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JSE stocks plunge the most since 1997 in ‘panic’ sell-off

Naspers fell 7.1%.

South Africa’s benchmark stock index plunged the most since the market crash of October 1997 as reaction to U.S. measures aimed at curbing the spread of the coronavirus accelerated the sell-off sweeping through global equities.

The FTSE/JSE Africa All Share Index sank as much as 9.3% as of 3:34 p.m. in Johannesburg. Naspers Ltd., South Africa’s biggest stock, fell 7.1% to weigh heaviest on the overall market. Mining stocks plummeted 14%, set for a record decline. All but three of the benchmark’s 158 members were lower Thursday as selling by risk-averse investors spread to all sectors.


“It’s all panic selling right now,” said Rene Hochreiter, an analyst at Noah Capital Markets Ltd. in Johannesburg.

Fuel and chemicals producer Sasol Ltd., among companies worst affected by the sharp drop in oil prices amid concerns about its debt levels, posted further heavy losses, falling 40%. It has plunged 80% in four days.

“It’s broad-based, indiscriminate selling,” said Seleho Tsatsi, an analyst at Anchor Capital in Johannesburg.

© 2020 Bloomberg L.P.

Developing story.

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Wow, just wow!

Downgrade all but certain unfortunately,

Hang tight boys….

At least there is something ‘broad-based’ that works in SA.

Eish – I think the JSE dropped much more after US travel restrictions and also Wall Street convinced all that this sort of disaster could happen anywhere in the world and that all economies around the world could be crippled from a virus, and don’t necessarily need a stock market bubble to do that.

I have always believed it’s very hard to know for certain when a market is overvalued or undervalued and that you can’t fight market forces – the Coronavirus doesn’t leave any doubt about the dangers despite some very strong economies around the world and in some cases (the US), stock prices started to embody expectations so exorbitant that they could never be met.

Market reactions during the last 24 hours just revealed how clueless we were about the threat that the virus posed to financial markets.
I am getting concerned that the market driver, the Dow Jones and the S &P 500 can break through a few ‘’ millennium marks’’ if this problem is not resolved soon.
Nobody really knows what is going to happen from here and after I have worked through and witnessed a few of these crashes (starting in 1987 in London in my FX dealing days), and I no better by now not to try and convince anybody on the basis of back-of-the-envelope figuring!

So sad that people don’t think rationally when it comes to stock and threats of a virus infecting people all over the world. If it wasn’t for the media hype around the Corona virus, pulled completely out of proportion, things could have been normal. Even in a bull market, still, but oh! the sheep mentality!

As the sell-off in shares worldwide deepens, I would like to appeal to all local and international “professionals” who have repeatedly criticised Warren Buffets large cash pile to come forward and state their cases again!! Gotta love Buffet and Berkshire. Truly the worlds greatest investor and all round great person. His biggest problem now is deciding which companies to buy.

I hope you didn’t follow your own “Buy buy buy” advice when the JSE ALSI was at 50K earlier this week.

Look, I agree with you in all aspects. He is a great person and he is seen as the best investor. But as informed individuals, we should always search for perspective. Berkshire Hathaway, priced in terms of ounces of gold, not in terms of the dollar, is 37% lower than in 1998. The oracle of Omaha showed negative real growth over a time span of two decades.

Clearly, the performance of Berkshire Hathaway in dollar terms should be ascribed to the Chairman of the Federal Reserve, and not to Mr Buffet. Looking at these facts, I am inclined to say that the average zamma-zamma who mines for gold may have stumbled upon a better idea.

Sensei…was just wondering if you know of any “zama zama’s” sitting on 120 billion dollars at the moment? Or in gold terms which you love so much and by my rough calculations…727 000 ounces of bullion? Spin it any way you want, Buffet has spent his entire life on the simple philosophy of not following the herd, and not buying when markets are high. Berkshire is going to go to town with this sell-off….as they have done for decades and countless previous sell-offs.

@PJJ. If you follow my comments, you would know I avoid SA shares like the plague. But yes, on the NYSE I am currently buying heavily into this weakness and will continue going forward. VOO, XBI and QQQ etfs my favorites, along with a healthy dose of single stock airline and oil stocks. There is no justification for this coronavirus herd mentality panic selling. People have been watching to much “walking dead” if you ask me. But feel free to revisit this comment 1 year plus from now when the world finally calms down and the hysteria subsides.

Would be interesting to calculate the ratio of $trillions (not billions) wiped off global equity asset values versus the number of people died as direct result of Covid-19 thus far.

i.e. X US$trillions loss divided by number of deaths.

You’ll likely arrive at a crazy value per death.

Has the world gone mad(?) For example cancelled sport events globally (we know the most vulnerable are the aged or babies) where mostly young to middle aged typically attends live sports events…yet their age-groups flee.

So do we buy yet?

Hi JBlack. You are asking the wrong question, as no-one can call the top or bottom of market. The real question you need to answer is whether you believe coronavirus is Armageddon? If not, buy away. 20% discount is already fantastic, and if it goes down more, buy more. If the world survives, you would have made a tidy profit. If coronavirus wipes out life on the planet…well, you won’t be around to regret buying.

Indeed. But if 2008 taught me anything, we still have a long way to fall before we are at bargain levels. I’ll nibble but will only sell some fixed income for equity in a while longer…

Why do we not have the 5% rule? If the market drops by 5% the market closes, minimising the sell off from panic sellers. Anyway this should be a great time to buy with current discounts.

Just when you think it can’t go any lower, it does!!

End of comments.

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