JOHANNESBURG - The recent rally in banking shares came to a halt yesterday morning when South Africa’s top five banks opened lower on the JSE, with analysts attributing the move to a self-correction in the market.
Capitec Bank declined the most, shedding about 8.48percent yesterday afternoon to R938.39 a share - but closing 7.97percent lower at R943.90 - while FirstRand recorded the lowest fall, only down by 3.09percent to R68.08 a share - but closing 4.34percent lower at R67.20.
Barclays Africa Group dropped by 3.23percent to R177.54 - but closing 4.07percent lower at R176 - a share, with Nedbank declining by 2.95 percent to R271.42 - but closing 4.34percent lower at R267.53 - a share.
Standard Bank was also down by 3.79 percent to R200.84 a share - but closing 4.19percent lower at R200.01.
It was a long shot as compared to last week in which the stocks recorded significant gains with Capitec’s share price peaking at R1074 a share on Friday afternoon, with the banks index increasing by 2.49percent last Tuesday.
Nesan Nair, a senior portfolio manager at Sasfin Securities, said it is more than likely just a correction, even though it was quite a violent one. “We are seeing some profit taking on the rand after a strong rally and even some of the other SA financials like (Discovery/Sanlam) and retailers (Clicks/Shoprite),” Nair said.
Jordan Weir, an equities trader at BayHill Capital, said the local banking sector had been relatively overbought in South Africa in the wake of Cyril Ramaphosa’s victory at last year’s ANC elective conference in December.