South Africa’s biggest companies have largely shrugged off a weak economy and under-pressure consumers, showing strong stock growth in the first half of the year.
25 of the top 40 companies listed on the JSE have shown an increase in share value since January, ranging between 4.2% and 91.2% – with the remaining 15 companies showing a share price drop of between 0.9% and 19.4%.
Local companies have been battered by a mix of local and international problems in 2019, including South African staples like creeping economic growth, high levels of unemployment and continued pressure from labour unions.
Companies have also had to content with brewing trade wars between the US and China, political confusion around Brexit, and local electioneering.
Despite these pressures, many of South Africa’s biggest companies have emerged victorious – led by the mining sector that has seen its biggest resurgence in more than a decade.
South Africa’s mining groups have seen strong stock price growth in the first half of the year, with the likes of Impala Platinum almost doubling its share value since January.
According to economists, it’s events in international markets that have largely delivered this boon to local groups, with geopolitical tensions spooking investors into safer assets like gold bullion.
Additionally, concerns about iron-ore supplies after shutdowns in Brazil and storms in Australia, have also pushed prices up – while for the platinum sector, companies have profited from soaring palladium and rhodium prices.
Beyond mining, Multichoice Group, which made its debut on the JSE at the end of February, has also seen success on the local bourse, while former parent Naspers has also seen strong growth, off quite a high base.
The local banking sector also proved resilient, with Capitec, Absa, Standard Bank, FirstRand and Investec all weathering the adverse economic conditions and showing growth.
Taking a knock
Several companies have also recorded steep declines in their stock value, including the likes of Sasol, Shoprite, Vodacom and Pepkor.
Pepkor (formerly Steinhoff Africa Retail, or STAR) has continued to suffer fallout from its exposure to the Steinhoff scandal, as well as a number of ongoing legal cases.
Shoprite’s earnings failed to meet expectations due to financial pressures on consumers – a trend that was seen among most retail groups and service providers.
Meanwhile Old Mutual continued to face the pressures of its restructured business and strategy, with news of its chief executive quitting suddenly, pushing it lower.
These are the top performers in the top 40 so far in 2019
These are the worst performers in the top 40 so far in 2019:
The graph below outlines the top 40 JSE performance to the end of June 2019.