Capitec declares 20% increase in dividend

The latest update on Capitec's interim results.

CPI.28.9.2016

Yesterday banking group Capitec posting interim results towards the upper end of its recent trading update with headline earnings per share rising 19% to 1,517c per share. The bank’s active client numbers rose to 7.9 million in the first half (6.7-million a year earlier) as the group expands its local geographical footprint with 31 new branches.

Local economic concerns with a constrained consumer will put the consumer's ability to qualify for credit under pressure and the group has seen an increase of arrears as a percentage of gross loans and advances rise to 6%, from 4.7% a year earlier. The group announced an interim dividend of 450c per share, which is 20% bigger than last year’s interim dividend.

Technical:

This morning we highlight a bearish flag pattern in a downtrend on Capitec, the pattern looks like an inverted flag on a pole and the flag is a small rectangle pattern that slopes against the previous trend.  The height of the flagpole may be subtracted from the breakout area at the end of the flag to determine the expected price target (55200c). Wait for a break and day close below 60000c. Short term stochastic oscillator has reversed, overbought and giving a bearish signal.

The price closing above the top parallel line of the flag would consider the formation to have failed.

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This information has been prepared by IG, a trading name of IG Markets Limited and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. International accounts are offered by IG Markets Limited in the UK (FCA Number 195355), a juristic representative of IG Markets South Africa Limited (FSP No 41393). South African residents are required to obtain the necessary tax clearance certificates in line with their foreign investment allowance and may not use credit or debit cards to fund their international account.