The JSE is near record highs – while the economy crashes and burns
The South African economy is old, mouldy toast.
It shrank by 7% in 2020 – its worst showing on record – yet the Johannesburg Stock Exchange (JSE) is up 58% year-on-year (12 March 2020 to 12 March 2021).
The performance of the JSE is not strongly correlated with the SA economy, as most of the Top-40 companies make the bulk of their earnings abroad.
Some of the country’s smaller companies are very reliant on the domestic economy, but they make up a tiny portion of the overall value of the JSE.
The Money Show’s Bruce Whitfield asked personal financial advisor Warren Ingram (Galileo Capital) to explain.
There is economic devastation, increasing unemployment and people taking pay cuts…Warren Ingram, Personal Financial Advisor - Galileo Capital
The top-four shares on the JSE account for 52% of the value of the entire stock market. Naspers accounts for 20%... BHP is just over 12.5%. Richemont is just over 10% while Anglo is also just over 10%...Warren Ingram, Personal Financial Advisor - Galileo Capital
The largest business [that earns a significant share of its income in South Africa] is FirstRand; it makes up only 3.5% of the JSE. The bulk of the Top-10 earns a huge chunk of their money outside of South Africa…Warren Ingram, Personal Financial Advisor - Galileo Capital
We’re seeing an element of Darwin at work. Survival of the fittest… The remaining businesses have trimmed excess fat… As the bad news ends, life becomes much easier for them… We’ve got superfit companies that have only known tough times, and suddenly there’s no headwind…Warren Ingram, Personal Financial Advisor - Galileo Capital
Listen to the interview in the audio below.
Source : https://www.123rf.com/photo_98751652_jse-limited-previously-the-jse-securities-exchange-and-the-johannesburg-stock-exchange-is-the-larges.html
"Affordable classics have grown for the last seven years – even last year," says John Tallodi of Classic Car Passion South Africa.Read More
"The money is safe and waiting for you to come forward," says Kabelo van der Merwe of Unclaimed Benefits at Liberty.Read More
This time it’s worth filling up. Transport economist Ofentse Mokwena explains the reasons behind the record fuel price hike.Read More
How much do you need so you can live off your investments? Certified Financial Planner Paul Roelofse shares a few formulas.Read More
The Money Show’s Bruce Whitfield interviews Nomi Bodlani, Head of Strategic Markets at Allan Gray.Read More
"The cheapest car is a Suzuki S-Presso," says motoring journo Alex Parker. "I drove one; it’s much less terrible than I thought!"Read More
The Money Show’s Bruce Whitfield interviews Sun International Group CEO Anthony Leeming.Read More
It aims to enrol 56 000 students by 2026. The Money Show’s Bruce Whitfield interviews Stadio Holdings CEO Chris Vorster.Read More
Its competitors are paying dividends. The Money Show’s Bruce Whitfield interviews Absa Group CEO Daniel Mminele.Read More