratio, which would lead the market to expect growth in the range of 20%, said banks and speciality finance analyst at Avior Capital Markets Harry Botha.
Jaap Meijer, banking analyst at Dubai-based Arqaam Capital, said Capitec’s trading statement was still slightly ahead of consensus expectations. Operationally what it meant was that Capitec is likely to still s...
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