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ABIL price takes heat

The African Bank share price was caned yesterday, the trading update not matching with the last sales update and perhaps the expectations and the bench mark had been set a little high. Like I said yesterday, I do not get too anxious about it. The analyst community suggests that by September 2013 the company would have earned around 430 cents per share, with a dividend payout of around 260 cents. So a couple of years out with a twelve times or so earnings applied I get to about 50 ZAR a share. And if they pay 260 cents then at that level they will yield above five percent. So should we be buyers in the mid thirties? Yes is the short answer.


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