South African Stocks Fall on Risk-Off Sentiment in the Market Watch for August.
The South African stock market fell in August as risk-off sentiment gripped global markets. The benchmark JSE All Share Index declined 4.8%, while the rand lost 6.5% against the US dollar.
The sell-off was led by resource stocks, which were hit by weak commodity prices and disappointing earnings from the major platinum miners. Impala Platinum’s headline earnings fell more than 40%, while Naspers and Prosus lost 8.2% and 7.3%, respectively.
On the other hand, defensive blue-chip rand hedge stocks bucked the trend, rising roughly 5% thanks to the currency tailwind. British American Tobacco and AB InBev were among the top performers.
However, there were some domestic stocks that fared well in August, such as Sanlam (+3.6%), FirstRand (+0.8%), Investec (+4.0%), Standard Bank (+1.3%) and Shoprite (+2.1%). Other standouts in the small and midcap space include education companies such as Stadio (20%), Curro (+16%), and ADvTECH (+11%).
These stocks benefited from strong earnings growth and positive news flow. For example, Stadio announced that it had acquired a new school, while Curro said that it had increased its student enrollments.
Overall, the South African stock market had a tough month in August, but there were some bright spots. Investors should focus on defensive stocks and those with strong earnings growth as the market navigates the current uncertain environment.
To find out more about the current market situation, read the Market Watch for August 2023 below:
Missed last month and need to catch up? Read the July market watch here.
