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In this week’s episode of Ghost Wrap, we play rock paper scissors (well, almost):
- Rock: AngloGold, Pan African Resources and Impala Platinum showing us that times are tough in mining.
- Paper: Mondi and Sappi reflecting highly cyclical numbers, with Mpact delivering really strong results in this period.
- Scissors: a sharp set of numbers came in from Spur and Standard Bank.
Listen to the podcast below:
Morning,
This might sound like a stupid question but am I correct in assuming that banks and financial sector stocks should profit more as a result of an increase in the REPO rate?
Thanks.
Correct, but take note that bad debts also increase during rising interest cycles. Though banks usually provide sufficient for this.
There’s a tipping point at which the benefit of another hike is more than offset by the increase in credit losses. The banks generally seem to agree that we’ve reached that point. Things need to ideally just stay as they are now.