CAPE TOWN: Investec Asset Management, a unit of Investec Plc that oversees about $70bn, said some of its funds exited Absa Group Limited. and reduced holdings in Standard Bank Group Limited after valuations became ”stretched.”
”By the middle of the year it had become clear to us that the market‘s expectations for bank earnings both this year and next were too high,” Chris Steward, head of financials at the Cape Town-based money manager, wrote in a report e-mailed today. ”The potential for disappointment was significant.”
Standard Bank, Africa‘s largest lender, is retrenching more than 2,000 staff after costs continued to rise and revenue remained muted even after South Africa‘s central bank cut interest rates to boost consumer spending. Absa, the country‘s biggest retail bank, on August 5 said it expects costs to increase by more than inflation and that second-half revenue growth will be ”subdued.”
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