NEDBANK GROUP (ZA), a company active in the Money Center Banks industry, now shows a lower overall rating. The independent financial analyst theScreener just confirmed the fundamental rating of 4 stars out of 4, as well as the stock market behaviour of the title as moderately risky. However, environmental deterioration penalises the general evaluation, which is downgraded to Neutral. As of the analysis date March 1, 2022, the closing price was ZAR 221.85 and its expected value was estimated at Z...
The general evaluation of DISCOVERY (ZA), a company active in the Life Insurance industry, has been upgraded by the independent financial analyst theScreener with the addition of a star. Its fundamental valuation now shows 3 out of 4 possible stars while its market behaviour can be considered as defensive. theScreener believes that the additional star(s) merits the upgrade of its general evaluation to Positive. As of the analysis date December 28, 2021, the closing price was ZAR 142.91 and its p...
Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
Nedbank's (NED) FY '19 pre-close guidance reflected the impact of challenging operating conditions in SA, as management's guidance for revenue growth and credit impairment charges was disappointing. In our view, NED continues to gain market/revenue share in the SA market. Therefore, we believe NED's performance reflects weak earnings growth opportunities for banks in the SA market in H2 '19. While many of the key trends were similar to management's commentary after the H1 '19 results, the outc...
We rank Discovery's corporate governance as ‘adequate' with a score of 2.84 out of 5. In our FY'19 ESG analysis and proxy voting recommendations we focus on: - The balance of power on Discovery's Board considering the unusually high executive representation and low non-executive independence. - The potential disconnect between executive remuneration and shareholder returns.
A director at Discovery Limited sold 10,000 shares at 123.147ZAR and the significance rating of the trade was 56/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years clea...
• We met with the Guaranty Trust Bank (GTB) CFO last week. Management noted that the bank's operations trends in Q3 ‘19 had been in line with management's guidance after the interim results. In our view, GTB's performance has been positive YTD given the challenging operating environment in Nigeria. However, due to regulatory risks (CBN increasing minimum LDR) and the impending entry of major telcos (e.g. MTN) into the mobile money banking space, we caution that asset quality and the Bank'...
A director at JSE Limited sold 14,000 shares at 131.000ZAR and the significance rating of the trade was 59/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years clearly sh...
A director at Santam Limited sold 2,556 shares at 302.071ZAR and the significance rating of the trade was 54/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years clearly ...
In this week's Avior Financials note: Nedbank's Commercial Property Finance presentation showed that Nedbank's book is suitably diversified to withstand challenging economic conditions. Management expects credit impairment charges to increase to within the CIB target range (15bps to 45bps) while aggregate Stage 3 (default) exposure increases. The trends are in line with our expectations (credit loss ratio H2 '19f: 15bps, H1 '20f: 20bps). Capitec recently conducted a survey and found that 86%...
The valuation of Discovery's (DSY) life insurance business is a point of contestation for investors. Persistent policy alterations and lapse assumption changes have reduced DSY Life's embedded value by R5.3bn (12.3% of the average EV balance) since FY'08. A rise in mortality claims in H1'19 reduced DSY Life's profits by 13% y/y. Despite DSY reporting the largest absolute discounted future profits at R58bn (SLM: R41bn), representing 28% of the SA listed market at 31 Dec ‘18 (SLM: 20%), the ...
A director at Nedbank Group Limited sold 9,200 shares at 217.378ZAR and the significance rating of the trade was 60/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years c...
Nedbank's H1 '19 results showed a reasonable operational performance considering the challenging operating environment in SA in H1 '19. A low base for credit impairment charges in H1 '18 reduced NED's y/y earnings growth. In our view, NED's focus on credit growth, improved cross-sell and cost containment will support mid-to-upper single digit earnings growth over the next three years. We have not factored in meaningful support from the SA economy (FY ‘20f: 0.8% GDP) in our forecast for c.10...
Standard Bank reported a positive set of H1 ‘19 results as diluted HEPS increased 5.7% y/y. Despite the pressures on SBK's SA operations, we believe SBK's operations outside SA will continue to support upper single digit to low teens Group earnings growth over the next three years. We met with Nedbank management (RBB, CIB, Wealth and Rest of Africa teams, and Group management) yesterday and provide our meeting notes. Investec announced yesterday that the Group has received all necessary reg...
The JSE has experienced declining revenues due to lower trading activity. We believe the 15% YTD decrease in cash equity value traded is due to reduced SA business confidence and a global reduction in volatility. The JSE has successfully cut R170m in costs. We expect inflationary cost increases and a normalisation of trading activity to support an improvement in earnings growth. We expect full year earnings to decline with earnings growth recovering in FY ‘20f. However, as the JSE's share...
The South African economy remains in its longest downward cycle since 1945, entering its 67th month of a weakening cycle in Jun ‘19. Annualising the Unemployment Insurance Fund (UIF) payments in Q2'19 implies a 33% y/y rise in terminations in CY'19f. While insurers have broadly reported persistency experience within model assumptions up to Q1'19, the severity of South Africa's economic pressures have intensified in Q2'19 as policy reform has not followed the elections casting doubt on the ba...
We expect the big five SA banks (ABG, CPI, FSR, NED and SBK) to continue reporting earnings growth ahead of SA nominal GDP (forecast 6%) over the next three years. We expect cost containment, retail lending growth, the banks' operations outside SA and SA interest rate cuts (keeping credit impairment charges low) to support earnings growth. We also believe that the diversification of SA banks' corporate lending should result in benign credit write-offs compared to previous cycles. In our view,...
We expect the JSE to report a 28.4% decline in H1 '19 HEPS. In H1 ‘19, cash equity value traded declined by 17%. The JSE has implemented the ITaC system upgrades, which has resulted in increased start-up costs and amortisation expenses. We expect a reduction in capex to support improved free cash flows and potential for a further special dividend in 2020. However, the JSE's outlook remains negative and a sustained improvement in value traded is required to support meaningful earnings growt...
The big five SA banks (ABG, CPI, FSR, NED and SBK) can each earn returns in excess of the cost of capital through-the-cycle given their scale and profitability, in our view, despite numerous new fintech players. In our analysis, Capitec and FirstRand (FSR) achieved the highest franchise scores while ABSA (ABG) received the lowest score. However, we believe ABG is penalised for historic underperformance. Over the last 18 months, ABG has restructured its segments and the management structures, ...
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