THE collapse of Lehman Brothers five years ago caused great concern, with investors fearing the onset of a new depression.
But the period since has seen one of the best JSE performances ever. In September 2008 the all share index stood at 20,900. It has since more than doubled to above 43,500 today.
Asset managers warn that investors should not expect the same growth over the next five years. Sanlam Private Investments investment director Alwyn van der Merwe said the last decade in South Africa was not normal. "Investors have been spoilt."
Not much has changed in the composition of the top 20 market cap companies on the JSE. All the top 10 companies of 2008 are still there, except Amplats and Implats, who have been replaced by British American Tobacco (BATS) and Naspers.
In September 2008 BHP Billiton and Anglo American were the highest rated, with a market capitalisation of R355.6bn and R310.2bn. Today BHP Billiton has the third-highest market cap of around R645bn, less than double that of 2008. Anglo’s market cap has risen to R356bn, and it is now only the sixth-highest rated company on the JSE.
Anglo Platinum was rated seventh in 2008, with a market cap of R142bn, but has now fallen to 16th position with a lower market cap of R113bn. Implats was then in ninth position but has since fallen out of the top 20 ratings with a market cap of R77bn, lower than Remgro, now at 20 with a market cap of R94bn.
The last five years have been equally torrid for gold companies, with AngloGold/Ashanti and Gold Fields both falling out of the top 20 list.
Top of the list now is BATS, with a market cap of R1,056-trillion, the first JSE company to cross the trillion-rand threshold.
Second placed is South African Breweries with a market cap of around R816bn. In 2008 it was already one of the top three due to its global expansion strategy, but had a much smaller market cap of R238bn.
MTN was formerly in fourth spot with a market cap of R192bn. It is now seventh with a market cap of R354bn. Luxury goods group Richemont and petrochemical giant Sasol were in the top 10 in 2008, and are still there today, at number four and eight.
The obvious star since 2008 has been Naspers. With a market cap of R56,3bn in September 2008, and in 15th position, it has climbed to fifth with a market cap of R390bn. This is mainly the result of its successful investment in the Chinese Tencent group, of which it owns 30%. The market has been forgiving for Naspers’s other less successful investments, notably the R15bn it paid for the European Tradus group, now Allegro, in 2009, which is barely profitable.
Financial groups, notably banks, have been great success stories. In 2008 Standard Bank was dominant with a market cap of R117bn. This has grown to R187bn; however, the group is now experiencing serious competition from FirstRand.
Investments in Absa and Nedbank have been profitable with Absa, now Barclays Africa, doubling its market value to R122bn today. Nedbank was out of the top 20 stakes in 2008, but is now in 17th spot.