There is a bear hiding on the JSE

Special situations, corporate action and a weak rand have supported a few shares and the Top 40 Index.
The truth is that the market cap of the JSE is concentrated in only a few shares, which often distorts the underlying market sentiment. Image: Shutterstock

It might not look like a bear market when one surveys the JSE’s main indices. At 58 905 points at Friday’s close, the JSE Top 40 Index is only 15% off its 12-month high of above 69 600 points and still 4% higher than its low of September 2021, just about a year ago.

But all the classic signs of a bear market are there. The only reason the bear can’t be clearly seen is because it’s hiding behind the good performance of a select few shares.

The recent big increases in the prices of Naspers and Prosus – two shares that have an abnormally big weighting in the index – come to mind immediately.

Naspers jumps nearly 23% on results and share buyback proposal
JSE breaks through 70 000 points – highest level ever

Naspers jumped 66% from a recent low of barely R1 470 to R2 454 after the Naspers/Prosus group announced its new plan to narrow the discount at which the shares trade relative to the value of their investment in Tencent. Naspers is trading 76% above its 12-month low.

Prosus increased from a low of R690 in May to a high of R1 218 following the announcement at the end of June that the group plans to sell billion of rands worth of Tencent shares and then use the proceeds to buy up the relatively cheap Naspers and Prosus shares in a massive buy-back scheme.

That Prosus increased by 61% from its annual low of less than R680 also supported the index.

The rand

The shares of several large international companies also served to disguise the bear market, largely due to the sudden weakness in the exchange rate. The rand was sitting steady at around R15 per dollar before suddenly crashing to R17.

Sasol is currently trading at more than 70% higher than its annual low.

This comes of the back of the weaker rand, high oil and chemical prices that are benefiting the group, and better performance from its plants in SA and around the world.

Sasol outage means all South African oil refineries are now shut
Rand hits R17 to the US dollar

The weak rand also gave British American Tobacco South Africa (Batsa), AB InBev and Richemont a push. That these heavyweight shares are all trading comfortably above their lows of the past year – Batsa is 38% higher while AB InBev and Richemont are around 17% better than their 12-month lows – is not what investors would expect during a bear market. Interestingly, Datatec is currently trading 83% above its recent low.

Special situations have supported others. The restructuring of assets has seen Remgro deflecting the bear’s attack, and also supported Mediclinic and Distell.

Remgro’s offer for Mediclinic has seen the share price jump to trade at more than 70% its annual low.

Remgro offer for Mediclinic is a ‘done deal’
Is Remgro planning its exit from the JSE?

Share prices relative to 12-month lows 

Price 12m high 12m low Change from low
Datatec                 44                 45                 24 83%
Naspers            2,454            3,013            1,392 76%
Mediclinic                 95                 98                 55 73%
Sasol               333               439               195 71%
Prosus            1,096            1,416               676 62%
Omnia                 76                 88                 49 55%
Astral               189               195               132 43%
MTN               141               211               102 38%
Batsa               705               716               510 38%
Nedbank               204               246               151 35%
Shoprite               203               248               154 32%
Telkom                 42                 60                 32 31%
Pick n Pay                 56                 63                 43 30%
Absa               155               195               123 26%
Remgro               129               155               107 21%
FirstRand                 62                 79                 52 19%
Harmony                 50                 89                 42 19%
AB InBev               932            1,050               796 17%
BHP               417               583               358 16%
Richemont               170               250               147 16%
Karoo               370               620               320 16%
Tiger Brands               154               210               134 15%
Kumba               442               803               386 15%
Dis-Chem                 31                 39                 28 11%
Woolworths                 54                 65                 49 10%
AngloGold               232               434               213 9%
Anglo               517               843               475 9%
Satrix 40                 59                 72                 55 7%
Sanlam                 53                 73                 50 6%
JSE Top 40          58,905          69,628          56,552 4%
Implats               152               309               146 4%
Massmart                 33                 76                 32 3%
Mr Price               170               242               165 3%
Sibanye                 37                 80                 36 3%
Santam               236               316               231 2%
Amplats            1,215            2,675            1,201 1%

Source: JSE data, rounded to nearest rand

Omnia, Astral and MTN also performed well compared to recent lows. Omnia has shown good recovery and declared big special dividends, while Astral is coping with its challenges.


However, the classic signs of a bear market are noticeable. Companies providing basic needs are performing relatively well, as are those classic defensive stocks.

The allure of defensive stocks like BatSA and AB Inbev are withstanding the pressure, while banks, foods retailers and pharmaceuticals are doing well too.

For instance, Nedbank is 35% above its 12 month low, be it 17% below its recent high. Absa is still 26% above its annual low and 21% below its high.

Pick n Pay is only 11% off its high and Woolies some 17%.

