Ashraf Mohamed, portfolio manager at Arqaam Capital, chose Nedbank as his stock pick of the day and Wayne McCurrie from FNB Wealth and Investments chose Sanlam.
Mohamed said Nedbank is trading on similar multiples to Absa and there is an increase in the free float, which should lift the share price in the short term.
“A well-managed business with no balance sheet issues and, since their restructuring a couple of years ago, it’s very well run at the moment. A good time to buy them now as [the share] is trading on a yield of around 7.4%.”
McCurrie has a similar argument to Mohamed.
“Sanlam is at a 4% dividend yield. It is a very well run company; the shares have come under pressure due to a very significant acquisition made in a north African company called Saham. Although we don’t really know the outcome of that, we assume that it was a good acquisition as Sanlam won’t just jump into the water.”