JSE Top 40 Breakdown for 2019

The JSE top 40 is probably the index that gets the most views every day. This index represents the 40 largest companies on the JSE, and as such, it is kind of a benchmark for shareholders and investors to see how the South African market is faring.

Over the run of the year in 2018 a lot of the top 40 companies on the JSE took a knock. The economic environment in South Africa was not very stable over the last year and as such a lot of companies struggled to keep their profits up and their losses low. There were a couple of exceptions though, with a whole lot of the resource companies that are listed on the JSE top 40 increasing their share value over the duration of 2018.

These companies’ spots on the JSE top 40 are not really in question, but what about the other companies that didn’t do so well? Are there upcoming companies that are ready to take their place on the JSE top 40, or are there international companies with a massive market capitalization that is on the verge of being listed on the JSE? Read on to find out.

2018 JSE Top 40

Companies that showed growth over the past year

The Anglo mining houses dominated the JSE top 40 in 2018, with Anglo Platinum’s shares increasing by 51.7%. Anglo Ashanti Gold followed closely on its cousin in the platinum industry’s heels with a total share growth of 40.7% per share. Anglo American also showed a 20.0% increase in share value in 2018. BHP Billiton South 32 and Sasol also managed to add value to their shares last year with increases of 18.5%, 1.3% and 0.9% respectively. All six of these resources companies are sure to stay in the top 40 in 2019.

Pepkor did surprisingly well in 2018, growing their share value by 33.6% over the course of the year. Another clothing retailer, Mr Price, grew their share value with 2.7%, which may seem small… But when compared to most other companies on the 2018 top 40, any growth at all was positive.

In the world of finances, Old Mutual Limited managed to increase their share value by 5.5%. While more conventional bank type institutions like Nedbank, Capitec and RMB Holdings also managed to up their share values over the last year. It would seem like these financial institutions will stay on the JSE top 40 in 2019.

Companies that showed a decline over the past year

So that was the twelve companies that increased their share values over the duration of 2018. Being able to grow under the strenuous market conditions that South Africa faced last year shows that these companies are not on the JSE top 40 for nothing. But where these companies grew, the other 28 companies on the top 40 weren’t as successful. Sure, some of those companies gave ground grudgingly, but some of lost around one half of their share value over the course of 2018. Will those companies be able to bite the bullet and rise again? Or will other companies take their place on the JSE top 40?

FirstRand, Bidvest, Sanlam, Redefine Properties, Mondi PLC, Standard Bank and Vodacom were all companies that had declines of less than 10% in share value over 2018. With a market capitalization of more than R55, 000,000,000 these companies are all still on the top 40, but they better be careful lest they get kicked off.

Absa, BidCorp, Discovery, Growthpoint Properties, Investec PLC, PSG, Shoprite and Woolworths all lost share value of between 10% and 15% over the duration of 2018. Apart from Woolworths, which got bumped off the top 40 Index, the rest of these companies retained their spots on the chart. To be listed on the JSE Top 40 index means that your company has shown immense character over the course of its existence. As such, the companies that we just mentioned won’t be easily shaken from their spots on the top 40. And don’t throw Woolworths away! They are still one of the biggest companies on the JSE and can bounce back easily. Absa and BidCorp don’t have anything to fear at the moment, as both companies can boast with a market capitalization of over R100, 000,000,000.

Exxaro Resources, Glencore, Naspers, Remgro and Richmont all suffered losses of up to 20% in share value. Of these companies, the only one that really stands a chance of being bumped out of the top 40 is Exxaro, because their market cap lies dangerously close to the bottom of the top 40 list. Naspers is currently the second largest company on the JSE, with Glencore and Richmont coming in at numbers four and six respectively. So most of these companies seem to be safe in their spots at the top of the list. They won’t be moved down in the close future.

Rand Merchant Investment and Tiger brands took huge knocks during 2018, with a decrease in market cap value of 20.8% and 41.2% respectively. These companies are numbers 39 and 40 on the Top 40 list, so if they are not careful they might be bumped off of the list.

Anheuser-Busch, Kumba Iron Ore and MTN’s share values decreased by between 25% and 35% over the past year. None of these companies seems to be in immediate danger of falling of the charts, as both Kumba and MTN boast with a market capitalization of over R100, 000,000,000. Whereas Anheuser-Busch, the American brewing group is the largest company that is currently listed on the JSE, with R1,759,143,140,711 in market cap value. They will need to lose a lot more in share value to fall off the charts!

Third largest company on the JSE, British American Tobacco took a beating in 2018 when their share value decreased by 43.4%. Even though this tobacco giant saw a decrease in share value over the last year, the group is confident that they will start showing a positive growth curve over the next couple of years, after they got a more solid footing in the e-cigarette and vape market. In fact, The company has already shown signs of stabilisation after the drop in share price in 2018. Watch this space.

NEPI Rockcasle, a real estate and development company, took great losses in 2018 when its share value decreased by 47.8%. Despite the fact that the company lost share value last year, they have already stabilised in the new year. With a market cap of just under R70, 000,000,000 this company seems to be in a good position on the JSE top 40. But they should be careful not to lose another 47% in share value, or they might get dropped off the list.

Aspen Pharmacare’s share value decreased by over 50% in 2018. It was a bad year for the major pharmaceuticals company, as they took a beating in the European market and, it would seem, their major debt has finally caught up to them. The outstanding debt made it near impossible for the company to distribute medicine to all of the intended markets, and as such, they lost a whole lot in share value! With the massive decline in share value, Aspen dropped to fairly low on the JSE top 40 Index. If the company does not manage its debt soon, they might be bumped off the chart.

Companies to keep an eye on

Hammerson Plc, a United Kingdom-based Real Estate Investment Trust or REIT, is sneaking its way onto the JSE top 40 Index. Property markets all across the globe are tough at the moment, but it seems like Hammerson has found a way to increase profits after they reached a low point at the start of this year.  Hammerson has a portfolio that is focussed mainly on shopping centres and retail outlets across 14 countries. With 2.3 million square meters of lettable space and continued growth, this REIT can go far on the JSE top 40.

Another UK based company, Quilter Plc is slowly and steadily increasing its share value. Quilter is a financial services provider that provides clients with investment opportunities, annuities and retirement plans. The company also provides financial advice and life insurance products. This is one to watch, as the company seems to be on stabilising after its rebranding at the end of 2017.