subscribe Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Subscribe now
Picture: REUTERS/ESA ALEXANDER
Picture: REUTERS/ESA ALEXANDER

Mark du Toit, portfolio manager: OysterCatcher Investments

Buy: Standard Bank (SBK)

South Africa’s GDP is expected to improve on the back of reduced load-shedding and improved rail and port logistics, coupled with improving investor confidence stemming from the government of national unity and continuing policy reforms. Expected interest rate cuts and an improving credit cycle mean additional tailwinds for the South African banking sector. Standard Bank is well placed to benefit because of its large scale in both retail and commercial banking. This will more than offset the effect of translating the earnings from its Africa operations into its rand reporting currency. Steady earnings growth, an improving return on equity plus a 7% dividend yield make Standard Bank an attractive investment.

Sell: Vodacom (VOD)

Telecom businesses are asset heavy and require continual capital investment in their own infrastructure. This, coupled with competitive pressure on pricing, means it is difficult to grow earnings meaningfully over the medium term. The Vodacom share price has rallied recently and there are better returns to be made in other South African listed equities.

subscribe Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Subscribe now

Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.

Speech Bubbles

Please read our Comment Policy before commenting.