It would probably be fair to describe South African equity investors as a pretty despondent lot by now. Returns over the past three years have, after all, been disappointing, with the FTSE/JSE all-share index largely moving sideways within a fairly narrow range, and only recently breaking out of the channel in which it has found itself since 2015 to achieve new highs. However, the question is whether this is the start of a new trend or whether it will turn out to be just another tentative blip in a continuing sideways movement. Can the equity market escape the doldrums in which the economy is stuck? Although the relationship between the performance of the stock market and that of the economy can at best be described as tenuous, in the long run, it can surely not be ignored. The dismal growth performance of the South African economy over the past five years has to carry much of the blame for the stock market’s weak performance, while the negative political sentiment encouraged the do...
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