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Is it the beginning of the end of the JSE as we knew it?



Is it the beginning of the end of the JSE as we knew it?

Dwindling market activity made worse by political talk that reminds global investors of Zim and Venezuela

Giulietta Talevi

For stockbrokers tallying up after a day of just R11bn traded, it certainly is beginning to feel the end is nigh. Monday was one of the worst days for market activity in recent times. To put R11bn into perspective, that’s the kind of value you normally see traded over Christmas.But recent averages have dwindled, too: to between R14bn and R15bn, with at least 15% of daily trade down to just one share: Naspers.
It would be kind to attribute our slump in volumes to the northern hemisphere summer holidays, or to the fact that we no longer have a company like SABMiller to draw big interest. (Its successor, AB InBev, does not qualify to be part of the JSE’s Top 40 stocks because it doesn’t have a big enough free float of local investors.)
The more disturbing truth of the JSE’s paltry volumes is that a dwindling economy, with dwindling prospects, where growth shrinks and companies retrench to survive, is not the sort of place to excite the animal spirits of those keen to make money.
While SA’s bonds have attracted interest recently given the appeal of their yields, the same cannot be said of local equities. This should be as much a wake-up call to policymakers as international opinion pieces such as Tuesday’s editorial in the Wall Street Journal.
Would-be investors may not even have gone past the WSJ headline: “South Africa’s slide: President Ramaphosa tries the Zimbabwe and Venezuela way”. 
In a world of other opportunities, they don’t need to.

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