Investec Limited (JSE: INL) delivered strong financial results for the year ended March 31, 2024 (FY24). Headline earnings per share increased by 22.7% to 72.9 pence, supported by growth in lending books and higher interest rates. The group also declared a total dividend of 34.5 pence per share, reflecting a 28% increase.
Looking ahead, Investec expects revenue momentum to continue, driven by loan book growth and client acquisition strategies. However, this is partially offset by anticipated interest rate cuts. The credit loss ratio is expected to remain within a range of 25bps to 45bps.
Technical Analysis
Investec’s share price is currently at 12,352 cents, exhibiting indecision after recent volatile sessions. The share trades slightly above the 50-day SMA (Simple Moving Average), 100-day SMA, and 200-day SMA, with the shorter-term averages positioned above the longer-term average. This indicates a potential bullish bias.
The RSI (Relative Strength Index) sits at 50.43, hovering near the midline. A break above this level could see the price target the 23.60% Fibonacci retracement level (12,533 cents) if the shorter-term SMAs hold as support. A decisive break above this initial resistance, accompanied by significant volume, could bring the major resistance level of 12,914 cents into play.
Conversely, a decline below the SMAs could expose the 50.00% Fibonacci retracement level (12,107 cents) as the initial support zone. A sustained drop below this level could confirm a bearish trend, with the 78.60% Fibonacci retracement (11,646 cents) potentially becoming the next target for the bears.
Summary
Investec’s fundamentals paint a positive picture, with strong financial performance and a potential for continued revenue growth. Technically, the share price is at a crossroads, with a potential upside towards 12,533 cents and 12,914 cents if the bullish momentum persists. However, a breakdown below the SMAs could trigger a decline towards 12,107 cents and potentially 11,646 cents.
Sources: TradingView, Trading Economics, Investec, Business Day.
Piece written by Mfanafuthi Mhlongo, Trive Financial Market Analyst
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