File photo: Simphiwe Mbokazi

Absa shed as much as 3.4 percent after Morgan Stanley downgraded the shares to sell from hold.

Shares fell as much as 3.37 percent on Friday, and closed 2.56 percent down at R161.75.

The lender, with a market value of R116 billion, has lost 1.8 percent this year.

Barclays said on December 6 it would increase its stake in Absa to 62.3 percent from 55.5 percent and combine its African operations with the Johannesburg-based lender to boost growth across the continent.

Since Barclays announced it would buy 129.5 million Absa shares, the local bank’s stock has gained as much as 12 percent.

“We now see the shares as fully valued, discounting both the special dividend impact and the price paid for the deal,” said Greg Saffy at Morgan Stanley’s local joint venture, wrote in a note to clients on Friday.

There was scope for a special dividend of about R7.50 a share. Renee Bonorchis – Bloomberg