Look for Investec in platinum shares
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.