All Share bucks like a wild pony

The year of the horse according to the Chinese zodiac, 2014 has been one of the wildest for the local bourse, with the All Share index reaching record levels - then falling precipitously.

At some point, pundits thought the JSE might end the year at the 60000 mark, despite the jittery global economy.

The JSE All Share index started the year at 46250, rising to 52000 by July. It seemed nothing was going to stop it. But in October the market nose-dived to near January levels.

This week it was trading at about 48000, weighed down by political tension between Ukraine and Russia and the slowdown in the Chinese and German economies. In the year to date, the JSE All Share index has grown a mere 5%.

If you had invested in resources and construction shares this year, you would be a lot poorer.

For example, a R10000 investment in Group Five in January would now be worth only R6500, even though the company was not fined by the Competition Tribunal over the rigging of contracts for the 2010 World Cup stadiums. It was the main whistleblower and received immunity.

But, said asset manager Anchor Capital, Group Five's latest trading update did dent investor sentiment when it warned that half-year earnings would be under 20%, compared with the previous year.

Other poor performing construction shares included Aveng (down 35.7% this year), Stefanutti Stocks (down 44.%), Murray & Roberts (a drop of 25%) and WBHO, which dropped 7.5%.

Aveng recently told the market that its order book declined 2% in the six months through September, weighed down by the Australian unit, where most of the projects are being completed.

Construction was affected by the lack of government spending on infrastructure, despite the lip service paid by several cabinet ministers to the issue.

For those still in resources, the decline in iron ore demand in China has led to steep losses for producers such as Assore and Kumba Iron Ore.

Assore's share price has plunged to a five-year low - down more than 56%. Kumba Iron Ore fell almost 46.5%. Last month, Assore told the market that it expected interim profit to shrink by as much as 45% compared with the previous period, while headline earnings per share are predicted to drop by as much as 46%. Assore may be knocked out of the JSE Top 40 index next week when market capital are reweighted.

Lonmin, the world's third-largest platinum miner, also had a torrid year. Its production has been hit by prolonged strikes, and its share price fell more than 45%.

Old Mutual's low pain threshold for this stock was evident in its decision to dump five million shares recently.

Even Ivan Glasenberg, Glencore's low-key CEO, said it was "uneconomical" for his high-flying commodities trading company to hold on to its 23.9% stake in Lonmin.

Another that has fallen on hard times is Harmony Gold, which is in talks with labour unions over cutting 1500 miners at its Kusasalethu mine - news that caused its stock to give up 20%.

Yet, despite this below-par performance, Citi's analysts, led by Heath Jansen, said Harmony remained one of its most favoured stocks for 2015. His other favoured mining houses were BHP Billiton, Royal Bafokeng Platinum and Northam Platinum.

The fact that the government might go ahead with the implementation of a carbon tax, which could cost firm s more that R600-million a year, does not bode well for companies such as ArcelorMittal. Its share price fell 26.9% this year. Adding to its woes is parliament's trade and industry portfolio committee's recent urging to the government to push ahead with a developmental price for steel.

The biggest loser for the year, hands down - excluding African Bank, which is now under curatorship - is electrical company Ellies Holdings.

The maker of satellite television reception equipment has lost a mind-boggling 73.2% this year. This week it announced a rights offer and warned investors that earnings would drop by about 159%.

Nonetheless, Eskom's pension fund purchased almost five million shares in the company, and the Government Employees Pension Fund (Mazi Capital) acquired 31.6 million shares last month.

As analysts pore over their stock picks for next year, consensus is emerging on a few .

Simon Brown, from JustOneLap, picked Richemont, Naspers, Capitec and Calgro M3 as four worth considering.

Calgro, he said, was "the only construction stock worth considering". The company builds low-cost houses once a buyer has confirmed funding.

On Capitec, he said that while people were avoiding unsecured lenders since African Bank's collapse, Capitec was "more than just a lender, with real branches and bank accounts at prices that the big four banks can occasionally try to match but ultimately can't compete against".

Sanlam Private Wealth concurred on Richemont and punted Anglo American, Steinhoff and FirstRand.