Share prices relative to annual highs

Price 12m high 12m low Change from high
Massmart                 33                 76                 32 -57%
Amplats            1,215            2,675            1,201 -55%
Sibanye                 37                 80                 36 -54%
Implats               152               309               146 -51%
AngloGold               232               434               213 -47%
Kumba               442               803               386 -45%
Harmony                 50                 89                 42 -44%
Karoo               370               620               320 -40%
Anglo               517               843               475 -39%
MTN               141               211               102 -33%
Richemont               170               250               147 -32%
Telkom                 42                 60                 32 -30%
Mr Price               170               242               165 -30%
BHP               417               583               358 -28%
Sanlam                 53                 73                 50 -27%
Tiger Brands               154               210               134 -27%
Santam               236               316               231 -25%
Sasol               333               439               195 -24%
Prosus            1,096            1,416               676 -23%
FirstRand                 62                 79                 52 -22%
Dis-Chem                 31                 39                 28 -21%
Absa               155               195               123 -21%
Naspers            2,454            3,013            1,392 -19%
Shoprite               203               248               154 -18%
Satrix 40                 59                 72                 55 -18%
Nedbank               204               246               151 -17%
Woolies                 54                 65                 49 -17%
Remgro               129               155               107 -17%
JSE Top 40          58,905          69,628          56,552 -15%
Omnia                 76                 88                 49 -14%
AB InBev               932            1,050               796 -11%
Pick n Pay                 56                 63                 43 -11%
Astral               189               195               132 -3%
Mediclinic                 95                 98                 55 -3%
Datatec                 44                 45                 24 -2%
Batsa               705               716               510 -2%

Source: JSE data, rounded to nearest rand

Shares in the cyclical metals and minerals industries had no place to hide as global economies are expected to slow down following central banks’ stricter monetary policies.

Amplats, Sibanye-Stillwater, Implats, AngloGold, Harmony and Kumba fell between 45% and 55% each.

Massmart has crashed. It declined by 57% from its November 2021 high of R76.

This comes as investors seemed to shy away from the inherent risk of a retailer that has been struggling for years with different strategies to recover its lost lustre.


Victoria Reuvers, managing director at Morningstar Investment Management SA, wrote in a research note that investors often feel a “sense of betrayal” when markets fall.

“Not only does this create worry and stress, but with it the [belief in the] need to take action and fix the situation,” she says.

“If investors are concerned about falling returns, they may be more inclined to sell rather than hold or buy shares. A sell-off can then trigger further pessimism about market performance, acting as a negative feedback loop that sends the market into decline.”

This behaviour is typical of a bear market, defined as a broad market index falling by 20% or more from a recent high.

“And as of market close Monday, 13 June 2022, the S&P 500 index officially hit bear market territory. It’s down more than 21% year-to-date,” says Reuvers.

Read: Wall Street’s latest bear market may be here to stay for a while

She adds that a bear market is essentially a crisis of investor confidence, the causes of which can vary. The most common trigger of a bear market is rising interest rates, which results in a weak or slowing economy, or the anticipation of an economic slowdown.

The decline of 15% in the JSE Top 40 since its recent high does not quite comply with the formal definition, because of the special situations described above.

The truth is that the market capitalisation of the JSE is concentrated in only a few shares, which often distorts the underlying market sentiment.

Investors holding those shares that have tumbled between 30% and 50% will definitely think the bear is loose.


Reuvers says investors should stay disciplined during periods of market turmoil. “If your goals haven’t changed, neither should your investment strategy.

“The get rich trick to long-term investing is simple – invest your money, sit tight and let it grow over time. That’s also where the added benefit of compound interest starts to work its magic the best.

“If in doubt, look at your investment values and market prices less often. If you have a five-year investment horizon, what good does it serve you to worry about the values in the first year?”

Read: Bear market puts ESG investing to its first big test

Reuvers says investors must “tune out noise”.

“Instant market updates and shocking headlines stream our way via news channels that have access to almost every outlet we consume. The media is designed to evoke emotion. In most instances, we are left feeling worked up and helpless with no clue how to react.

“Remember that markets are forward-looking. By the time you buy the best performing shares on the market, the market has already reacted and priced in its forward-looking view. Not only have you sold out at a low price, but traded them for very expensive shares.

“All your action does is to lock in that short-term loss,” says Reuvers. “The current market conditions and economic environment are both challenging and uncomfortable, but we have been here before and we will be here again.

“Often the worst days in the market are followed by the best days,” she adds.

“Unfortunately, you need to be invested through both the good and the bad to reap the benefits of gaining long-term market returns, which translate into wealth creation over time.”



Sort by:
  • Oldest first
  • Newest first
  • Top voted

You must be signed in and an Insider Gold subscriber to comment.


There are a whole circus troop of bears.

What are we comparing ourselves against? The ZAR, the MSCI World Index, or a stable currency and incorruptible benchmark such as gold?

Since 2012, the JSE All Share is down by 50% against the MSCI World Index while it showed a 40% decline against gold since 2018.

We can create a rosy picture if we want to. We can measure the JSE in terms of Zim dollars.

Always my gripe sensei; quote returns in USD. Having just been to Zim; USD is king.

End of comments.



Subscribe to our mailing list

* indicates required
Moneyweb newsletters

Instrument Details  

You do not have any portfolios, please create one here.
You do not have an alert portfolio, please create one here.

Follow us:

Search Articles:
Click a Company: