There may have been many public holidays in April, but that didn’t stop the market from reacting to the broader geopolitical turmoil. With recession concerns as a key theme, which stocks did well and which ones delivered a nasty drop?
This podcast is an overview of recent big share price moves among larger local companies on the JSE, revealing some interesting trends. 

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Transcript:

April may have been filled with public holidays, but that doesn’t mean that we didn’t see some meaningful moves on the local market. For this edition of Ghost Wrap, I decided to filter for share price moves in April of 10% or more in either direction.

This is rather different to looking at year-to-date moves, as some of the significant activity earlier in the year is still baked into those moves. For example, a number of the clothing sector names still haven’t recovered from the horrors of January, but there hasn’t been nearly as much action since then in those names. By looking at just April, we are looking at recent momentum.

It’s also important to note that I focused on companies with larger market caps in this analysis. Small-cap and even some mid-cap companies with large bid-offer spreads can show substantial percentage moves for reasons purely related to liquidity rather than underlying trends in sentiment and earnings. There may also be names that moved only slightly less than 10% over that period, which means they wouldn’t come up on the stock screener. You have to pick a cut-off at some kind of number! This episode is therefore meant to just give you a sense of where recent momentum has been, rather than an exhaustive list.

And with that, let’s start with the droppers before getting to the whoppers.

The droppers

Let’s just get Anglo American Platinum out of the way, as it bucks the positive trend we’ve seen in the broader platinum sector. The company is on the cusp of the demerger from Anglo American, so there’s just a ton of noise in this one and the share price has been all over the place. Given the strong performance of the platinum sector this year, I’m happy to chalk this up to an anomaly rather than a useful insight, so onwards we go.

As for Sasol, I’m afraid it’s a tragedy rather than an anomaly.  Down around 16% in April, the market just cannot find any love in its heart whatsoever for Sasol, having further punished the stock on the basis of broader recessionary concerns and a production update that was filled with bad news about coal quality and the impact that it is having on Secunda Operations. Although the announcement did have some positivity in it regarding the recent performance of Transnet Freight Rail, this wasn’t enough to improve market sentiment towards the stock. And even when Sasol does seem to catch a break, like when the average sales basket price for the International Chemicals business moves higher, they suffer a knock to production that ruins the numbers anyway.

Sasol is a stock that I would not want to own in a recessionary environment filled with nervous punters. For large investors to get behind Sasol, we need to be in serious risk-on territory. Thanks to what’s going on in global politics right now, I don’t think we are in a risk-on environment. Whilst I completely understand that with cyclical stocks you are supposed to buy them when things look really bad, you do have to wonder what the catalyst for improvement will be at Sasol.

Much as Sasol is known to be a risky asset, we can’t really say the same about Aspen. They are in the pharmaceuticals game, particularly in manufacturing and distribution of drugs. Investors would see this as a blue-chip stock. In fact, they would probably be tempted to refer to it as defensive! Sadly, there’s a difference between being defensive and being a wide-moat business. You can be in a defensive sector, but if your market positioning is relatively weak e.g. because you don’t really hold the power in the value chain, then you can still end up having a bad time.

Aspen took a 24% dive in April based on the market panicking in response to an announcement of a material contractual dispute that could hit EBITDA by R2 billion – that’s a very big number. The broader issue is that Aspen’s business model is vulnerable to US tariffs, which are likely to impact global supply chains and where things are manufactured. If there’s any silver lining for Aspen right now, it’s that the share price at least found some support, bouncing off the 52-week low of R105.75 to reach a closing price for April at just over R124. As I mentioned, that’s unfortunately still a long way down for the month.

The whoppers

On we go to the winners, with a reminder that the local market loves quality stocks. Even though they tend to trade at demanding multiples, these are seen as relative safe havens on the local market. The multiples never seem to unwind, with the share price simply moving in response to earnings.

Capitec is a perfect example – and perhaps the best example, actually. Up 11% in April, the market simply adored the results for the year ended February 2025. And why not? Headline earnings increased by 30% and the dividend was up 34%. There were a number of other really encouraging metrics as well, like growth among high earners and the rather insane market share that they enjoy among the youth population. Sure, a major economic knock to South Africa wouldn’t do their impairments any favours, but this isn’t stopping the market from buying into this growth story. Capitec is a wonderful example of the power of winning market share in a lucrative profit pool, even if the broader economy isn’t growing by much. And yes, the multiple certainly suggests that this should all be priced in, but that’s just not how the local market seems to work. These quality stocks just stay expensive.

PSG Financial Services also came out of the PSG stable, just like Capitec. And just like the bank, this is seen as a high-quality business with a wide moat and great growth prospects. The trick at PSG is the distribution network, which helps gather assets that are subsequently managed or at least administered by the group – for a fee, of course. The recent results show that the model works, with the share price up more than 14% in April. Strong businesses get rewarded in tough markets and although PSG is exposed to overall levels of wealth and where the market levels are sitting, they have proven an ability to grow in almost any conditions. That’s important.

The third high quality business that got the market excited in April was Clicks, with a move of 16.7%. Like the aforementioned companies, this was a results-driven move based on Clicks seeing improved numbers in its wholesale business and ongoing solid numbers in the retail business. Diluted HEPS was up 13.2%. There are a lot of strong, defensive categories in the Clicks business model, supported by arguably the best rewards programme in the country.

To close off, it’s worth noting that market moves aren’t always explained by news flow. Although the three names above all had earnings releases, Woolworths for example was up more than 12% in April – admittedly after some heavy selling pressure towards the end of March that gave it a low base – but there wasn’t a single important SENS announcement from the company in April. The selling pressure continued into the first week of April before the stock caught a bid, so these movements are driven by other factors like portfolio rebalancing by major institutional holders, as well as general market liquidity and key levels that traders watch for. This is why you can never blindly use stock screeners in order to find trends, as there’s a big difference between a meaningful move based on fresh earnings news (or a deal announcement) vs. a move from general volatility. Redefine Properties is another great example by the way, with a 10.5% gain in April and not a single relevant SENS announcement.

So, aside from a couple of names that don’t have obvious explanations for the move, we can take a lesson from what we saw in April: the best names on the JSE (the high-quality companies) are entirely capable of staying expensive, even when there’s broader economic turmoil. In fact, that seems to be the case especially when there’s a risk-off environment! When these high quality companies release results, the market is just looking for confirmation that things are heading roughly in the right direction. These high multiples seem capable of staying expensive.