In March 2002 Naspers traded around R12 per share, and over the next 15 years grew to R3 845 on 17 November 2017. Over the last few years this company, which has by some margin the largest market capitalization on the JSE, has contributed to around half the growth of the total bourse. It was therefore no surprise to see the JSE All Share Index pull back by over 4% in March as Naspers shed a little over 11% during the month. From the share’s high in November 2017 it has retracted by nearly 22%. Interestingly enough the total return of the JSE ALSI is about flat during the same time, which illustrates just how well locally focused companies (financials and retailers in particular) have done as the political sentiment turned positive ahead of, and certainly after, theANC elective conference in December.
The three months from the start of 2018 has been a rocky ride for South African investors and lead to a decline of 6% in local equities. Property securities in particular weighed on market returns as the broad index ended the quarter nearly 20% lower. Much of this was driven by the performance of Resilient and its related companies which more than halved during this time. The bond markets performed well in the light of an improved outlook from Moody’s as well as lower interest rates and ended the quarter 8% higher. Global equities came under pressure in March as a result of uncertainty surrounding the impact of trade wars and US protectionist policies on the large, multi-national tech companies. It lead to a decline of a little over 5% for the quarter when measured in Rand terms. Growth assets (equity and property) underperformed defensive assets (bonds and property) since the start of the year, but over the year ending 31 March local and emerging market equities were still outperformed cash, with bonds leading the ranking tables as the All Bond Index (ALBI) added over 16% for the year. The vast difference in investment returns of the different asset classes, both over the last quarter as well as the last year, illustrates the value of well diversified multiasset portfolios that provides a relatively smoother ride through turbulent markets.
