Investec could be the darling for SA bank stocks in 2019
Prospects for the country’s banks will be tied to the wider performance of the economy
The prospects of the country’s banks will be tied to the wider performance of the economy in 2019, with Investec possibly offering the most value at the moment. Harry Botha, banks analyst at Avior, said Investec appeared to be the most attractive from a valuation perspective. The Investec group has three operating divisions: asset management, wealth and investment, and specialist bank. For the specialist bank, Botha expects operating earnings to grow by 21% for the current financial year (to end March) and 10% for financial year 2020. Patrice Rassou, head of equities at Sanlam, says the bank is trading at almost half its book value. On the current share price of R80 a share, Rassou says that investors are buying the specialist bank for R35 a share when it has a net asset value of R64 per share. “So it looks really cheap,” he says. Botha expects improved economic activity after the elections as a result of more policy certainty, especially regarding land reform. “That should start to...
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