The rally that followed lasted about 10 weeks resulting in net inflows from foreign investors for the first time in years. Since then, domestic companies have massively underperformed the broadest index measurement, on the FTSE/JSE All Share Index as well as the major dual-listed companies.
Research shows that valuations of certain domestic sectors are at the same levels that they were in December 2017 after then president Jacob Zuma fired then finance minister Nhlanhla Nene.
Listed domestic industrials, which are particularly exposed to a weaker economy and the ills of Eskom, have de-rated heavily and are close to the ratings to which they fell after the 2008/09 financial crisis, with price-earnings (P/E) ratios of 9 and dividend yields of above 4 percent.
These valuations are well below the 10-year average and are the cheapest they have been in 10 years. The banking sector is on a forward P/E ratio of 9 and dividend yield of 6 percent, also cheap relative to December 2017 and 2008/09.