The best JSE TOP40 listed shares in 2021

In the below article we identify the top performing companies listed on the JSE TOP 40 Index, highlighting broker ratings, price targets as well as a technical trading view on these companies.

JSE Top40 Index price performance
The JSE Top 40 Index has had a mixed year with the net effect being a gain of around 7.4% year to date. As of the 14th of September 2021: The MTN Group, Aspen Pharmacare and Sasol Ltd have led gains on the index.

Top 3 companies on the JSE Top 40 Index in 2021 so far

The below table information is as of the 14th of September 2021, with consensus broker ratings and price targets sourced from Refinitiv data.

1. The MTN Group

The MTN Group has been the best performing share on the JSE Top40 index year to date. Gains have followed an improving balance sheet post regulatory fines / headwinds which have plagued the company in the past.

In recent news MTN Nigeria has managed to renew its operating license for a further ten years. MTN Nigeria accounts for roughly a third of group revenue. The group has also managed to expand its fintech mobile money payment platform through a partnership with Flutterwave, which will allow increased reach for payments across Africa.

MTN has been looking to exit some of the higher risk Middle Eastern territories in which it operates, and increase focus on the African operations. In recent times, the group has abandoned its operations in Syria and is currently assessing its options in Afghanistan and Yemen. MTN is said to be in conversation with international buyers for the potential sale of its wireless business in Afghanistan.

The company while still remaining a ‘buy’ and in investor favour, trades at a premium to what is deemed a longer term fair value of R120.7 a share.

MTN -Technical Analysis

The long term trend for MTN remains up. We have however seen a short term correction of this trend, reaching a low of 11960. The price does look to have ended this correction with a bullish price reversal. This price reversal is supported by a move out of oversold territory. 13585 is the favoured upside target from the move, while traders who are long might consider using a close below the 11960 level as a stop loss indication for the trade.

2. Aspen Pharmacare

Aspen Pharmacare has been the second best performing share on the JSE Top 40 Index in 2021, having added more than 80% over the period (as of the 14th of September 2021).

The group has recently posted a strong set of results in which investors would have applauded the groups large reduction in debt, improved cash flow, dividend reinstatement and favourable forward guidance. For more information of the recent Aspen results and guidance, click here.

While Aspen remains a ‘buy’ as per a consensus of analyst ratings, the share prices has run well ahead (+16%) of the long term price target.

Aspen – Technical Analysis

The steepening trend lines on the chart above highlight a strong trend acceleration for the share price of Aspen. This is often considered a precursor to a price ‘blow off’ in technical analysis terms i.e. suggestion of a short term correction to follow.

Trend followers would not look to short the overbought signal but might prefer to buy into weakness should it occur. Should a correction manifest a confluence of support at the 20000 level might be the first area where trend followers might look for long entry into the share.

3. Sasol

The share price of Sasol has rallied nearly 80% year to date (as of the 14^th of September 2021) following a much improved performance from the group’s chemicals business and stabilization of the company’s balance sheet. Over the last financial year, $3.8bn in asset sales have helped Sasol to significantly deleverage the business as it reduces its debt burden to levels ahead of guidance.

A consensus of long term analyst price targets suggest that Sasol could still see a double digit price gain to follow from current levels.

Sasol - Technical Analysis