Money and Markets

Three SA companies delivered a 40% return since the start of the year - but most shares bled money

Business Insider SA
The JSE building in Sandton. Photo: Elvira Wood
  • SA shares - already under pressure from a weak local market - have tumbled in the wake of the coronavirus crisis. 
  • A R100 investment in the casino and hotel group Tsogo Sun at the start of the year would  be worth only R14 now. 
  • But gold shares have seen big gains, building on a strong performance from last year.
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It has been an extremely tough few months for investors – but some shares continued to shine amid the Covid-19 crisis.

The JSE’s all-share index is down 13% (in rand terms) since the start of the year – wiping out last year’s 8% gain.

In dollar, the South African market was among the ten worst performers in the world; it’s down almost a third since the start of the year. The rand has slumped, now trading at R17.40/$ from around R14.34 at the start of the year.

Source: Schalk Louw

Still, some local investments have paid off.

David Shapiro, deputy chairman at Sasfin Securities, compiled a list of the best and worst performances so far this year:

Source: David Shapiro

A R100 investment in Gold Fields at the start of the year, would be worth R149 now, while AngloGold (R145) and Harmony (R123) also gained. Gold has seen a big rally this year, and is currently trading close to its highest level in eight years. In times of turbulence, investors typically flee to either the dollar or gold as a safe haven – but the slide in US interest rates has made the dollar less appealing to some. SA gold miners also benefit from the weak rand: they earn their income in dollar, while paying expenses in rand. 

This year’s rally in gold shares built on almighty gains from last year – Harmony and Gold Fields  both almost doubled in 2019.

Two other big JSE-listed gainers so far in 2020 were Prosus (R100 invested would be worth R143 now) and Naspers (R134), as Tencent saw a surge in online gaming revenue with millions of people forced to stay at home during global lockdowns. Naspers-owned Prosus has a 31% stake in the Chinese digital giant.

The pharmaceutical group Aspen (R113) also gained as the company benefited from an 'unusually' high demand for medicines. But Aspen – currently trading at R135 - is still much lower than heights of almost R300 reached in 2018. The company is battling with a big debt burden.

But most SA shares lost large chunks of value so far this year.

A R100 investment would now be worth only R14 if you were invested in the hotel and casino group Tsogo Sun. City Lodge (R29) was also badly affected, as the tourism and accommodation sector shut down during the crisis.

An investment in Sasol would be worth only R25, as the oil price plummeted and its US woes dragged on.

Property landlords Hyprop (R32) and Redefine (R29) saw massive share-price losses as tenants are not able to pay rent during lockdown. Massmart (R43) – owner of Makro and Game – also took a big hit.

In the US market, airlines saw the biggest falls, with a $100 investment in Delta Airlines now worth only $39. But the video meeting company Zoom jumped to ($251).

Source: David Shapiro

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