Predicting market movements can be hazardous, as many fund managers polled by Merrill Lynch in late 2004 have found. Their consensus forecast of the FTSE/JSE all share index's (Alsi) total return in 2005 was 16% - it came in almost three times higher at 47,3%.

According to the World Federation of Stock Exchanges (WFSE), this made the JSE the world's seventh-best performing market in local currency terms. The average performance of all 57 WFSE members in local currency terms was 16%, with a best 118,9% from the Columbia Stock Exchange and a worst 1,4% from the US Nasdaq.

Beyond underestimating the SA market's upward momentum, fund managers also failed to anticipate the positive effect of the flood of money pouring in to emerging markets. In 2005 foreign net investment in SA equities soared 56% to R51,9bn - eclipsing the record of R42,3bn set in 1998 - and accounted for 42% of total turnover on the JSE.

Most fund managers were also left flatfooted by the surge in resource prices. In its late 2004 survey, Merrill Lynch noted only "limited interest" in resource shares, the sector that proved to be 2005's star performer. Confounding the sceptics, the FTSE/JSE resources index ended the year having produced a total return of 64,6%. This compared with a lower, though still impressive, 33,6% from the financial & industrial top 30 index.

The market's run in 2005 left the Alsi at a record high of 18 172 at year-end and 143% above its April 2003 bear market low. It also lifted the JSE's total market capitalisation 39,7% to R3,586 trillion which, according to WFSE data, made it in US dollar terms the world's 17th-largest stock exchange. This was down from 14th position at the end of 2004.

In terms of liquidity (turnover as a percentage of total market capitalisation) the JSE held its own, staying in 21st position. Liquidity did, however, fall slightly from 38% in 2004 to 34% in 2005 and still remained well below levels in the world's most active markets. For example, in 2005 the New York and London stock exchanges recorded liquidity levels of 94% and 112% respectively and the Australian Stock Exchange 83%.

Given the SA market's rampant bull run, another area where the JSE could have been expected to have done better was on the new listings front. But the erosion of listed companies continued, with 35 delistings outnumbering 20 new listings, including six on the alternative AltX market. The total number of listed companies fell 4,1% to 373 at the end of 2005. The number of listed companies peaked at 699 in 1999.

But the number of delistings did slow in 2005, compared with 39 in 2004, 53 in 2003 and 79 in 2004. Delistings in 2005 also included the removal of many long-defunct companies such as LeisureNet, Siltek, Dynamo Retail, DNA, Advanced Technical Systems, Choice and Chariot.

But there were a number of companies that will be missed. Electronics group Grintek was one. It disappeared from the boards following an offer worth about R540m to minorities from Swedish group Saab. Another was Afrox Healthcare, swallowed up by a private consortium in a BEE deal. Afhealth had a R3,3bn market capitalisation.

The SA market also lost a unique company when United Services Technologies (UST) delisted in January 2005. UST, which had a market capitalisation of R2bn, was an avenue into the global supply chain industry.

Though smaller, with a market capitalisation of only R570m, IT equipment retailer Connection Group will also be missed. Acquired by the JD Group in November, Connection left the market on a high note having just produced its best results yet.

Another dynamic company, insurer Capital Alliance (Capall), fell prey to Liberty Life in April 2005 for R3,1bn. The deal reflected the global trend towards consolidation in the life industry; Capall itself had swallowed up nine life insurers since 1995.

Less missed will be another life insurer, Sage, which after a 14-year listing, marred by financial difficulties in latter years, finally bowed out in September 2005 following an offer worth R645m from Momentum Life.

Overall delistings in 2005 were not earth-shattering; but neither were new listings - though the total of 20 was an improvement on 2004's 16 and 2003's eight. But again notable was the absence of any initial public offerering (IPO), with all listings undertaken by way of spin-offs of subsidiaries, private placings or reverse listings. Since 1999 there has been only one IPO - Telkom in 2003.

"Private placings in which institutions supply irrevocable undertakings provides companies with more certainty," says John Burke, the JSE's listings manager. They also eliminate the need to register a prospectus, though, he says, JSE rules on pre-listing are at least as strict.

The year's potentially biggest listing, Waco, by private equity firm Ethos, was snatched away from the JSE. Waco's listing was expected to be worth about R4bn, but it fell through following Ethos' acceptance of a higher offer from a foreign private equity firm.

In the end only three listings topped the R1bn mark, with the initial capital raised by all listings just topping R12bn. This excludes the listing of sxr Uranium One which was formed following the takeover of Canada's Southern Cross Resources by Aflease Gold & Uranium Resources in December. Sxr's market capitalisation was R6,75bn in mid-May 2006.

The year's largest listing was packaging manufacturer Consol, listed with an initial market capitalisation of R4,6bn following its unbundling by AVI in February 2005. The year's second- biggest listing saw an initial R2,8bn capital introduced in November by Nigerian company Oando, which has service stations as its main revenue source.

Third in line was Makalani Holdings, which listed in May 2005 following the placing of linked units worth R2,5bn. Makalani is a financial sector charter-compliant vehicle, investing primarily in BEE deal mezzanine finance.

But despite only modest levels of new listings, total capital raised on the JSE in 2005 was R82,2bn, up from R41,8bn in 2004, R22,6bn in 2003 and R80,2bn in 2002.

The bulk of the capital raised in 2005, R50,7bn, was by way of share issues undertaken to finance acquisitions. Rights issues, of which there were nine, raised R1,89bn with the largest, Western Areas, raising R639m.

Rights issues have waned in popularity, explains Burke, with most companies choosing the simpler method of share issues to specific buyers for cash. This method raised R13,3bn in 2005.

Last year appears to have marked a turning point for the JSE and Burke is optimistic that new listings will increase.

"There is a lot of interest and we have a good pipeline," he says. "Most private placings are hugely over-subscribed." But, he says, the JSE will never return to the listings-boom days of the late 1990s, as far stricter listing rules preclude this.