African Bank Investments: Hedge fund bets on further declines

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African Bank Investments Limited (Abil), the JSE’s worst-performing stock this month, is pitting South Africa’s largest hedge fund against some of the biggest investors. 36One Asset Management has shorted shares in the largest local provider of unsecured loans in a bet that declines have further to run, according to Jean Pierre Verster, who helps oversee its R4 billion hedge fund. The Public Investment Corporation, Coronation Fund Managers, Stanlib Asset Management and Momentum Asset Management are among shareholders that have boosted stakes this year as Abil seeks to restore profit after a record interim loss. It has lost 52 percent of its market value this year as bad loans more than doubled in the first half, prompting it to cancel its dividend. The lender sold shares to investors in December last year to bolster its capital as unemployment of 25 percent and a shrinking economy left consumers struggling to pay debt. The shares fell 0.99 percent to R9.01 yesterday. – Bloomberg

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