How SA small caps fared in H1’23
In an environment with rising interest rates, record-level load shedding and volatile markets, how have SA small caps - these companies with a market capitalization below R1 billion fared. The small cap sub-index on the JSE is down almost 5 per cent on a 6-month basis, here to take us through the winners and losers in the first of 2023 for small caps is Anthony Clark, Independent Analyst at SmallTalkDaily.
Fri, 21 Jul 2023 16:05:21 GMT
Disclaimer: The following content is generated automatically by a GPT AI and may not be accurate. To verify the details, please watch the video
AI Generated Summary
- Despite small caps trading at historically low price-earnings ratios, investor interest remains subdued due to a lack of confidence in the domestic economy.
- All sectors within the small cap segment have faced challenges, with factors like load shedding, constrained consumer demand, and low liquidity exacerbating the situation.
- The market presents opportunities for patient investors, with good quality small caps trading at bargain prices, potentially yielding significant returns in the future.
In the fast-paced world of South African small caps, the first half of 2023 has brought its fair share of challenges and opportunities. The small cap sub-index on the JSE has experienced a rocky start, with a nearly 5 per cent decline over the past six months. Anthony Clark, Independent Analyst at SmallTalkDaily, delved into the winners and losers in this volatile market environment. Clark highlighted the subdued performance of small caps in contrast to their stellar run in 2021. While the all-share index climbed about 5.3 per cent, the mid-cap index dipped by 0.5 per cent, and the small cap index saw a 1.9 per cent decline. This drop signifies a shift in investor sentiment, as domestic small caps are currently trading at historically low price-earnings ratios, deterring interest from fund managers who opt to explore international opportunities. The combination of factors such as load shedding, constrained consumer demand, and low liquidity has further dampened enthusiasm for small cap stocks. Despite some companies showing strong earnings growth, the overall lack of market interest has left small caps languishing. Various sectors including mining, industrials, financial services, and retail have felt the pinch, with no segment emerging unscathed from the challenging market conditions.
Get this delivered to your inbox, and more info about about our products and services. By signing up for newsletters, you are agreeing to our Terms of Use and Privacy Policy.
