A NASTY HANGOVER

One of SA’S top asset managers, Allan Gray, has decided that stocks are the place to be this year, rather than keeping money in cash. After a blowout last year, when the JSE’S all share index tumbled 11.4%, history suggests there could be a big recovery i

fter all the wailing and gnashing of teeth on the JSE in

2018, the all share index (Alsi) was down around 11.4%. To put things in perspective, that wasn’t half as bad as the financial crisis meltdown in 2008. Still, the raw numbers do not fully convey that there was something ominous and foreboding about the local market in 2018 — and these investor jitters were still prevalent in the first few days of trading in the new year.

Last year, stocks that might be considered “default positions” offered little reassurance. Technology conglomerate Naspers — which, at a market value of R1.2-trillion, makes up nearly a fifth of the JSE’S entire value — fell 16%.

Other popular shares to haemorrhage included Standard Bank (down 8.6%), cellular services provider Vodacom (down 9.4%), insurer Discovery (down 14%) and life company Sanlam (down 8.3%).

Sasol, probably the stock owned by most South Africans, dropped 0.7%. But Coronation Fund Managers (a proxy for sentiment on the JSE) plunged over 40%, from R73.90 to R41.35. And Coronation has also started 2019 on a shaky footing, as it threatened to dip below the R40 mark.

The JSE Limited itself, which operates the largest local bourse (yes, there are a few

JSE’S

smaller rivals now), rose by 7.6% in 2018, which probably reflects the fact that market volatility is a boon for trading volumes.

Still, the overriding sense is that investors have to hold tight for a bumpy ride, at least until after the elections in May. Already, radical and divisive political rhetoric is starting