Staff Writer1 February 2022
Many South African tech shares started the year in the red, following the trend set by mega-cap tech stocks in the United States.
The share prices of large technology companies like Netflix, Tesla, and Amazon were hard hit last month.
This decline, which many analysts see as a long-overdue correction, came after the Federal Reserve hinted that the central bank would act to slow inflation.
Many investors expect four or more interest rate hikes in 2022 – significantly higher than predicted last year.
Higher interest rates typically lower the risk appetite from investors, and tech stocks, which have higher valuations, are an immediate victim.
It was, however, not only tech stocks that suffered. Cryptocurrencies like Bitcoin also plummeted over the last few weeks.
The local market was not spared. The majority of JSE listed tech shares declined, with EOH taking the biggest knock with a decline of 28%.
Other companies that showed a significant decrease include Net 1 (-15%), Labat Africa (-13%), and Altron (-9%).
A few local tech stocks did, however, show good gains. The winners include Silverbridge, which increased by 21%, MTN, which jumped 11%, and Vodacom, which rose by 9%.
The table below provides an overview of the performance of JSE listed technology companies over the last month.
