Who Really Drove the Growth

The Johannesburg Stock Exchange (JSE) has had one of its best five-year runs, recently breaching the 100,000-point mark on the FTSE/JSE All Share Index – a historic milestone for South Africa’s financial markets. But beneath the headlines, a deeper story unfolds: how many companies actually contributed meaningfully to this growth?

The Numbers Behind the Headlines

• The JSE currently lists 282 shares.
• Since September 2024, most shares showed positive returns, but:
  • Only about a third (±94 companies) gained more than 10%.
  • Another third posted negative returns.
  • The remaining third had modest gains below 10%.

This means that less than 100 companies truly outperformed, despite the index reaching record levels.

Who Were the Real Winners?

The standout performers were gold and platinum mining companies, which dominated the top gainers list:

• Eastern Platinum surged over 200%.
• DRDGold gained 188%.
• Southern Palladium rose 174%.
• Sibanye-Stillwater, Gold Fields, and Harmony Gold also posted strong double-digit returns.

These few companies, especially those with international exposure, were instrumental in lifting the overall index.

The Illusion of Broad-Based Growth

While the All Share Index reflects a strong overall performance, it’s important to note:

• The index is market-cap weighted, meaning larger companies have a disproportionate impact.
• Prosus, Naspers, and other dual-listed giants contributed significantly to the index’s rise.
• SA Inc. (companies focused on the domestic economy) had mixed results, with many underperforming.

What This Means for South African Investors

For retail and institutional investors, this data reveals a critical insight:

• Broad market growth does not guarantee portfolio growth.
• Active stock selection and sector focus (especially commodities and tech) were key to outperforming.
• The Small Cap Index rose nearly 27%, showing that smaller companies offered better opportunities than the Top 40.

South African investors must look beyond index performance and ask:

• Which sectors are driving growth?
• Are gains concentrated in a few companies?
• Is my portfolio diversified across high-performing areas?

Understanding the composition and weighting of indices is essential. The JSE’s record highs were not a reflection of widespread prosperity, but rather the success of a select few.