Hi guys, what do you think will happen to banking stocks in the short term? in specific RMH, FSR, SBK? We had a very good run (last week or so) do you think this is resume after the breather we are having in RMH and FSR at the moment?
I think the banks look good for a buy for now. With better CPI figures, less prospects for a rate hike, Standard in talks with Kenya for more acquisitions. If it goes through share price should rise taking possibly other banks with it.
interest rates may perhaps not continue going up but they wont be coming down for a good while - the banks will benefit from these higher interest rates as they will be earning another 3 percent on there lending - if the banks were charging 10 % on average then that would have gone up to 13% and that means they earn an additional 30 % on there lending book. omo
I agree with what you guys say. Higher interest rates may earn the banks more returns but also there is a trade off between interest rates & bad debts. I work for one of the big four and we are facing an increasing book debt on most of our business - VAF, Home Loans, Card which may render banking stocks unfavuorable in the short term. Also the cost of managing debt during times of rising interest rates is higher than when interest rates are lower.