Traders Corner founder Garth Mackenzie revealed the tremendous wealth destruction of companies operating in South Africa under President Cyril Ramaphosa.
Ramaphosa took over from former President Jacob Zuma on 15 February 2018 after Zuma resigned following political pressure.
There was tremendous positivity around the country with the hope that Ramaphosa would usher in a new dawn for South Africa.
Referred to as Ramaphoria, his ascension to power was seen as a positive shift from the Zuma era marred by corruption and economic decline.
The public had high hopes that Ramaphosa’s leadership would bring about meaningful reforms, fight corruption, boost the economy, and address social issues.
However, over time, the initial excitement faded as the country’s challenges proved to be complex and difficult to resolve.
In many cases, the situation under Ramaphosa got worse. Eskom’s decline accelerated, and the country is now experiencing constant load-shedding.
The railways collapsed, many municipalities became dysfunctional, and crime reached disastrous levels.
The result is poor economic growth, rising unemployment, and skilled people leaving the country for a better future.
Many business leaders warn that the country is on the cusp of becoming a failed state, with the risk of food and water shortages.
Sygnia CEO Magda Wierzycka said South Africa is already a failed state and that the government is sabotaging businesses and killing the economy.
She added that the poor economic performance means the country has become irrelevant among international investors.
Pick n Pay CEO Pieter Boone warned that increased load-shedding would impact the food supply and creates water shortages.
It increases the risk of civil unrest, which will cause tremendous damage to an already fragile economy.
Wealth destruction under Ramaphosa
Mackenzie posted details of the wealth destruction under Cyril Ramaphosa since he took office five years ago.
“If you’d piled into SA Inc stocks in February 2018 on the promise of a new dawn and held on, you’d have suffered wealth destruction that seemed inconceivable at the time,” Mackenzie said.
He calculated the returns in US Dollars if you invested in SA Inc. stocks over the last five years, with telling results.
“Retailers were a disaster. Banks – half your dollars gone unless you owned Capitec. Telecommunications were awful,’ he said.
The charts below show the wealth destruction, measured in US Dollars, of $10,000 invested in South African stocks over Ramaphosa’s presidency.
Food retailers
Pick n Pay, Shoprite, and Spar have all lost value in US Dollars over the last five years.
Banks
Absa, Standard Bank, and Nedbank lost a large chunk of their value.
Telecommunications companies
Vodacom, MTN, and Telkom struggled to provide good returns to shareholders.
Clothing retailers
Mr Price, Pepkor, Truworths, and TFG lost money in US Dollar terms.
Catering and hospitality
City Lodge, Tsogo Sun, and Sun International were hammered after Ramaphoria wore off.
