High market volatility ruins the mood for investors

Wild swings in financial markets have been testing the nerves of investors around the world for the past few days – at times on an hourly basis.

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Tuesday saw the JSE All Share index decline more than 2% from its pre-Easter close, only to rally by more than 6% on Wednesday morning.

Late Wednesday afternoon, it gave up some of its strong gains to close 4.4% higher, only to fall back 1.25% on Thursday.

Basically, the index is at the same levels it was a month ago.

It’s been a roller coaster ride since the US attacked Iran on 28 February.

That event caused the JSE All Share Index to crash by nearly 8 500 points in a single day – after reaching a new record high of 128 456 points the previous day.

Talks of a ceasefire brought the relief rally, but a new attack on Lebanon by Israel the next day caused renewed uncertainty.

Commodity prices and currencies experienced the same volatility, all due to the uncertainty around the state of the war.

First quarter 2026

The unexpected war in the Middle East ruined returns for local investors in the first three months of the year after an excellent year in 2025.

The JSE Top 40 Index ended 2025 a little over 43% higher, the best since the increase of 44% in 2005.

Investors pocketed a gain of more than 45% in 2025 when adding dividends. The best in recent history was a gain of nearly 75%, excluding dividends, in 1999.

Unfortunately, the war brought a bit of agony. The index of the largest 40 companies on the JSE by market capitalisation and shares available to investors raced to a new record high of above 120 000 points at the end of February, only to close the quarter at around 108 000 points after falling as low as 98 000 points.

Everything fell.

Even gold shares retreated sharply following rumours that central banks – read governments – sold gold reserves to increase military spending. Only the energy sector showed gains on sharply higher oil prices.

Peter Little, fund manager at Anchor Capital, says in a review of the first quarter that stock markets worldwide were hit.

“Global equities recorded their worst month in over three years in March (MSCI World -6.3% month-on-month) as US and Israeli military strikes on Iran rattled investors.

“Iranian military responded to the strikes by refusing passage for vessels through the world’s most significant seaborne energy transit route, the Strait of Hormuz, driving a 63% spike in the oil price. Emerging markets, which have been strongly outperforming their developed market peers recently, were significant under-performing in March,” says Little.

“Conversely, the tech-heavy Nasdaq 100 Index, which has been out of favour recently as investors worried about the aggressive artificial intelligence (AI) capex spending, was one of the best performers in March (-4.8%), albeit still with a material negative print.”

He says the only major bright spot for equity investors was energy stocks, with the S&P 500 energy sector increasing 10% during March.

But the spike in energy prices stoked inflation fears and investors abandoned their expectations of lower interest rates around most of the world.

JSE

The local share market’s recent winning streak ended abruptly in March.

“Only a 1.6% rally by domestic equities on the last day of March saved the local bourse from delivering its worst monthly draw down since the global financial crisis almost 20 years ago,” writes Little.

“Precious metal miners, the driving force of recent outperformance, were the biggest detractors last month [March]. Gold miners (-18% in March) and platinum miners (-25%) contributed more than 6% to the JSE’s March drawdown, with the precious metal miners’ share prices tracking precious metal prices sharply lower.”

Gold saw a quarter of its value wiped out during the first few weeks of March before a late-month rally eased some of the pain. Platinum fared even worse.

Little says the pain on the JSE was not limited to precious metals miners, with drawdowns across most sectors.

“Domestic economy bellwethers, the banks, saw their year to date gains erased in March.

“Resource companies operating in the energy sector were the only real bright spot on the JSE, with coal miners Thungela (+51%) and Exxaro (+14%) rallying alongside Sasol (+55%). Glencore (+12%) was another resource company to benefit from its exposure to energy markets.”

Many losers

The figures show that losers outnumbered winners on the JSE by far during the first quarter.

No fewer than 155 shares ended the three months lower compared to gains in only 96 counters. The rest were unchanged.

