Important bank in the United States puts South Africa on top of international ranking – BusinessTech

South Africa’s equity market tops Bank of America’s Global Research’s latest EEMEA Equity Strategist report, despite the worst month for markets in close to 20 years.

Following the US and Israel’s attacks on Iran and the targeting of oil infrastructure by the Persian nation, the JSE’s all shares recorded their worst month since the global financial crisis in 2008 in March.

The JSE all-share index lost R3 trillion in value in March as investment managers worldwide adopted a risk-off stance.

Nevertheless, Bank of America placed South Africa’s equity market ahead of its Eastern Europe, Middle Eastern and African counterparts in its latest Equity Strategist report for April.

While many countries in the Middle East are affected by the ongoing war, South Africa’s ranking at the top is not new, as it was at the top in March.

The Bank of America is one of the most important banks globally, as it is the second-largest banking institution in the United States and the second-largest bank in the world by market capitalisation.

The bank’s rankings are based on several quantitative inputs:

• Valuations (10%)
• Valuations vs History (10%)
• Earnings growth (20%)
• Price/EPS momentum (20%)
• Dividends (20%)
• Global Emerging Markets funds positioning upside (20%)

Bank of America said that the continued strengthening in dividends and supportive valuations vs History have widened South Africa’s lead against its competitors.

This means that South Africa’s equity market is ahead of Hungary, Türkiye, Greece, the UAE, Qatar, Poland, and Saudi Arabia.

Bank of America, however, said that South Africa’s position on financial flows was improving prior to the onset of the crisis in late February.

South African stocks dominate the top 20

When it comes to the top 20 stocks ranked by 6 screening factors, South Africa is the dominant player, with 12 South African names on the list.

The top three names for Bank of America’s analysis are Northam Platinum, Sibanye Stillwater and Ninety One.

Other South African stocks in the top 20 include Momentum, Investec, AngloGold Ashanti, Harmony, Telkom, Santam, Sasol, Gold Fields and Implats.

Bank of America noted that the screen is also now more focused on materials, which has equal representation as financials, with seven in each.

While South Africa dominates the top 20, it also has six companies in the bottom 20 in the bank’s analysis.

This includes major players such as Capitec, Shoprite, Clicks, Bidvest, Bid Corp, and Kumba Iron Ore, all of which have weighted-average ranks below 40.