Another Covid-19 crash

The markets have once again taken a pound in with the FTSE/JSE Africa All Share Index (Alis) falling as much as 10.53% to 39 524 in morning trade.

This continues a downward trend brought by concerns that abut the economic fallout of the Covid-19 virus, which has infected 162 000  people around the globe and resulted in 6500 deaths. So far, 62 South Africans have contracted the virus.

The Alsi has fallen 31.5% since the beginning of the year. Last Thursday it closed down 9.7%, the biggest single-day drop since 1997.

President Cyril Ramaphosa said the South African government would take drastic measures, which includes the closing of schools, travel restrictions and gatherings of more than 100 people, as ways to combat the deadly virus

These efforts have not stemmed the fallout on markets, with share prices continuing to slide despite assurances that the cabinet was putting together an economic stimulus package to deal with the detrimental impact from the actions taken to combat the virus.

The biggest percentage fall was that of workforce solutions company, Adcorp which dropped 64% to R2.67. This was followed by construction group firm, Calgro M3 which, saw its share price fell 32% to R2.50

Investec’s shares also fell, but the 44.48% to R28.91 collapse in its valuation happened at the same time it was unbundling its asset management business, Ninety One.

Sasol, has continued its decline, falling 21% to R39.99. The chemicals and petroleum group has crashed by 83.29% since the beginning of the year. Moody’s has downgraded its long-term credit rating to Ba1 from Baa3 and its short-term rating to Not Prime from P-3.

The Top 40 was not spared, with the index for South Africa’s largest companies by market capitalisation falling 10.46% to 35 345. Mining company Sibanye Stillwater, for example, fell 22.57% to R18.35. 

There was a similar story at Impala Platinum, which saw its share price fall 18.72% to R80.69. 

Aside from the falling share prices, the rand also weakened against major currencies, falling 2.66% to R16.71 to the dollar, 3.41% to R18.70 the euro and 3.02% to R20.59 to the pound.