Largest declines on the JSE in Q1, 2026

SharePerformanceChoppies Enterprises-77%Europa Metals-69%Cilo Cybin Holdings-53%Labat Africa-50%RH Bophelo-42%Powerfleet-42%Shuka Minerals-39%AfroCentric Investment Corporation-36%Montauk Renewables-35%Spar Group-34%Trellidor Holdings-34%Aveng-32%Sappi-31%Mantengu-29%Crookes Brothers-27%Eastern Platinum-26%Prosus-25%Harmony Gold Mining-24%Nictus-24%ASP Isotopes-24%Source: Based on Profile Data published by Moneyweb

The worst performer in the quarter was Choppies Enterprises, with a decline of nearly 80% – after being the share that posted the largest gain in the previous quarter.

At the time, there were no obvious reasons for its strong rise from R2 to R8 within three months.

That strong rise prompted a likely prediction:

“The statistics suggest that Choppies is unlikely to be on the list of the best shares at the end of 2026.”

The increase in the share price placed it on a price-earnings ratio of 62 times and trading at a price to net asset value of 31 times.

The relatively small retail chain was valued at R14.5 billion, now down to R3.3 billion.

Europa Metals took second ‘prize’ with a decline of just below 70%.

The Australian company, which is listed on the JSE’s AltX, reported a sharp drop in profit for the six months to end December 2025 from $4.8 million to only $137 000 after the sale of most of its assets.

Management announced that the cash shell of the former Europa Metals failed to buy new assets and will be delisted from the London Stock Exchange in due course.

Other notable declines were in the share prices of Cilo Cybin Holdings, Labat Africa, Powerfleet and Shuka Minerals. Mantengu Mining fell nearly 30% during the quarter following months of allegations of share price manipulation and the leak of sensitive information.

Among the bigger companies that showed large declines – Sappi, Spar Group, Eastern Platinum, Aveng, Harmony Gold Mining, Naspers, Prosus and Pick n Pay.

Winners

Telemasters Holdings took top spot in the first quarter after advancing 117% to R1.97, pushing the thinly-traded share to a price-earnings ratio of 140 times. To what extent the increase in headline earnings from 35 cents to 68 cents per share in the six months to end December justifies the increase remains to be seen.

Management says in commentary to the results that despite the continuing shrinkage of the telephony voice market, Telemasters continues to grow its service lines. It sees new opportunities in the data centre market by offering a low cost service.

There are many energy stocks on the list of winners after the sudden spurt in oil prices since the end of February.

Benchmark crude oil increased from $70 per barrel to above $114 at the end of March.

Sasol and Sasol’s BEE scheme advanced, as did coal suppliers Thungela Resources and other mining groups with coal interests.

Biggest increases on the JSE in Q1, 2026

SharePerformanceTelemasters Holdings116%Sasol112%Numeral100%Thungela Resources75%MC Mining66%Cafca57%Sasol BEE57%Orion Mining50%Randgold & Exploration44%Glencore40%Quantum Foods Holdings34%Rainbow Chicken30%South3230%AECI28%Exemplar REITail26%Marshall Monteagle26%Exxaro Resources25%Sephaku Holdings24%Sun International23%Omnia Holdings21%Source: Based on Profile Data published by Moneyweb

Randgold & Exploration increased from 65 cents at the start of the year to touch R1.30 in March before falling back to R1.02 at the end of the quarter. The strong gain followed news of progress in its legal actions for restitution of the decades-old theft of shares from the company.

Poultry producers Quantum Foods Holdings and Rainbow Chicken are on the list of winners as the market for chicken products seems to have improved.

Rainbow issued a trading update in February informing shareholders that earnings per share for the six months to end December will increase by at least 95%, followed by the results in the first week of March that disclosed an increase of 110% in headline earnings.

Overall, the rest of 2026 is shaping up to be interesting.

Investors can be certain about one fact, that uncertainty is due to persist.

This article was republished from Moneyweb. Read the original here.

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