CAPITEC: Digging in their heels
The bank’s short sellers are waiting for its stock to tank, before they give back their shares
Capitec’s war against short sellers Viceroy Research and others is not yet won, with Viceroy expanding on its sour report on the bank and insisting the bank should be placed under curatorship even as Capitec’s shares recover. Safkhet Capital, a US hedge fund also shorting Capitec shares, is also keeping its short position until its investment thesis comes to bear. On Monday, Viceroy hit back at the SA Reserve Bank’s assurances that Capitec was sound, claiming that the bank’s books can’t be relied on. Comparing Capitec with the Bank of America and Citigroup (but without similar analysis of SA banks) Viceroy analysts say Capitec’s longer-dated loan book seems to be "the best performing set of unsecured personal loans in the world", which they deem irregular. "There is almost no delinquency and astonishingly low charge-offs," says Viceroy. Viceroy believes this warrants an R11bn impairment, which will bankrupt the bank. Capitec rejects this. "The Viceroy report presents information tha...
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