SA stock index closes off 2013 on a record high

2013-12-31 16:13

The benchmark Top 40 stock index rose to a record high today to close out 2013 with a 19% annual gain, helped by monetary stimulus that has boosted appetite for emerging market assets across the globe.

The Top 40 advanced 0.32% to 41 482.39, its highest finish in its 18-year history. Earlier in the session, it hit a record high of 41 518.71.

Demand for South African assets – particularly blue-chips such as media company Naspers and paper maker Mondi – has made South Africa among the world’s most expensive emerging stock markets and investors reckon a correction could be due in 2014.

“We need to wait and see what the banks and retailers do in their results in the first quarter of 2014 to see the strength of the local consumer,” said Greg Davies at Cratos Capital.

Consumer spending remains lacklustre, given the slow growth and high levels of household debt. This has prompted investors to shift from retailers – the star performers in 2012 – into companies that make more of their profits overseas.

E-commerce and media firm Naspers was the best-performing stock on the Top 40 this year, more than doubling in value on the back of its stake in Chinese internet giant Tencent Holdings.

Paper maker Mondi, which has operations in Europe and reports its results in euro, was the second-best performer on the Top 40, adding 95%.

Companies with overseas earnings were also boosted by the crumbling rand which is on track for a 25% loss this year, its worst performance since 2008.

The rand’s decline pushed stocks into negative territory for the year in dollar terms with the Top 40 down nearly 4%.

The broad All-Share index today edged up 0.27% to 46 256.23, also a record close. It hit a record high of 46 290.20.

For the year, the All-Share added nearly 18%.

Trade was thin with just 45 million shares changing hands in a session that was shortened to half-a-day ahead of the New Year holiday. Advancers outnumbered decliners, 146 to 104, with 48 shares unchanged.

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