Capitec share price surge takes it beyond any semblance of value

It's almost four years since a visit to the Stellenbosch nerve centre transformed me into a Capitec fan. From the low key offices and modest managers through to its real time management information systems, it was easy to see why Capitec's banking revolution had worked. Looking back it's also easy to understand why the share price surged from R200 when I visited, to R877 today.

But nothing, especially asset values, go up in a straight line. And after chatting through the interim results with CEO Gerrie Fourie yesterday, it looks to me that Capitec share investors have gotten ahead of themselves.

In the past year alone Capitec's market capitalisation has surged from R67bn to R104bn. The shares now trade at an astonishing seven times book value, up from an already lofty 5.4 times a year ago. Firstrand trades at 2.4 times book and Standard at 1.6 times. I'm still a Capitec fan. But at these price levels, certainly not of the shares.