In rand terms, the JSE finished 2022 almost exactly where it ended 2021. The benchmark Top 40 index – the one that really counts – finished last year at 66,955.5. On the last trading day of 2021, it ended at 67,129.53, a loss of 174 points over the course of 2022, which is a difference of 0.25%.

In 2022, the rand lost ground to the tune of about 7% against the dollar, and so in dollar terms the Top 40 lost about 7% of its value over that timeframe. Many major markets did much worse in the face of a global inflationary surge, rapidly rising interest rates to keep that in check, China’s losing war with Covid 19, and Russia’s ham-fisted one in Ukraine.

The MSCI All-Country World Index of stocks fell about 20% in 2022, its worst year since 2008 when it lost almost 42% of its value. It tracks equities in 23 developed economies and 24 emerging markets, including South Africa, making it as good a comparison as any for the JSE.

China’s blue-chip CSI 300 index slid 22% last year as its draconian lockdown measures throttled the economy, while the Dow Jones Industrial Average lost almost 9%. The tech-heavy Nasdaq toppled 33% after investors dumped tech stocks as storm clouds gathered over the global economy, but many analysts will no doubt see this as a buying opportunity in 2023 – the world is still wired, after all.

Europe’s STOXX 600 saw 12% of its value evaporate in 2022 but the FTSE 100, despite the continuing fallout from Brexit and other sideshows in the Monty Pythonesque circus that is British politics, managed to pull off a small annual gain – about 1% – almost mirroring South Africa’s Top-40.

One thing the FTSE and the JSE Top 40 had in common was a good year for energy companies and coal producers. Exxaro’s share price shot up almost 40% last year on the JSE Top 40, while BP’s rose about 36% on the FTSE; Anglo American, which straddles the two, only had gains of around 3%, but at least its share price finished 2022 in the black.

Oil and coal prices put in huge gains in 2022 – mostly because of Russia’s invasion of Ukraine – though the Brent Crude price ended the year only slightly higher than where it was at the end of 2021 and a slowing global economy may not bode well for oil prices in 2023. Coal prices by contrast held most of their gains, more than doubling over the year, and may have some steam in the pipeline yet as Europe seeks alternative sources to Russia for its energy needs.

Naspers managed to put in gains of around 12%, defying the global tech rout and Chinese turmoil. That certainly helped the cause of the JSE Top 40, and the many South African pension funds and retail investors who have exposure to the company. After a significant decline in half-year profits it seems the market has some faith in its narrative that the worst is behind it as the group directs resources to its more profitable entities.

The year ahead certainly has headwinds galore for both global and domestic equities. Inflation may break, but interest rates are expected to maintain their rise as central banks tighten the screws on monetary policy. Global economic growth is widely expected to slow, and the spectre of recession and even stagflation haunt the business landscape. Meanwhile, Eskom’s woes look set to go from terrible to worse and that will affect the bottom line of many listed companies and darken the outlook for the wider South African economy.

“Uncertainty” is a term that has been thrown around a lot the past couple of years and it remains a defining feature of global markets. And one thing markets dislike is uncertainty. DM/BM