This year’s best and worst JSE stocks

The FTSE/JSE All Share Index ended October 4.8% in the red (-9.5% year-to-date), as the local market tracked major global equity markets lower. Among the index’s large-cap constituents, British American Tobacco (-13.4% month-on-month), BHP Group (-13.0% MoM), Richemont (-9.9% MoM), Glencore (-8.0% MoM), and Annheuser Busch InBev (-7.0% MoM), recorded significant share prices drops, while Naspers and Prosus rose by 6.8% and 5.5% MoM, respectively.

The Resi-10 plummeted 11.4% MoM (-3.9% YTD), followed by the Fini-15, which was down 6.1% MoM (-39.7% YTD). The Indi-25 closed in positive territory, recording a slight gain of 0.3% MoM (+6.0% YTD), pulled higher by positive performances from Naspers and Prosus.

The rand ended the month at $16.24/US$1 – up about 3% vs the greenback, although YTD the local unit is still down about 16% against the dollar.

Top-20 YTD performers (to end October 2020)

Source: Anchor/Bloomberg

While gold fell for a second straight month in October, the price of the yellow metal is still up 23.8% YTD, on the back of increased global risk brought about by the pandemic, and continued monetary stimulus pushing gold’s rally as a risk hedge.

It is therefore not surprising that the three best-performing shares YTD all come from the gold sector (and are unchanged for a fourth-consecutive month). Overall, for the year to end October, five of the ten best-performing stocks are gold and platinum counters – DRD Gold, Pan African Resources, Goldfields, Harmony Gold, and ARM.

DRD Gold (+136.4%) was once again the best-performing share YTD and, in October, it reported a 45% rise in its gold production for the quarter ended 30 September. The company flagged a potential interim dividend as sales jumped by more than half in its 1Q21 and the gold price topped R1.00 million/kg. DRD Gold was followed by Pan African Resources (+94.4%), and Gold Fields (+80.1%).

Cartrack, Textainer, and Harmony Gold are up 66.5%, 64.6%, and 55.8% YTD, respectively. In mid-October, Cartrack, the fleet-management and stolen-vehicle recovery services provider, said that it has more than quadrupled its interim dividend after reporting that the Covid-19 pandemic failed to dull interest in its software. The Group opted for an interim dividend of ZAc87/share for the six months to end-August – up about 30% YoY, while revenue grew by 16% YoY to R1.08 billion. Cartrack also said that it had added 13% more subscribers despite the pandemic, bringing the total number to 1.17 million.

Harmony Gold was followed by Prosus (+54.4% YTD), which saw its share price jump 5.5% in October. Last week, Prosus announced a $5 billion (R82 billion) share buyback programme whereby Prosus, the consumer internet arm of Naspers (+38.0% YTD), will buy back shares as it looks to help close the gap between the value of its underlying assets and its shares.

ARM and Blue Label Telecoms rounded out the 10 best-performing shares YTD, with share price gains of 39.0% and 36.8%, respectively.

Bottom-20 YTD performers (to end October 2020)

Source: Anchor/Bloomberg

October’s 20 worst-performing shares YTD were basically unchanged from September, with only Sasol (-72.3% YTD) and Ascendis Health (-63.8% YTD) entering the ring, while Arrowhead Properties and EOH Holdings exited. In addition, ten of the 20 worst-performing shares were from the beleaguered listed property sector.

City Lodge (-96.5% YTD), which has seen limited trading in its shares over the past seven months, claimed the worst-performer title for a third month in a row. This, as the Covid-19 induced lockdowns and a difficult local economic environment continued to take their toll on the company’s fortunes.

In July, City Lodge was compelled to raise R1.2 billion through a rights issue in order to pay down debt and prop up its balance sheet. This after asking its bankers in June for an additional R200 million, which pushed the company over agreed lending limits.

City Lodge was followed by UK and European shopping centre owner, Hammerson plc (-93.9% YTD), with Nampak (-87.6% YTD) remaining in third position. In October, Hammerson, which owns shopping centres in the UK and Europe, said that rental collection was steadily improving as tenants resume operations after the lockdown. However, this was prior the UK’s announcement last week that it would be resuming lockdowns on 5 November to combat a second wave of Covid-19.

Nampak was followed by PPC (-78.8% YTD), Fortress REIT -B- (-77.9% YTD), Vukile Property Fund (-75.3% YTD), Attacq (-74.9%), and Redefine (-73.7% YTD), with Sasol (-72.3% YTD), and Tsogo Sun Gaming (-71.8% YTD), rounding out October’s ten worst-performing shares YTD.

Marco de Matos is a research analyst at Anchor Capital.