JSE outperforms most markets in 2011

6 January 2012

Comparing year-end values, South Africa’s stock exchange showed little movement overall in 2011, but held firm – and in doing so was one of the better performers in a turbulent year for equities worldwide, Moneyweb reports.

The JSE’s benchmark Top 40 index gave a marginally negative return of 0.59% in 2011, while at close of play on 30 December 2011 its All Share index was down by 0.41% compared to 30.12.2010.

Global markets hammered

But, as Moneyweb’s David Carte pointed out, these losses pale against the -52.9% suffered by investors on the Athens stock exchange, or the -18.3% of the Eurostox 50.

“You thought that Germany had come through Europe’s crisis relatively unscathed? Well, Germany’s DAX was down by 15.6%,” Carte wrote.

“But who is not surprised that the Hang Seng in Hong Kong gave a negative return of 19.8%? And that the Nikkei in tsunami-rocked Japan gave investors a negative 17.3% return.”

The FTSE 100 index of UK companies fell 5.6% over the 12-month period, “while in the US, the Standard & Poors 500 gave investors a positive return, albeit a measly one of 0.41%.”

Local winners, losers

Investors in certain sectors of the JSE were fairly well rewarded in 2011 – among them, oil and gas producers were up 11%, food producers up 13%, and industrials up 6%.

Conversely, it was a bad year for the JSE’s construction stocks (down 26%), and for platinum (-28%) and mining in general (-11%), despite a strong showing from coal (+22%).

According to Business Day, the JSE attracted 16 listings with a combined market capitalisation of more than R35-billion in the course of 2011, while about 15 companies delisted.

New CEO looks to grow products, services

Nicky Newton-King, who this week became the first woman CEO of the JSE, told Business Day that the exchange would be looking to offer more access to African companies in 2012, as well as products such as exchange-traded funds that opened access to new investments.

With South Africa’s rules of inward listing having been relaxed, “we would also like to attract more inward listings”, Newton-King said.

In October, the National Treasury announced that local investors would be able to trade in foreign-domiciled companies listed on the JSE, boosting the status of South Africa’s bourse as a springboard for foreign companies to expand into Africa.

Previously, the JSE could not include foreign companies in the exchange’s indices, as local investors weren’t able to buy shares in these companies without restriction.

SAinfo reporter