Capitec on top in South Africa

South African equities have had a strong performance, with Capitec leading the way over the last 12 months.

According to Nedgroup Investment’s latest pulse, June closed out the first half of 2024, with the economy proving turbulent.

However, it was supported by increased control over inflation and subsequent investor confidence.

“The strength of global equities year to date in 2024 can partially be attributed to idiosyncratic market drivers, such as generative artificial intelligence or AI,” the group said.

In June alone, South African equities increased by 4.1%, far above the 2.3% in Global Equity.

Over the second quarter of 2024, South African equities increased by 8.2%, while Global Equity only increased by 3.0%.

“Looking ahead, we expect economic resilience to continue, particularly in the US, which could mean a recession is averted.”

“Financial conditions may start to loosen throughout the period, which will help support economics more broadly.”

Bank of America’s (BofA’s) latest fund manager survey also showed that 59% of managers are bullish on equities despite the ongoing uncertainty surrounding the GNU talks at the time of the survey. Much of this uncertainty had to do with the makeup of the Cabinet, which has now been resolved.

In the BofA survey, 71% of managers said they are optimistic about equities for the next three to five years, while 82% said they are likely to bring back offshore funds if domestic returns look superior.

Looking at a sector-specific level, fund managers preferred banks, software and metals& mining.

Best performing shares

Nedgroup also broke down the country’s best-performing shares.

Capitec has been the best-performing share, with a 67.7% year-on-year increase.

The jump follows a strong performance from Capitec, which increased headline earnings by 16% to R10.5 billion in the year ended 29 February 2024.

Mr Price saw the second largest year-on-year increase at 42.8%, while Sanlam’s 28.7% got it in the top three.

TFG, Clicks, Aspen, Shoprite, Investec (Ltd and Plc) and Mondi also made the top 10, with all shares increasing by over 20% in the last year.

In June alone, TFG saw the most significant increase at 34.2%, followed by Capitec’s 23.4%.

Financial institutions and retailers also performed well in June, with Discovery, Firstrand, Standard Bank, Old Mutual, Clicks, Mr Price, Bidvest and Sanlam all seeing their hair prices increase by over 14% in a month.

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Worst

Sasol’s share price has dropped 40.8% on the other end of the scale.

Sasol has faced a volatile macroeconomic environment, which included weaker oil and petrochemical prices, unstable product demand and continued inflationary pressure. There have also been concerns over the group’s commitment to lower its pollution levels.

MTN has also seen its share price drop by 38.5%.

Despite MTN increasing its revenue and customer base in 2023, its earnings and profits dropped significantly due to the massive devaluation of the Nigerian currency.

Platinum miners Sibanye, Amplats, and Implats have also dropped their share prices substantially. All three are retrenching thousands of workers amid massive drops in PGM prices.

Vodacom, Woolworths, Johann Rupert’s Richemont, British American Tabacco and Discovery, which was one of the best-performing shares in June, completed the top 10.

On a monthly basis, Sibanye was the worst performer, with its share price dropping 16.5%.

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