Investors fear run on Capitec after Viceroy report
Viceroy’s report seems to be dragging shares in Capitec and by extension on Capitec as well. Capitec is down as much as 13 per cent in intra-day trade while PSG was down 12.7 per cent. Both shares were also down by close of markets yesterday.
Tue, 30 Jan 2018 11:26:53 GMT
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AI Generated Summary
- The release of a report by Viceroy drawing parallels between the defaults in Steinhoff and Capitec has led to a sharp decline in the share prices of both entities.
- The report accuses Capitec of engaging in fraudulent practices, including 'rolling over loans' and overstating assets, raising serious questions about the bank's financial health.
- The looming prospect of a run on Capitec has sparked panic among investors and depositors, prompting calls for intervention from regulatory authorities to shore up confidence in the banking sector.
Investors were left rattled today as shares in Capitec Bank tumbled over fears sparked by a recent report released by Viceroy. The report drew comparisons between the defaults in Steinhoff and Capitec, leading to concerns about the stability of the financial institution. David Shapiro, Deputy Chairman of Sasfin Securities, shared his insights on the matter, highlighting the gravity of the situation and the potential impact on the banking industry. Viceroy's conclusion that Capitec is 'uninvestable' due to alleged fraudulent practices has sent shockwaves through the market, causing a massive sell-off and a sharp decline in the share prices of both Capitec and PSG. The report accuses Capitec of 'rolling over loans' and overstating assets, painting a grim picture of the bank's financial health. The prospect of a run on Capitec is now looming large, with depositors understandably anxious about the safety of their funds. Calls for intervention from the South African Reserve Bank and the finance minister have grown louder, as authorities seek to restore confidence in the banking sector. The implications of this report are far-reaching, with the systemic risk posed by Capitec's potential collapse sending shockwaves through the industry. It is imperative for swift and decisive action to be taken to address these concerns and prevent a full-blown crisis from unfolding.
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