2021 the best year for SA stocks in more than a decade as Richemont rallies 84%

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A Van Cleef & Arpels store, which is in the Richemont stable
A Van Cleef & Arpels store, which is in the Richemont stable
Richemont

South African stocks are closing out their best year since 2009, although the gains have little to do with local factors.

The FTSE/JSE Africa All Share Index slipped 0.1% in 2021’s final session on Friday, trimming its annual advance to 24%. The benchmark closed at all-time highs on Wednesday and Thursday.

While South Africa’s economy has been battered by Covid-19, the success of its stock market reflects optimism about a global rebound from the pandemic and increased demand for commodities. Mining giants Anglo American and BHP Group were major contributors to the gains, along with Sasol, whose fortune is linked to oil prices, which are also rising the most since 2009.

Richemont, the luxury group controlled by Johann Rupert, was the biggest single driver for the South African gauge this year in terms of index points. The Johannesburg shares of the luxury retailer climbed by a record 84% as the sector was buoyed by resilient pandemic sales and bullish prospects for 2022.

The dominance of European-listed stocks like Richemont, BHP and Anglo American means the Johannesburg benchmark’s performance this year more closely resembled major developed markets than its emerging country peers, with the MSCI EM Index down 4.5%.

ArcelorMittal South Africa was the biggest local gainer, surging almost ninefold in 2021. Bullion producer DRDGold fared the worst, sliding 27%.

With assistance from Robert Brand.

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