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Alec Hogg: Has the JSE’s Bull Market run out of steam yet?

By Alec Hogg

Share prices on the JSE are expensive. By historic measures, the upward cycle has been strong (90% in three years) and extended ( five years, second longest on record). So is it time to dump and run? Especially as US and European equity markets are more attractively priced – and have thus far withstood their bond market rout pretty well.

Yesterday I got to spend some time with PSG investment economist Dawie Klopper. Given his position in Jannie Mouton’s empire, the prospect of a market meltdown is something Dawie often applies his mind to.

Although he’s not keen to inject fresh cash into the JSE, Dawie reminded me that two of the key indicators of the end of a bull market are not yet present. The public hasn’t started punting shares in a big way. And while there have been some new listings, we’re far from the flood that came ahead of the JSE’s major reverses (1969; 1987; 1999; 2007).

In investment markets, there’s always the prospect of a correction. But as for a crash – relax. It’s far too early to panic.

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