2024 has just marched along as the first quarter is already behind us. Despite a tricky start to the year, March provided a resurgence and ended the quarter on a high. Let's review the performance of the first quarter of 2024 for the Satrix Top 40.

So how did the Satrix Top 40 ETF perform?

During the first three months of 2024, the performance of the majority of the top 40 companies on the JSE disappeared just like a certain Princess: that’s 27 of the top 40 companies in the red. At the end of the first quarter of 2024, the Satrix Top 40 ETF closed at R68.94 – a 2.4% decrease on the previous quarter (R70.66). Despite the decrease this quarter and the fund being 3% down from 31 March 2023 (R71.15), there is some upside as month-on-month the fund is up 3.8% from the end of February 2024 (R66.44).

Satrix Top 40 top performers in Q1 2024

  1. Harmony
  2. AngloGold
  3. Goldfields
  4. Richemont
  5. Naspers
  6. Prosus

The momentum created by gold mining companies in the previous quarter continued for the majority of Q1 as Harmony, AngloGold and Goldfields were all in the green. Harmony, the best performer this quarter, was up 32% this quarter alone and 115% year-on-year.

Meanwhile, AngloGold and Goldfields were up 20% and 9% respectively this quarter. This was mainly due to the gold price increasing 7% from the beginning of 2024 – it’s currently at its all time high. This, in addition to the increased output of gold production, resulted in a large increase of revenue across the gold miners, which put a golden smile on shareholders, especially those at Harmony as they are expected to receive a record interim dividend.

It wouldn’t be a market update without talking about Richemont. The Swiss-based global luxury goods company share price increased 12.5% this quarter as sales growth continued to impress shareholders.  

Naspers and Prosus, in which Naspers owns a majority stake, were also winners this quarter as their share prices both increased 7%. The spike in Naspers’ share price is partly due to China’s gaming regulators deciding against new rule enforcements. The news bolstered the shares of the gaming and internet giant, Tencent, in which Naspers owns 29%.

Satrix Top 40 bottom performers in Q1 2024

  1. Remgro
  2. Kumba Iron Ore
  3. Sasol
  5. MTN
  6. Exxaro

One of the biggest losers this quarter was Remgro, an investment holding company, whose interests consist mainly of investments in the healthcare, consumer products, financial services, infrastructure, industrial and media industries. Remgro share price fell 25% this quarter as a result of reporting that headline earnings decreased by 40% in the second half of 2023. This was mainly due to the impairment of Remgro’s investment in Heineken Beverages, who wrote down the value of its local business by R10 billion as a result of inflation and a tough competitive environment.

Another big loser this quarter was Kumba Iron Ore (-25%). This was due to its 2023 performance report, which highlighted lower production volumes (-5%), plans for business reconfiguration and job cuts to address ongoing logistics constraints.

Similarly to Kumba Iron Ore, Sasol’s share price was negatively affected by its 2023 performance in Q1 (-21%). Sasol’s performance was impacted by volatile macro-economic environmental factors, including weaker oil and petrochemical prices, unstable product demand, and continued inflationary pressure. As a result, sales volume declined and thus decreased profitability. It’s a toxic time for the chemical giant.

Continuing the trend of Q1, Anglo American Platinum (AMPLATS) has recently reported its production performance for the fourth quarter of 2023, which resulted in a 20% decrease in its share price. This is due to poor platinum group metal (PGM) prices and a 6% decrease in total PGM production at the back end of 2023. In addition to this, a major decline in profits buried AMPLATS’ share price further down.

Descending like the yellow submarine is MTN as its share price fell 19%. This is a result of the Nigerian currency, the Naira, being devalued twice in the second half of 2023. This affected the telecommunication giant’s profits, as MTN generates about a third of its earnings from its Nigerian business. The weaker value of the Naira plunged the group’s profits by as much as 90%.

Also on the bad side of things is Exxaro, one of the biggest coal producers in the country, as its share price slipped 17% since the turn of the year. This is a result of an expected decrease of up to 30% in 2023 profits because of freight logistics problems related to Transnet and coal prices which more than halved in 2023 compared to 2022. Seems like Santa got a discount when acquiring gifts for the bad children last year.

2024, here we go…

It was a nervous start to 2024 for the Satrix Top 40, however March was a positive month and hopefully has created some momentum to set up a green year ahead.

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).