Where did 2023 go? It felt not so long ago that I was writing the first market update of 2023, and here we are with the last. Let's review the performance of the fourth and last quarter of 2023 for the Satrix Top 40.

So how did the Satrix Top 40 ETF perform?

Over the festive season, the majority of the top 40 companies on the JSE *sleighed*: that’s 32 of the top 40 companies in the green. At the end of the fourth quarter of 2023, the Satrix 40 ETF closed at R70.66 – a 5% increase on the previous quarter (R67.50). The increase this quarter meant that the Satrix 40 ETF ended 2023 in the green, as year to date (January-December) the Satrix 40 ETF went up 3% from a price of R68.68.

Let’s look at the performance of some of these individual companies’ shares within the fund to understand the increase.

Top performers on the Satrix Top 40 ETF in December 2023

  1. Harmony
  2. Amplats
  3. Kumba Iron Ore
  4. Goldfields
  5. Clicks
  6. NEPI Rock
  7. Anglogold

Q4 was the Christmas the gold mining companies had dreamt of as Harmony, Goldfields and Anglogold were all in the green. Harmony, the best performer this quarter – and year – was up 68% this quarter alone and 105% in 2023. Meanwhile, Goldfields and Anglogold were up 35% and 16% respectively this quarter. This was mainly due to the gold price increasing 23% from the beginning of the year, thus resulting in a large increase of revenue across the gold miners.

Despite the macroeconomic factors derailing Kumba Iron Ore throughout the year, the mining giant ended the year with a bang. Kumba’s shares increased 35% this quarter as a result of their impressive financial performance, mainly due to major cost reductions and the continued confidence in the high demand for many metals and minerals.

Another big winner was Clicks, as their share price was up 27% this quarter. Consumers’ were clearly out to look good this festive season, as sales in beauty products soared, which helped the pharmaceutical retailer grow earnings and increase their market share. What’s more, an increase in dividends and its expansion plan placated shareholders, which is reflected in its impressive share price.

Winning big again this quarter was the Eastern European mall owner, NEPI Rockcastle. NEPI’s share price increased 21% this quarter as shoppers splurged across their 60 shopping centres. This was reflected in their impressive financial results as NEPI cashed in on the strength of the region’s economy.

The Comeback of the Quarter Award goes to Amplats – they gained 36% this quarter despite suffering throughout the year. Low production costs were a driving force in its efficiency and competitiveness, which ensured they outperformed their peers. Having said that, the platinum giant is still down 32% in 2023.

Bottom performers on the Satrix Top 40 ETF in December 2023

  1. Sasol
  2. Sibanye-Stillwater
  3. Anglo American
  4. BAT
  5. Implats

While the gold mining companies led the race this quarter, bringing up the rear were some of the PGM (Platinum Group Metals) companies. Especially Implats and Sibanye-Stillwater, who continue to struggle due to weak PGM prices, load shedding, cable theft and logistic woes. Sibanye-Stillwater share price fell 15%, while Implats decreased 7%.

This quarter, the Anglo American share price dropped 10% as the mining powerhouse suffered its biggest single-day drop (13%) since the global financial crisis (2007). That’s around R70 a share (R93 billion off its JSE market cap), which is all due to unveiling plans to drastically cut production in a bid to reduce costs amid logistical and operational issues.

Another company in the red this quarter was British American Tobacco (BAT). The BAT share price fell 9% this quarter, a result of the writedown of its US cigarettes business, citing an economic slowdown and a continued popularity of disposable vapes.

What a difference a quarter can make – especially for Sasol. The energy giant was 12% up in Q3, but found themselves at the very back of the pack in Q4 as their share price slumped by 29%. There are many factors contributing to this decrease, which include a decline in annual earnings due to higher costs and volatile market conditions. However, the most notable factor was most likely their failed attempt at an AGM, which had everything but an actual meeting – an hour delay due to technical glitches, after which protestors took to the stage and prevented the meeting from continuing, which resulted in the overall postponement of the AGM. Sasol’s failed promises on environmental sustainability finally caught up with them.

A Merry Christmas for the Satrix Top 40

It was a good end to 2023 for the Satrix Top 40. Any year with positive returns is a good year, however it’s important to remember that various factors may influence the performance of the market and the longer you remain invested, the better the chances of a positive return (as seen in the graph below). And with that, the 2023 season comes to an end.