Can The Jse Head Upwards Forever? (spoiler – It Can’t) |

I looked at the charts, and noticed something that I think is a little concerning the JSE has been on a bullish, ever-upward trend for almost five straight years now. Take a look. First, heres the chart for the JSEs performance over the last year. Note the steady increase the JSE is up over 26% over the last year. Now, look at the three-year chart. Finally, heres the five-year chart. As you can see, with the exception of 2011, when the JSE was basically flat, its been up, up and away since 2009, the year of the Great Recession. And that strikes me as a little worrying. You see, Im not convinced that South Africas economic fundamentals have improved to the tune of 166% in that period. In fact, in a lot of ways, the economy is looking worse now than it did back in 2009, even as stock prices have almost tripled. For example, consider the banking system. In 2009, South Africas banks looked seriously impressive, especially when compared with the troubled banks in Europe and the United States. Today, however, the banking system is looking a lot more rickety thanks to rising non-performing loan impairments, particularly in unsecured loans to consumers.
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