A negative endowment
The Ingham Analytics note on South African banks entitled “COVID-19 coup de grâce for banks” was well-timed and a popular note for readers. Now, they have issued “A negative endowment” following on from the interest rate cut this week. Ingham Analytics have repeatedly warned about exposure to banking stocks in several notes and they say the recent cuts in interest rates reinforce their bearish stance. In addition to other factors weighing on the banks they also examine why falling interest rates have what they refer to as a negative endowment effect.
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