Market Wrap - Stock Pick — FirstRand
Steven Schultz from Momentum chose Firstrand as his stock pick of the day. "Stock pick this evening is FirstRand, I suppose its operating in a very challenging environment but, they have a pretty strong balance sheet at present. It's trading at the bottom of its two-year trading range, the thesis for FirstRand at present is an abundance of liquidity globally so, central banks are obviously going to remain in print mode and as a result we think there's definitely going to be a sustainable carry trade over the coming months if not years. The carry trade we think, is going to support local bond yields if not push local bond yields slightly lower and as a result of our very absent inflation locally. If that does happen, we think that rate sensitive assets like the bank shares and FirstRand for example will benefit from a bit of a rewriting. Base case for us is 17% return per annum for the next three years in our model and I think if you can purchase under R60 its a good buy"