The best that can be said of the past year's tragedies, crises and rumours is that they have made the equity market interesting.
One factor dominated: the stunning collapse of the rand. Few had time to ponder whether it was a vicious plot by some faceless malefactor. A mad rush for rand hedge stocks sent the Resources index rocketing up 47% for 2001 and 68% for the 12 months to the end of February.
So it's no surprise that the big gainers in this year's ranking of the Top 150 companies by market capitalisation are the rand hedge counters. The ranking is based on the market value of all fully paid and issued ordinary shares, calculated on the basis of the closing price on the last trading day of February.
Overall, the market performed quite well in 2001. The All Share index ended the year 25% up, though it fared dismally in dollar terms. Liquidity was 17% better than the year before and the total value of shares traded (excluding arbitrage) was up 13%.
At the time of writing (late April), the rand was holding on to positive gains, testing the R10,50/US mark. It was partly a factor of dollar weakness but there was also demand in the market for rand.
It left traders and analysts biting their nails. Resources stocks had had a good run and were fairly priced, if not overpriced. Further gains were premised on continued rand weakness or a strong upturn in commodity prices. Gold had just broken through $310/oz, a psychological barrier. For the moment, gold was a safe bet (the Gold index was up 155% in the 12 months to the end of February). The oil price, too, showed no signs of falling back to earth as the Middle East was still tense, meaning Sasol and Energy Africa remained good investments.
But there was still lingering uncertainty over what the rand would do. For so long, and despite what the fundamentals suggested, the direction of the rand was one way - down. Now there were signs that the beleaguered currency might actually hold its ground, an opportune time for sector rotation.
The question is, into what? Financials look undervalued. The sector had a torrid time over the 12 months to the end of February. It was down 11% for the period but volatile throughout. Rampant inflation has supported high expectations of further interest rate increases, which take the shine off banks. Industrials have come back impressively since September 11 - the sector fell 15% in the aftermath but regained the ground. Stockpicking is the order of the day here.
Despite big moves in market capitalisation, there is little movement in the rankings themselves. Anglo American Plc remains the undisputed heavyweight with a market cap of R292bn. BHP Billiton Plc moves two places up the ranking into second spot with a market cap of R150bn - a significantly bigger company after the merger of BHP and Billiton. Richemont on R124bn holds steady in third place.
The stand-out stocks - that is, those that were not carried by any kind of wave of sentiment - are an eclectic bunch.
Paper and pulp manufacturer Sappi moves 10 places up the ranking to 13th place, increasing its market capitalisation an impressive 140%. In the 12 months to the end of February investors poured into the share, fuelling a 123% rally. It's an emphatic endorsement of CE Eugene van As's ambitious expansion strategy. The most recent acquisition was the coated fine paper division of Potlatch Corp in the US, valued at US480m or about R5,7bn.
Mobile telephony specialist M-Cell still can't win favour with the market. Its market capitalisation is down 28% despite positive reports from its foray into Nigeria. The market's appetite for telecoms stocks is nowhere near what it was at the height of the boom early in 2000.
IT group Dimension Data tumbles 19 places to 27th spot. The past 15 months have been horrible for chairman Jeremy Ord and his team as they have learnt the hard way what it is to be listed on the London Stock Exchange and exposed to the scrutiny of international investors.
And what happened to transport and services group Imperial, slipping five places down the ranking and losing 21% of its market capitalisation? Investors shied away from the business model, fearing the company was making too strong a move into financial services.
Furniture exporter Steinhoff moves nine places up the ranking to 35th. Its market capitalisation is up 37%. It now has deals in Australia and the UK, part of a plan to build the group into a global manufacturer. It's finding willing markets for its rand-hedge exports. The market likes it too.
It's a similar story for Tongaat-Hulett, the sugar and aluminum producer. Both commodities are exported.
Health-care group Netcare jumps 33 places up the ranking to 51st. Its market capitalisation is up 98%. A string of acquisitions has kept the group's earnings on the rise and the share price has followed.
Anything could have happened by the time you read this article. Sentiment changes, sectors come into vogue and others fall out of favour. What's interesting to note is that 150 biggest listed companies by market cap grew their aggregate market value by R416bn in the 12 months to the end of February. The top 20 companies alone grew their market value by R406bn, meaning the remaining 130 companies created just R10bn in aggregate value. Obviously, among these 130 companies there were gems, but the size and growth of the biggest 20 proves that big companies pull investment.