Predictions of permanently declining fortunes have missed the mark as both the all share index and the top 40 index have extended 2020 gainsIf you had listened to prophecies of doom and gloom for SA equities a year ago, you must be annoyed with yourself right about now.
It was difficult to find anyone willing to stick their neck out that there was a chance that the market would recoup even half the losses suffered by the end of 2020, especially given that SA companies are exposed to an economy that was already on a downward spiral even before the pandemic struck.
Predictions of permanently declining fortunes have missed the mark as both the all share index and the top 40 index have extended their 2020 gains, scaling record highs since the beginning of this year. Even then, the valuations attached to SA companies such as Distell and Adapt IT tells a depressing story about the level of pessimism in our public markets. If recent events are anything to go by, it is clear that overseas long-term investors may well be trying to take advantage of an investment community with an inherent tendency to believe the worst will happen. Shareholders in Adapt IT have been offered R1bn by Canada’s Volaris, a bid that comes with what looks like a generous 56% premium.