The copyright act of 1978 (as amended) prohibits the reproduction of this copy IN ANY FORMAT, (See Clause 4 Terms and Conditions)without prior permission of the original publisher.

Publication

FINWEEK

Page

26

Date

Thurs 06 June 2019

AVE (ZAR)

40805.72

By Lucas de Lange

JSE

Bear has JSE in its gripMorethantwo-thirdsofthetop100companiesarenowlyingbelowtheirlong-termaverages.

here has recently been a markedweakening of the JSE. The share

in terms of the percentage differencebetween its priceand its long-term

Photo:www.clicksgroup.co.2a

pricesofonly 29% of the 100 average.The group,which has been COMPANYooc- ABSAGROUP 218largestcompanies,measuredby privatised(thestate'sshareholdingis STENHOFF 62.59 FIRSTRAND 114

market cap, are lying above their 200-day_ nevertheless 40.5%), has come a long Eg? a 53335; gêïPERSN 1234

exponentialmovingaverages(EMAs), way and isnotonly profitable,but also ASPEN 3526 YUKILE 123which meansthat morethan two-thirds distributingdividends regularly.It has MASSMART 31.99 SANTAM 0.73of the market isdominated by the bear. increased by 45% since the beginning of SAPPI 29.62 gain); [$212

The Top 40 and the All Share indexes the year and, following its results, broke INTUPROPERTIESPLC 2945 'have alsoweakened to below their long- through the high of 8 578 reached in EgïfITIVTEEëOBN 3323

term EMAs, reflecting the pessimism March 2015. During 2007 it reached an NETCARE _25'19currentlyevidentamonginvestors. all-timehigharound19500c. Fromits TIGERBRANDS 293

However,declines inthemarketalso. resultsit'sevident that it ismakingmajor__ SASOL 20.62 TELKOM 333offer opportunitiesasqualityshares investmentsinvariousareasthatare PIONEERFOODS 19.69 KUMBAIRONORE 28tendtobecomeavailableatlowerprices._ beginningtodeliveradditionalincome ”erggg 11%; IMPLATS 20.63Theproblemis alwayswhichsharesto. streams.Thisnotonlyincludesmobile roma: t mo“ 1114693

choose,especiallyifa share'sdecline phoneand internetservices,but also vivo 416.56 GOLDFIELDS 10.33can be ascribed to things going awry its large property portfolio,which will GLENCORE 15.52 DISTELL 10.21in a company - which could prove possiblybe unbundled and listed. MEDICLINIC 151 CAPITEC 10.07detrimental.Mediclinic,Aspenand Itswholly-owned subsidiaryGiro WBHO 1412 AMPLATS 8.53Tongaat are good examples of this. owns more than 1300 properties and E HD EXXARO 145One simply has to lookat the listof the has earmarked 40 new development o e se sens we

ply t on pmer REDEFINE 1316 MTNGROUP 557weakest shares to seewhat pain this projects, including large-scale housing OLDMUTUAL 12.89 BHP HIcould cause for investors. projects. Its CEO, Sipho Maseko, says TRUWORTHS 11.99 LIBSTAR 4.88

A numberofyearsago,the Telkomwants to unlockvalue forits WOOLWORTHS 11.25 ANGLOAMERICAN 4.36Foundation for the Study of Cycles in the__ shareholders. Then we have the ongoing mIEHHüDLITNI-[IiêAREEgg SIRIUS 379US researched which technical indicator speculation that Telkom is possibly going DIS-CHENM _10'6 23333240BANK 332

could give investors a meaningful to merge with Cell C because both of SHOPRITE 40:49 MMLHOLDINGS 2:69guideline in times like these. It became them are currently finding it difficult AVI 1043 BARLOWORLD 2.68apparentthat during a majordownswing,__ to compete with the two giants in the HARMONY 10.37 TFG 249qualityshareswhosemid-termaverages__ industry,MTNandVodacom. DISCOVERY 10.26 BIDCORP 241(say 75 days) remained above their long- Among the weakest shares is one RICHEMONT 245

200 days)could proveto__ Sasol** which is being punishedby the f #" ara ansrow C-termIGVGrages ( V . pl a 9 p _y MONDILTD 8.25 ABINBEV 078

bewinnersin the next upswing. market for unexpectedly announcing JSE 116 THARISA 072This demonstrates that the so-called_ that it would have to spend an CORONATION 162 RMBHOLDINGS 041

informedcapitalwaspreparedto additional$1bntocompleteitsgiant MONDIPLC 151 EQUITES 0.39support those shares despite the chemical plant at Lake Charles in the SIBANYE-STILLNATER45 CLICKS S

nos . KAP 6.68general pessimism.The Achilles heel US. The total costs have escalated to PEPKORHOLDINGS 638of this technique isofcoursethat the between $12.6bn and $12.9bn, equal SUPERGROUP 613decline could become a full-scale bear to more than two-thirds of its current NEDBANK 5.98market. It would thereforebe saferto market cap.The only consolation is that_ SANLAM 5.59use it in tandem with good fundamental_ the project is close to being completed BAT 5.32

- NO NEPIROCKCASTLE 5.29research. The group of shares that have and units are beginning to come on vODACOM 519come to the fore through this method stream, which will start generating cash_ 484is currently dominated by commodity flow in the near future. INVESTECPLC ~4.59groups such as Implats, Amplats, Among the shares that have broken BIDVEST AAl

. . RESILIENT 43]Kumba, Northam, ARM and Anglo. through, Bidcorp and Richemont lookthe_ prey pay 394 BREAKING THROUGH*

Others that look interesting include most interesting. M TSOGOSUN -3.88 Chay reTelkom,Capitec, Naspers*and PSG. editorial@finweek.co.za LIBERTYHOLDINGS 46 BIDCORP 247

F IdhavebelievedthatTelk ; i ; s von YA RICHEMONT 245ewwould havebelieved tat I€IKOM, LucasdeLangeisaformereditoroffinweekandan GROWTHPOINT 345 .which has been a groupfraught with authorof twobooksoninvestment. PSG 28 ANGLOGOLDASHANTI 12problems for so long, would pop up as the_ *finveekisapublicationofMedia24,aNasperssubsidiar y. 33333PLC Egg tad

strongest share on the JSE - measured **ThewriterownsSasolshares.

LONMIN 225

*Basedonthe100largestmarketcaps.