Look for In­vestec in plat­inum shares

Finweek English Edition - - Openers -

DUR­ING THE sub-prime cri­sis – which be­gan hit­ting our bank shares very hard, es­pe­cially from Oc­to­ber 2007 – In­vestec (the South African and the Lon­don ver­sions) was un­der huge pres­sure and per­formed poorly against other SA banks. The rea­son?

In­vestec again man­aged to buy some­thing at the wrong time. This time it was Kens­ing­ton, a fairly large build­ing so­ci­ety in Bri­tain. For many months in­vestors in In­vestec won­dered whether there wasn’t per­haps some hid­den bug in Kens­ing­ton. A far larger bug than In­vestec CEO Stephan Kos­eff was pre­pared to ac­knowl­edge. At ev­ery meet­ing he was ir­ri­tated no end by ques­tions about Kens­ing­ton. Dur­ing that pe­riod In­vestec’s share price fell much sharper com­pared to other banks. Up to as much as 60% com­pared with the 40% of the banks in­dex.

Af­ter its latest re­sults and the re­newed as­sur­ance by man­age­ment that there’s no bug even big enough to frighten a baby, In­vestec’s share price has im­proved by nearly 30% over the past few weeks, con­sid­er­ably more than the av­er­age for the bank sec­tor.

Be­tween the plat­inum and other com­mod­ity shares, and pos­si­bly even the min­ing ex­plor­ers, there may be sim­i­lar op­por­tu­ni­ties for In­vestec. Just like the big banks, An­glo Plat­inum and Im­pala are of course the safest for any re­cov­ery. The share price of Aquar­ius al­ready looks bet­ter, partly due to the of­fer for Lon­min.

In­vestors with a big ap­petite for risk could also look at Northam at 5000c, and those with an even big­ger one, at Wesizwe at 500c. It’s best for the time be­ing to keep away from the ex­plo­ration com­pa­nies that only live on prom­ises.

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