Daily Insider: The astonishing crumbling in share prices of JSE’s resources stocks

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The astonishing crumbling of JSE’s resources stocks 

While researching for this morning’s BizNews Breakfast Briefing, I got sucked into some astonishing data. My Warren Buffett-inherited belief that the best companies to co-own are those leveraging human ingenuity has kept me away from resources stocks. Except to marvel at those who called their cycle correctly outperforming in the monthly Corion Report.   

But after a 6% smack in the JSE’s Resources index yesterday, I took a closer look. And was astonished how what has happened there makes the US’s much publicised Tech Wreck appear mild by comparison.

In the last four months while the Nasdaq dropped 17%, the share price of local mining hero Sibanye has halved (from R75 to R38); Impala has fallen from R275 to R152 and Kumba from R680 to R440.

SA’s other mining counters have had a similar experience. It’s carnage wherever you look. What point might that prove? I really don’t have a clue. Except to be reminded those kites which fly highest in the updraft also tend to fall fastest when the wind changes.

WATCH: South Africa’s future hangs in the balance because of a vacuum of ethical and courageous leadership, coupled with stunted GDP growth, political uncertainty and fragile social cohesion. The Institute for Risk Management South Africa’s 2022 Risk Report highlights several pitfalls bedevilling the country and informing three possible scenarios likely to play out in coming years. BizNews spoke to IRMSA’s chief risk advisor, Chris Palm, about the prevailing risks for the country, what pivotal shifts could remedy the situation, and whether or not he believes we’re a failed state already.


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