Coronavirus/Commodities: the stocks that have suffered the most on the stock market
With the Covid-19 pandemic, many raw materials have seen their prices plummet. A devastating situation that mechanically affected African commodity stocks. Ressources looks back at the five listed companies1 that have lost the most value on the stock market since the beginning of the year. A list exclusively… South African, with the Johannesburg financial centre continuing to dominate its continental peers (80% of the African market capitalisation) by head and foot.
1Excluded from this ranking are foreign companies with a secondary listing on an African market (e.g. BHP Billiton, Glencore Xstrata, etc.), as well as companies that derive all or part of their revenues in Africa but are only listed abroad (e.g. many junior mining companies active on the continent but listed internationally).
1 - ANGLO AMERICAN
Born in South Africa at the beginning of the previous century, the Anglo American mining group, which is very active in the southern tip of the continent, has seen its stock market valuation melt like snow in the sun since the beginning of the year. With its share price down 40% and a contraction of more than 10 billion dollars in its capitalisation over the period, the company is the African commodity-linked listed company that has lost the most - in absolute market value - since the beginning of the coronavirus crisis. A record that the company’s shareholders would certainly have done without.
Loss in % since the beginning of the year: -39.44%.
Year-to-date market capitalization lost: $10.05 billion
2 - ANGLO AMERICAN PLATINUM
South Africa’s Anglo American Platinum (Amplats), the world’s leading platinum producer, has, like its main shareholder Anglo American, been particularly hard hit by the recent stock market crash that hit the international financial markets. Johannesburg, where Amplats is listed, is no exception. And as if that were not enough, the group had to reduce its 2020 production prospects in early March due to « force majeure », when one of its sites was temporarily shut down after an accidental explosion occurred there. Investors were caught unawares and immediately sanctioned the stock. As a result, since the beginning of the year, the stock has lost half of its value and total market capitalization has evaporated by more than $9 billion.
Loss in % since the beginning of the year: -53.26%
Year-to-date market capitalization lost: $9.17 billion
3 - SASOL
The rainbow nation’s historic industrial flagship and a pioneer in the transformation of coal and natural gas into liquid hydrocarbons, the petrochemical group Sasol (Suid Afrikaanse Steenkool in Olie, for « South African Coal and Oil », in Afrikaans) recently acknowledged that it was working on a « series of actions likely to strengthen its balance sheet », with a « potential capital increase » under consideration to « manage short-term financial commitments ». An announcement that immediately scared off investors. With a decline of nearly 92% since the beginning of the crisis, Sasol is - in percentage terms - the most heavily sanctioned stock in our ranking. As for the company’s stock market valuation, it has fallen by nearly… 8 billion dollars. An unprecedented descent into hell.
Loss in % since the beginning of the year: -91.85%.
Year-to-date market capitalization lost: $7.72 billion
4 - IMPALA PLATINUM
Like Amplats, Impala Platinum - the 3rd largest platinum producer in the world - has seen its share price fall dangerously since January. Indeed, in the wake of the economic crisis following the Covid-19 pandemic, the price of the precious metal extracted by the company has fallen back to a level that has been seen more often since 2002. A purge that will de facto have serious consequences for Impala’s profitability. Anticipating this negative development, market operators sold off the stock massively on the Johannesburg stock exchange, leaving it trading at only 40% of its value at the beginning of the year.
Loss in % since the beginning of the year: -56.06%.
Year-to-date market capitalization lost: $3.53 billion
5 - KUMBA IRON ORE
Africa’s leading iron producer (40 million tonnes in 2019), the South African mining company Kumba Iron Ore has, despite solid annual results for 2019 ($4.28 billion in sales and $1.92 billion in profits), also suffered from widespread market mistrust. Down by nearly 40% since the beginning of the year, the share price seems to have already incorporated the drastic drop in Chinese demand, which should become clearer in the coming months. Pending the resolution of this uncertainty, $3 billion in valuation has already been lost.
Loss in % since the beginning of the year: -38.74%.
Year-to-date market capitalization lost: $3.01 billion
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