SA stock returns since 1900 beat all comers

Through world wars, the Depression and relentless redrawing of national boundaries since 1900, one group of countries gave investors the best stock returns.

Commodity-rich nations such as SA, Australia, the US and Canada enjoyed buffers against global turbulence because of their natural resources, but have developed their economies to rely on newer industries such as financials, technology and services, according to a joint study by Credit Suisse Group and the London Business School, which scanned data going back 117 years.

The study shows that no single industry can provide a lasting competitive advantage. In 1900, 80% of the US stock-market’s value was in businesses such as railroads and nearly half of UK companies are in sectors that didn’t exist a century ago. Gold, once key to SA’s wealth, has waned in importance.

South African stocks have returned an average 7.2%, more than two percentage points above the global average and the most among 23 nations tracked by Credit Suisse and LBS. SA is Africa’s biggest coal and iron-ore producer, and the world’s largest of platinum, manganese and ferrochrome. – Bloomberg