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Johannesburg - Investec chief executive Stephen Koseff may be looking to get his firm on the "front foot" as the global economy moves out of recession but apparently he has not convinced analysts of his firm's growth prospects in the near term.
Following Friday's release of the company's interim trading update, management analysts at BOE Private Clients have retained their "hold" recommendation on the stock.
"Potential regulations on liquidity and proprietary trading are expected to weigh on Investec in the near term," said the firm in a note to clients.
Investec, with its exposure to both the South African and UK banking markets, is under the spotlight as regulators in developed markets look at how best to curb excessive risk-taking in investment banking.
In its nine-month interim trading statement the company reported flat earnings - up 1% on the same time last year, but saw its liquidity position bolstered to around £7.4bn in cash. This was aided by Investec's focus on growing its cash depositor base that gained momentum in 2009 as the bank sought to move from being perceived as "just" an investment bank.
When the company reported its interim statement last week, Koseff gave an upbeat message to shareholders, saying that he was taking the business onto the front foot and would now be seeking out growth opportunities.
There was limited clarity around the bad debt figure that Investec was expecting. The firm said: "Defaults and impairments have continued to increase in line with previous guidance provided."
Analysts have attributed Investec's exposure to the UK property market as something that would weigh on this aspect of the business.
Patrice Rassou from Sanlam Investment Management (Sim) told Fin24.com that he believed the stablisation of the bad debt figure was a positive but that the figure would remain at high levels.
Stockbrokerage Barnard Jacobs Mellet (BJM) said that they believed that Investec was "fairly valued" at present levels but would continue to accumulate the share around the 5 200c a share level.
BJM retained the stock in their core equity portfolio.
- Fin24.com