Market Update

Global: Growth continues In the US, macroeconomic data remained encouraging with the better than expected Q3 GDP growth number of 3% surprising on the upside. Results from the tech sector were encouraging whilst corporate earnings were above expectations. In spite of concern over stubbornly weak inflation, investors remained confident and markets achieved new highs. Read the full article Domestic: A sad tale Of particular significance for the local market was the release of the much anticipated Medium-Term Budget Policy Statement by Finance Minister Malusi Gigaba. It unsurprisingly painted a grim picture of the dire financial straits that the country is in. The main shock is that the projected revenue shortfall for 2017/18 is a staggering R50.8bn – due to weak economic growth and below par tax collection. This translates into a cumulative R209bn budget shortfall over the next three years.... Read More

Global: An uneasy North Korean stand-off In spite of the ravages of Hurricane Harvey and deteriorating US/North Korea relations, US equity markets continued to trade higher, boosted by positive economic data which included an upward revision of Q2 GDP from 2.6% to 3.0%. The Dow Jones returned 0.26% and surpassed the 22,000 points level for the first time. The S&P 500 returned a paltry 0.05% while the tech heavy NASDAQ delivered 1.27%. Read the full article Domestic: Come December The market breathed a sigh of relief when Moody’s rating agency elected not to release their scheduled ratings review on the basis that nothing material had changed in the general economic outlook to warrant one. The failed no confidence vote against President Zuma resulted in considerable Rand volatility. Somewhat surprisingly the market appeared to take some cheer on the passing of... Read More

Global: An uneasy North Korean stand-off In spite of the ravages of Hurricane Harvey and deteriorating US/North Korea relations, US equity markets continued to trade higher, boosted by positive economic data which included an upward revision of Q2 GDP from 2.6% to 3.0%. The Dow Jones returned 0.26% and surpassed the 22,000 points level for the first time. The S&P 500 returned a paltry 0.05% while the tech heavy NASDAQ delivered 1.27%. Read the full article Domestic: Come December The market breathed a sigh of relief when Moody’s rating agency elected not to release their scheduled ratings review on the basis that nothing material had changed in the general economic outlook to warrant one. The failed no confidence vote against President Zuma resulted in considerable Rand volatility. Somewhat surprisingly the market appeared to take some cheer on the passing of... Read More

Global: Economic growth positive In the US, all three major equity indices reached all-time highs with the S&P 500 gaining 1.93%, the Dow Jones 2.54% and the tech heavy NASDAQ 3.38%. The NASDAQ gain was largely driven by spectacular results from Facebook which saw the counter return a whopping 12.10%. The market was generally spurred on by significant improvements in economic data as well as further Dollar weakness. Read the full article Domestic: Political uncertainty remains In spite of a deteriorating political situation, the local equity market shrugged off the negativity and experienced its best month for some considerable time. The re-emergence of a risk-on attitude particularly on the part of global investors saw the JSE/FTSE All Share return a significant 7.03% in total return terms. Read the full article

Global: Economic growth positive In the US, all three major equity indices reached all-time highs with the S&P 500 gaining 1.93%, the Dow Jones 2.54% and the tech heavy NASDAQ 3.38%. The NASDAQ gain was largely driven by spectacular results from Facebook which saw the counter return a whopping 12.10%. The market was generally spurred on by significant improvements in economic data as well as further Dollar weakness. Read the full article Domestic: Political uncertainty remains In spite of a deteriorating political situation, the local equity market shrugged off the negativity and experienced its best month for some considerable time. The re-emergence of a risk-on attitude, particularly on the part of global investors, saw the JSE/FTSE All Share return a significant 7.03% in total return terms. The suspension of the mining charter impacted the Mining Index which improved by a... Read More

Global – Sell in May? The adage “sell in May and go away” certainly didn’t hold true for both global and emerging markets this month as the MSCI World Equity Index returned 1.78% and the MSCI Emerging Market Index 2.80%, both in Dollar terms. Being out of the market was certainly not the right place to be. However, this unfortunately wasn’t the case for the JSE/FTSE All Share Index which was most disappointing, ending the month down 0.42%. Read the full article Domestic – Rating agencies call the shots! Whilst May began on a positive note for the local market, the uncertainties surrounding President Zuma and ‘State Capture’, coupled with the overhang of a possible further sovereign debt downgrade as well as a sharply declining oil price, all contributed to a risk-off attitude prevailing – with the result that the... Read More

Global – Sell in May? The adage “sell in May and go away” certainly didn’t hold true for both global and emerging markets this month as the MSCI World Equity Index returned 1.78% and the MSCI Emerging Market Index 2.80%, both in Dollar terms. Being out of the market was certainly not the right place to be. However, this unfortunately wasn’t the case for the JSE/FTSE All Share Index which was most disappointing, ending the month down 0.42%. Read the full article Domestic – Rating agencies call the shots! Whilst May began on a positive note for the local market, the uncertainties surrounding President Zuma and ‘State Capture’, coupled with the overhang of a possible further sovereign debt downgrade as well as a sharply declining oil price, all contributed to a risk-off attitude prevailing – with the result that the... Read More

Global – Growth gains momentum Global equities advanced in Dollar terms over a broad front during April on the back of positive economic data and a reduction in European geo-political risk as it became apparent that the French election would see the more moderate candidate emerge as the victor. The MSCI World Equity Index returned 1.53% but was outperformed by the MSCI Emerging Markets Index which returned 2.21%, both in Dollar terms. Emerging market performance was enhanced by US Dollar weakness combined with a synchronised improvement in global growth. Read the full article Domestic – Winds of change? Not surprisingly, following the midnight cabinet reshuffle, the expected ratings agencies downgrades followed. Fitch Ratings downgraded South Africa’s Long-Term Foreign- and Local-Currency Issuer Default Ratings to ‘BB+’ from ‘BBB-‘. The outlooks are stable. The issue ratings on South Africa’s senior unsecured foreign-... Read More

Global – Growth gains momentum Global equities advanced in Dollar terms over a broad front during April on the back of positive economic data and a reduction in European geo-political risk as it became apparent that the French election would see the more moderate candidate emerge as the victor. The MSCI World Equity Index returned 1.53% but was outperformed by the MSCI Emerging Markets Index which returned 2.21%, both in Dollar terms. Emerging market performance was enhanced by US Dollar weakness combined with a synchronised improvement in global growth. Read the full article Domestic – Winds of change? Not surprisingly, following the midnight cabinet reshuffle, the expected ratings agencies downgrades followed. Fitch Ratings downgraded South Africa’s Long-Term Foreign- and Local-Currency Issuer Default Ratings to ‘BB+’ from ‘BBB-‘. The outlooks are stable. The issue ratings on South Africa’s senior unsecured foreign-... Read More

Global – “The Trump Bump” World markets forged ahead in February, in many instances reaching all-time highs, largely on the back of expected US economic growth fueled by President Trump’s pledge of significant fiscal stimulus. Read the full article Domestic – “Februarius Horribilis” Parliament took center stage this month with President Zuma delivering his State of the Nation address and Minister Pravin Gordhan presenting this year’s budget. The main theme of Minister Pravin Gordhan’s budget speech was: ”Our growth challenge is intertwined with our transformation imperative. We need to transform in order to grow, we need to grow in order to transform. Without transformation, growth will reinforce inequality; without growth, transformation will be distorted by patronage.” Read the full article