South African market suffers worst crash since 1997

The JSE lost almost 10% of its value in a single day on Thursday - the worst crash since 1997.

According to data from the investment platform TimBukOne, the JSE's all share index has had just three worse days in the past forty years (in 1987, 1997 and 1989). The JSE's all share index closed 9.7% lower at 44 303 points. The local market has now lost more than a fifth of its value so far this year.

Across the world, markets were bleeding as investors feared the economic impact of the worsening spread of the coronavirus.

Trading had to be briefly halted on Wall Street because the market fell too far, too fast. European stocks were down more than 8%. The 10-year Treasury yield slid to 0.65%. The Brazilian stock market, which lost 12% so far on Thursday, lost almost a third of its value this week.

Bloomberg reports that US President Donald Trump’s travel ban and tepid fiscal measures sparked the latest leg down in risk assets, while the European Central Bank failed to stem the rout after it left rates unchanged, though it temporarily increased its quantitative easing programme and took steps to boost liquidity.

Sasol - once one of the ten biggest listed companies in South Africa - has slumped another 30% on Thursday. Its share price briefly dipped below R30 - from R470 less than a year ago. Sasol shares have now lost almost 95% of their value since April last year. 

In a week of stocks crashing across the world, Sasol has been the worst-performing share in all emerging markets. The recent oil crash triggered major concerns that the company will be left in breach of its loan conditions. While the market now only values it at around R23 billion - its debt burden is R121 billion.

The oil price slumped another 7% to $33 a barrel on Thursday.

South Africa's commodity stocks were worst affected by the global rout on Thursday, with the platinum price down 9% amid fears that manufacturing will take a long time to recover from the coronavirus chaos. 

Even gold, which is normally a safe haven in uncertain times, sold off. Wichard Cilliers, head of dealing at TreasuryONE, attributed this to a "continuous hunt for cash to cover margin calls on leveraged positions".

Northam (-24%), Sibanye (-23%), Implats (23%), Ampats (22%) and Gold Fields (-17%) were all left bleeding.

Naspers dropped 9% and Richemont lost more than 10%. Property landlords Redefine dropped 13% and Growthpoint was down 10%.

Along with other emerging market currencies, the rand also took a hit. It was last down 2% to R16.52/$.

ZAR/USD
17.19
(-1.14)
ZAR/GBP
22.13
(-1.00)
ZAR/EUR
20.06
(-0.91)
ZAR/AUD
12.19
(-0.91)
ZAR/JPY
0.16
(-0.81)
Gold
1880.70
(-0.06)
Silver
23.57
(-0.68)
Platinum
875.00
(-0.57)
Brent Crude
42.88
(+1.08)
Palladium
2261.00
(+0.38)
All Share
54451.93
(-0.49)
Top 40
50307.25
(-0.54)
Financial 15
9846.74
(-0.86)
Industrial 25
73567.37
(-0.57)
Resource 10
54139.22
(-0.42)
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