Share

JSE faces another 10% slump

Johannesburg – Investors in the South African market, who already saw the value of their investments drop 10% during the past week, have to prepare themselves for more shocks.

The JSE’s all-share index looks set to lose another 10% if global markets don’t bounce back in the coming days.

Hannes Smuts, portfolio manager at PSG Konsult, says it is uncertain where the market will bottom out.

He says there was a shift in investment sentiment and that fear currently has the upper hand, which means that more losses are ahead.

The all-share index dropped 1 000 points (3.6%) to 26 515 on Friday. The index lost 2 000 points over the past week.

Debt problems in Greece, which could spread to other European countries, have sparked fears that the world is facing another financial crisis.

The news from China, a key market for South African commodities, is downbeat. China is already in a bear market, with shares falling more than 20%.

Analysts have been warning for some time that the local market was ready for a correction.

Sake24’s technical analyst Frans de Klerk said low trading volume and volatility have been pointing to a loss of momentum in the markets.

The local market also looks expensive, with a price earnings ratio of 18 times. The market’s average P/E over the past fifty years was 12.

The Greek crisis provided the catalyst for a correction.

The trading volatility and volume seen on the JSE this week have reached levels last seen during the financial crisis in 2008.

If the market doesn’t recover convincingly more problems lie ahead, says De Klerk.

The all-share index broke through the key support level of 27 600 on Thursday and dropped another 1 000 points on Friday lower. If the index doesn’t reach 27 000 soon, the level of 25 000 can be tested soon.

Investors looking for bargains on the market will probably wait to see how long and serious the problems in the Europe will be and whether company earnings in South Africa will maintain momentum.

- Sake24.com

For business news in Afrikaans, go to Sake24.com.

 

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.90
+0.2%
Rand - Pound
23.86
+0.2%
Rand - Euro
20.36
+0.3%
Rand - Aus dollar
12.31
+0.3%
Rand - Yen
0.12
+0.2%
Platinum
908.05
0.0%
Palladium
1,014.94
0.0%
Gold
2,232.75
-0.0%
Silver
24.95
-0.1%
Brent Crude
87.00
+1.8%
Top 40
68,346
0.0%
All Share
74,536
0.0%
Resource 10
57,251
0.0%
Industrial 25
103,936
0.0%
Financial 15
16,502
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders