UPDATE 1-Boss of South Africa's Capitec buys shares in show of confidence

(Adds CEO stock purchase, share move)

JOHANNESBURG, Feb 1 (Reuters) - Capitec's boss has bought 1.5 million rand ($126,300) of shares in the South African lender, exchange filings showed on Thursday, as he seeks to shore up confidence in the firm after a research report this week sparked a selling frenzy in the stock.

U.S. firm Viceroy Research criticised Capitec's lending practices and said it understated defaults, triggering a brief slump of 25 percent in its shares.

Capitec dismissed the report as "flawed with inaccurate statements," while the South African Reserve Bank vouched for the liquidity and solvency of the country's No.5 bank by value.

Chief executive Gerrie Fourie spent 1.5 million rand on shares in the company on Wednesday, exchange filings showed, a move hailed by one trader as a vote of confidence in Capitec.

"It's a good way of showing that the directors are prepared to take the risk, so why wouldn't the shareholder," said Independent Securities trader Ryan Woods.

Capitec shares rose more than 4 percent to 828.12 rand in early trade, outpacing a flat blue-chip JSE Top-40 index .

The stock was also boosted by news late on Wednesday from rating agency S&P Global, which said the Viceroy report and subsequent market reaction would not affect its BB/B with a stable outlook rating, which falls within the speculative range.

"To date, the bank has experienced only mild funding outflows and its liquidity remains sound," Capitec said in a statement on Thursday, quoting the ratings firm's bulletin.

($1 = 11.8884 rand) (Reporting by Tanisha Heiberg; Editing by Tiisetso Motsoeneng and Mark Potter)