The COVID-19 pandemic has wreaked havoc on global markets in February and March, and the Johannesburg Stock Exchange (JSE) was not spared.
The JSE All Share Index (JSE ALSI), which includes 150 JSE-listed companies and is the largest index in terms of size and overall value, fell by 35% between 17 February and 19 March.
This was in line with global markets. The S&P 500, for example, declined by over 30% between February and March this year – the fastest bear market from an all-time high in history.
Markets started to recover in mid-March – partly fuelled by an excellent performance in tech shares over the past two months.
Backed by strong balance sheets and good growth opportunities, technology companies experienced a rapid recovery since their yearly lows in mid-March.
Tech giants like Amazon, Netflix, Facebook, and Apple, for example, have been trading at all-time highs in recent days.
The JSE followed the global market recovery despite the national lockdown which kicked in on 27 March.
The JSE ALSI broke through the 52,000-mark this month on the back of the eased lockdown regulations and hopes of an economic recovery.
Local tech shares have also seen a rally in recent weeks, but most of them still have some way to go to make up the losses experienced in the COVID-19 crash.
Big market recovery since the lockdown started
The JSE All Share Index had a rapid recovery between 19 March (37,963) – when it hit its low point this year – and 3 June (53,645).
The rand also gained ground in recent weeks and breached R17 per USD for the first time since the lockdown started.
The recovery on the JSE over the lockdown period was, however, not seen across the board.
Hotel, gaming, and entertainment companies like Tsogo Sun and Sun International warned that it may take years to recover.
Sasol’s share price, on the other hand, increased by over 300% since it hit its lows on the back of the global oil crisis.
The chart below shows the fall and recovery of the JSE All Share Index over the past 3 months.
Best-performing JSE listed tech shares since lockdown started
Most South African tech and telecoms shares showed good growth since the lockdown started.
Blue Label, MTN, and Alviva were the biggest winners while Adapt IT, Reunert, and Mustek were the biggest losers.
The chart below shows how much money you will have now (the end of trading on 3 June) if you invested R1,000 in these companies on 26 March before the lockdown started.
International tech shares since lockdown started
All international tech giants showed strong growth since 26 March and some of them, like Amazon, Netflix, Facebook, and Apple, are trading at all-time highs.
Tesla and Facebook were the biggest winners over the last nine weeks, followed by Apple, Amazon, and Google.
The chart below shows how much money you would have now (the end of trading on 3 June) if you invested $1,000 in these companies on 26 March.