In the past year private hospital giant Netcare outperformed an otherwise bullish Alsi, which easily earns the group more than bragging rights. Shares in the premier hospital operator almost doubled since last January, with Medi-Clinic leaping 40% to around R26. In May, Netcare traded above R15/share and analysts expected it would breach R20 in months.

The pharma & biotech front presents a different picture. Observers feel stocks here are fully priced but see positive prospects. Furthermore, the sector is set for two listings: Adcock Ingram (to be unbundled from Tiger Brands) and Sekunjalo's health-care subsidiary, Sekpharma. Floating would not only unlock value but could offer more choices in an arena that features only Aspen and Enaleni, SA's most empowered listed firm. Analyst Mark Ingham says if Adcock floats, its market cap could be R15bn-R20bn, equivalent to that of Aspen.

Sekunjalo CEO Iqbal Survé says there are "sufficient encouraging signs" for Sekpharma. Aspen, on the other hand reported an impressive 242% surge in profit after tax to R332m for the latest financial year. If this is a sign of good things to come, the question is: which institution isn't stockpiling this share?

Legae Securities CEO Tshepo Ntsimane, however, sees an upside in the pharma & biotech index in the long run but says "the game is tougher" at present. "With government's drive to make drugs more affordable, these companies have taken a bit of a squeeze but we expected this will subside."

At AltX, wellness start-up Wellco has defied logic. It is the sector's worst-performing stock. As in previous ones, Wellco's latest set of results is littered with red. In April, Primedia and Hiveld director Bheki Shongwe was named Wellco chairman. Days later, his contract as MD at Metrobus was unceremoniously terminated and he's now entangled in a row with his former employer contesting his sacking. Wellco pulled back from its worst performance of 1c/share last November and ranged between 16c and 30c in April-May.

Enaleni doesn't look impressive either. It started the year at 445c, rose to above R5 for a few weeks, then plunged to a 10-month low of 385c in May.

Ntsimane says hospital groups are in an enviable position of operating in an unregulated environment (which may change). With the re-rating of Netcare after the R24bn UK deal, Medi-Clinic rose, he adds. In a bid to improve revenue mix, the latter is seeking out opportunities abroad. The Middle East - where Medi-Clinic invested US$53m for a controlling equity in Emirates Healthcare - has healthy returns to offer.

Back home, the state regulator and competition authorities are unanimous about probing private hospital fees to drive them lower. The medical aid sector is also unhappy. However, changing the status quo will take time; meanwhile, those invested in this sector don't have much to fear.

Ingham warns against the possibility of regulating the market. State interference would "kill the goose that lays the golden egg", he says.

Netcare and Medi-Clinic last year earned R1,6bn from their SA businesses and paid R445,2m in taxes. However, state attention is on access to quality health care rather than tax generation.

Apart from the persistent shortage of health-care staff, the possibility of price controls is the only other threat in the long term. For now, the party continues.