South Africa's IT and telecoms stocks had a difficult year on the Johannesburg Stock Exchange (JSE), with the vast majority of stocks losing value over the year.
The worst performing stock of 2018, according to ITWeb's calculations and Bloomberg data, was JSE newcomer 4Sight Holdings. The company saw its stock fall by 81.37% year-to-date (YTD), from R1.61 per share on 2 January 2018 to just R0.30 per share at the close of trade on 12 December 2018. The diversified holding company, which invests in industry 4.0 technology businesses, only listed on the JSE's Alternative Exchange (AltX) in October 2017, and since listing, its share price has fallen by 85% from its opening price of R2.05 per share.
4Sight was not alone in its struggles. Second-worst performer Blue Label Telecoms' share price fell by 65.31% YTD, and the third-worst performer was Net1 UEPS, which saw its stock drop by 52.85% YTD. Both companies made significant investments in mobile operator Cell C in 2017, and disappointing results from the telco that reported a net loss of R645 million in August 2018 kept investors bearish. Net1's association with the controversial and now concluded social grants contract with the South African Social Security Agency has also not inspired investors.
A number of IT stocks took heavy hits over the year, with seven stocks falling by over 45% YTD. EOH was down by 52.54%, from R68.80 per share in early January to R32.65 at the close of trade yesterday. Datatec's stock fell by 52.45% YTD; Etion (formerly Ansys) by 48.89%; and Ellies was 48.57% lower YTD.
Internet and media giant Naspers also went from one of the best performers last year to one of the worst this year, with its stock dropping 20.21% YTD and 17.71% over a 12-month period. Naspers, however, still remains the most valuable stock on the JSE, with a market cap of R1.256 trillion; it also has the most expensive share price of R2 857.15 per share.
Tumultuous telcos
The listed telecoms operators were among the worst performers, with the exception of Telkom, which saw its stock jump by 30.40% YTD. In ITWeb's 2017 comparison, Telkom had been the worst telecoms stock on the JSE, but this year it was the strongest, and over a one-year period, was up 41.08%.
Its telco peers, however, did not fare as well. The worst performer in the sector was Blue Label Telecoms, which saw its share price drop by 65.31% YTD and 60.98% over a one-year period. The stock was down to just R5.19 per share after starting the year at R14.96 per year. In 2016, in comparison, Blue Label was the second-best performer on the JSE.
MTN also had a tough year, with its stock dropping 35.74% YTD from R133.73 at the beginning of January to R85.94 on 12 December. Vodacom also saw a drop of 14.08% YTD, but it was only down by 4.79% over a one-year period.
Top performers
The standout stock of the year was TeleMasters, which saw a 130% increase in its share price since 2 January. If this list had been compiled a day earlier, however, it would have been a very different story, as TeleMasters' share price shot up 64.29% yesterday from R0.70 at the close on 11 December to R1.15 at the close on 12 December.
The second-best stock of the year was last year's top performer, MiX Telematics, which saw its share price increase by 59.51% YTD. Altron was in third place, growing its stock by 49.16% YTD, while Mustek, Telkom and Capital Appreciation all performed well, with share prices rising by over 20% YTD.
IT and telecoms stock performance in 2018
* Share prices are all as at the market close on 12 December 2018; data from Bloomberg.
** Year-to-date percentage change was calculated between 2 January 2018 and 12 December 2018.
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