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FIRSTRAND LTD

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FSR trade ideas

Our opinion on the current state of FSRFirstRand (FSR) has five divisions - First National Bank (FNB), Rand Merchant Bank (RMH), Wesbank, Ashburton (in the UK) and Aldermore. It operates in 10 African countries, has platforms in Africa, Asia and Europe. It also has representative offices in Dubai and Shanghai. FNB has a branch in India. The company was founded by Laurie Dippenaar, G.T. Ferriera and Paul Harris in the 1970's. With a market capitalisation of about R385bn it is by far the largest banking group in South Africa. FNB offers a diverse range of banking products to consumers, small and large businesses and government departments. Wesbank is the largest asset financing company in Southern Africa covering vehicles of all types, both private and consumer as well as aviation assets and agriculture. RMH offers corporate and investment banking in 35 African countries. Banking shares in general have been taking strain in the current economic environment, but FirstRand has benefited from its strong focus on innovation and technology. All banks are now benefiting from rising interest rates. The full impact of the coronavirus on its performance is unknown at this time, but it appears that FNB gained market share in this difficult environment and has weathered the storm very well. In its results for the year to 30th June 2023 the company reported headline earnings per share (HEPS) up 12%, a return on equity (ROE) of 21,2% and a credit loss ratio of 0,78%. The company said, "The 12% increase in the group’s normalised earnings was driven by good topline growth, reflecting continued momentum in new business origination in all large lending portfolios, ongoing growth from the deposit franchise and the performance of the group’s transactional franchise (measured by customer growth and volumes)". In a trading update for the six months to 31st December 2023 the company reported, "The group expects earnings growth of real GDP plus CPI plus >0% to 3%. ROE will remain at the upper end of the targeted range of 18% to 22%". In our view, this is a very solid secure investment trading at a good price. On a P:E of 10,05 and a dividend yield of 4,67% it looks like good value. In May 1989, you could have bought this share for 15c and today it trades for around R66.00. It is a long-term performer that has shown its resilience to economic recessions and political uncertainty. Technically, the share has broken strongly up out of the "island formation" it was in after the advent of COVID-19.
JSE:FSR
by PDSnetSA
#FSR perhaps a little much for now - time for reversal? #JSEFirst Rand made a lovely pin bar reversal off support on Monday and subsequently followed through today. I like this one as a long here with a stop below R60.00 and a target back to the 50% fib of recent high and low which also coincides with its yearly pivot point (=- R67.00). Also note bullish divergence where RSI is making higher lows even though price made lower lows warning of a rally to come. Trade idea: Buy R61-R62 Stop loss, move below R60.00 Target R67 Risking R1/R2 to make R6 for a 6 or 3 to 1 risk reward Note: 200dma at R65.83 could also be used as a target
JSE:FSRLong
by MarcoOlevano
FirstRand - Area of interest- Price has pulled back from its recent swing high of R74.75 - Currently in a support zone where i will look to open a starter position and add to as the price action develops. - RSI deeply oversold with a relief bounce likely. - Only below R60 do i turn bearish on the overall picture. The Relative Strength Index (RSI) is a popular momentum indicator used by traders to evaluate overvalued or undervalued conditions in the price of a security. It measures the speed and magnitude of a security’s recent price changes and is displayed as an oscillator on a scale of zero to 100. The RSI can provide insights into bullish and bearish price momentum, and it is often plotted beneath the graph of an asset’s price. Traders use the RSI in various ways to support their trading decisions. Here are some common applications: Overbought and Oversold Conditions: An RSI reading of 70 or above indicates an overbought situation, suggesting that the security may be due for a price correction1. Conversely, an RSI reading of 30 or below indicates an oversold condition, suggesting that the security may be undervalued and due for a potential rebound. Trend Reversals: The RSI can help identify potential trend reversals or corrective pullbacks in price1. Traders look for divergences between the RSI and the price chart to spot potential shifts in market sentiment. Buy and Sell Signals: Traders often use the RSI line crossing below the overbought line or above the oversold line as a signal to buy or sell1. However, it’s important to note that the RSI works best in trading ranges rather than trending markets. It’s worth mentioning that the RSI is just one tool among many used by traders. It is often used in conjunction with other technical indicators to develop comprehensive trading strategies.
JSE:FSRLong
by Trader-Dan
Firstrand: Overcooked & overdone It's me and the banks again... FSR has been extremely strong and has stayed in overbought territory for an over extended period now. Momentum is waning and I think a decent dip is on the cards. Something has to give...We are starting to see price congestion with little to no impetus at these levels. I'm willing to wager that she bumps her head here at the 50 day moving average and I will not be surprised at all to see a drop back down to 60.50...
JSE:FSRShort
by RobbyP
2