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We take a look at the Johannesburg Stock Exchange (JSE) trading statistics for the week ended 3 April 2020 and compare the numbers to that of a year ago.
This trading week is the first full trading week in which South Africa has been in full lockdown. Has this affected the number of trades or the total value of trades on the Johannesburg Stock Exchange (JSE) |
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Our highlight over the last week
Twice a year the South African Reserve Bank published a monetary policy review presentation which gives a broad overview of global financial markets as well as a global economic overview. The reason for this is the fact that South Africa's monetary policy is influenced by a whole host of factors which includes what is happening in local and foreign markets. The first slide of their MPR presentation starts with the heading "Having monetary policy space, and using it "
Read our write up of the Monetary Policy Review here
- COVID-19 biggest shock to global economy since Lehman Brothers’ bankruptcy
- SA economy likely to contract this year, by at least 2%
- Monetary policy has space to respond, given lower inflation
- Stronger recovery needs “bridging” and longer-run fixes
Read our write up of the Monetary Policy Review here
JSE Trading Statistics for the week ending 3 April 2020
Number of trades:
Number of trades (2020): 2 229 397
Number of trades (2019): 1 488 515
% change year on year: 49.77%
Volume traded:
Volume traded (2020): 2 480 915 000
Volume of traded (2019): 1 452 713 000
% change year on year: 70.78%
Value of trades:
Value of trades (2020): R115 663 108 000
Value of trades (2019): R98 170 521 000
% change year on year: 17.82%
Foreign purchase/selling:
Net sales/Purchases (2020): -R3 442 722 000
Net sales/Purchases (2019): -R1 563 029 000
So year to date (YTD) foreigners have been net seller/buyers:
Net sales/Purchases (2020): -R29.433 billion
Net sales/Purchases (2019): -R26.227 billion
So a year ago foreigners were net sellers of SA listed shares to the value of -R29.433 billion for the YTD while this year they have been net sellers to the tune of -R26.227 billion in the year to date (YTD). While the numbers for this is year is a lot better than the previous year the fact is that foreigners remain net sellers of SA listed stocks and they have been for most of 2019, 2018 and 2017.
There are now massive fears regarding the Coronavirus and its impact on global economic growth, particularly the impact on China's growth and the impact it will have an South Africa's economic growth, since we supply loads of basic commodities too China, the world's second largest economy. We have seen in recent weeks many countries going into lockdown, and closing their borders, implementing travel restrictions, banning large crowd gatherings and sporting events, all in an effort to curb the spread of the virus. With South Africa in lockdown the South African Reserve Bank estimated the direct impact of the 21 day lockdown to drag down GDP growth by -2.6%. So assuming the economy was set to grow by 0% this year, based on the bank's estimates the South African economy will shrink by 2.6% just due to the 21 day lockdown
The data above still shows that foreign capital is still leaving South African equities in vast amounts. This while the South African government continues to try and convince investors that South Africa is open for business. But the large scale corruption, poor government service delivery, slow economic growth, restrictive labour laws, worries about property rights, crime and general public disorder in the forms of strikes and looting are keeping potential investors away from South Africa.
JSE total market capitalisation:
Market Cap (2020): R14.663 trillion
Market Cap (2019): R16.420 trillion
% change year on year: -10.7%
So as shown in the JSE total market capitalisation above, the value of the overall market capitalisation of the stocks listed on the JSE has decreased significantly over the course of the last 12 months as the recent market sell off has seen the JSE All Share Index lose over 30% since the start of the year. See our JSE Calendar tracker for more.
Key issues for the market and South Africa during 2020 will be:
Number of trades (2020): 2 229 397
Number of trades (2019): 1 488 515
% change year on year: 49.77%
Volume traded:
Volume traded (2020): 2 480 915 000
Volume of traded (2019): 1 452 713 000
% change year on year: 70.78%
Value of trades:
Value of trades (2020): R115 663 108 000
Value of trades (2019): R98 170 521 000
% change year on year: 17.82%
Foreign purchase/selling:
Net sales/Purchases (2020): -R3 442 722 000
Net sales/Purchases (2019): -R1 563 029 000
So year to date (YTD) foreigners have been net seller/buyers:
Net sales/Purchases (2020): -R29.433 billion
Net sales/Purchases (2019): -R26.227 billion
So a year ago foreigners were net sellers of SA listed shares to the value of -R29.433 billion for the YTD while this year they have been net sellers to the tune of -R26.227 billion in the year to date (YTD). While the numbers for this is year is a lot better than the previous year the fact is that foreigners remain net sellers of SA listed stocks and they have been for most of 2019, 2018 and 2017.
There are now massive fears regarding the Coronavirus and its impact on global economic growth, particularly the impact on China's growth and the impact it will have an South Africa's economic growth, since we supply loads of basic commodities too China, the world's second largest economy. We have seen in recent weeks many countries going into lockdown, and closing their borders, implementing travel restrictions, banning large crowd gatherings and sporting events, all in an effort to curb the spread of the virus. With South Africa in lockdown the South African Reserve Bank estimated the direct impact of the 21 day lockdown to drag down GDP growth by -2.6%. So assuming the economy was set to grow by 0% this year, based on the bank's estimates the South African economy will shrink by 2.6% just due to the 21 day lockdown
The data above still shows that foreign capital is still leaving South African equities in vast amounts. This while the South African government continues to try and convince investors that South Africa is open for business. But the large scale corruption, poor government service delivery, slow economic growth, restrictive labour laws, worries about property rights, crime and general public disorder in the forms of strikes and looting are keeping potential investors away from South Africa.
JSE total market capitalisation:
Market Cap (2020): R14.663 trillion
Market Cap (2019): R16.420 trillion
% change year on year: -10.7%
So as shown in the JSE total market capitalisation above, the value of the overall market capitalisation of the stocks listed on the JSE has decreased significantly over the course of the last 12 months as the recent market sell off has seen the JSE All Share Index lose over 30% since the start of the year. See our JSE Calendar tracker for more.
Key issues for the market and South Africa during 2020 will be:
- Exchange Rate (seems to be see sawing a lot. See our exchange rate page)
- Coronavirus and the impact it will have on not just Chinese demand for resources from South African commodity firms but the impact it will have on global trade, tourism, supply chains and ultimately global economic growth
- The pressure is starting to mount on the South African Reserve Bank with central banks across the world cutting rates in order to try and fight off the negative effects the Coronavirus has and will have on global demand and growth. The bank obliged and cut rates by a significant 100 basis points from 6.25% to 5.25%
- ESKOM's financial woes and continued loadshedding and weaker than expected tax collections is forcing government to borrow more money, which is negatively affecting the South African exchange rate, and potential credit rating cuts coming for South Africa's government which pushes up the cost of borrowing, and this at a time when government is borrowing more and more
- Expropriation of land without compensation (EWC) has gone quiet in recent months but we are sure the EFF will bring it up again soon to get some airtime
- Potential expansionary monetary policy coming considering the very weak economic growth numbers
- Sluggish economic growth. See our SA GDP page and high levels of unemployment
- SA being downgrade to junk status by Moody's. All three major ratings agencies now rate South Africa's government bonds as "junk status" or sub investment grade
- Impact of the Coronavirus on South Africa's economic growth