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Cape Town - Monday was a bloodbath for world equity markets with the JSE feeling the rout. Here are some noteworthy movers.
1. SABMiller [JSE:SAB]
SABMiller was down 3.95% on Monday amid overall negative sentiment in the markets. SAB is seen as one of the more defensive counters on the JSE and offers a rand hedge element. Operating across various countries it has a diversified income stream. Expect SAB to offer less downside in a falling market due to its defensive nature.
2. PSG Konsult [JSE:KST]
Asset management companies whose earnings are linked to the performance of the markets have shown strong movement to the downside. With the JSE All Share index down 2.85% on Monday to 47 631 points, earnings and funds under management will be severely impacted in the short term. The JSE All Share index has dropped by 13% since its high of just over 55 000 points in late April. Asset managers, like PSG Konsult, which is trading at a high price to earnings ratio is due to see more downside if the market selloff continues. On Monday the counter lost 9.9%.
3. MTN [JSE:MTN]
The telecommunication giant has dropped 7.84% on Monday, mostly because of its exposure in Nigeria. With a bulk of its revenue coming from Nigeria, which is an oil price dependent country, MTN has sold off. Bent crude dropped below $45 per barrel for the first time since 2009. This price drop has hit the Nigerian economy hard. Expect their GDP growth numbers to soften as the oil market is set to be in oversupply for a while longer.
4. Nedbank [JSE:NED]
Nedbank has only dropped 1.59% on Monday, outperforming the 2.85% decline in the JSE All Share index. Nedbank is a solid company and its excellent results announced recently have stopped investors from punishing the share price heavily during the selloff. In a falling market, Nedbank's share price increased 3.34% for the year to date which is excellent considering the selloff in emerging markets and the JSE. Nedbank is also nicely poised to take advantage of any interest rate hikes.
5. EOH [JSE:EOH]
EOH is a business and technology solutions provider listed on the JSE since 1998. The EOH share price dropped by 9.9% on Monday, despite a trade update indicating an expected headline earnings per share of between 535.9 cents and 580.6 cents, which is an increase of between 20% and 30%. However, with EOH priced for growth and trading at a price to earnings ratio of 29.5, expect the share price to disappoint if they fail to continue these earnings numbers.
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* Kirk Swart is an analyst at Overberg Asset Management (OAM), an Authorised Financial Services Provider (No. 783) which specialises in the private management of local and global discretionary portfolios as well as pension products.
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